Lay's Potato Chips VRIO / VRIN Analysis | Assignment Help

What is VRIO / VRIN Analysis ?

VRIO stands for – Value of the resource, Rareness of the resource, Imitation Risk, and Organizational Competence.

VRIO is a resource focused strategic analysis tool. To build a sustainable competitive advantage the resources that –casename— needs to be valuable, rare, and difficult to imitate. Secondly the –casename— needs to possess capabilities, organizational structure, and culture to optimize the available resources usage. VRIO analysis can help organizations such as Lay's Potato Chips to do better resource allocation and build a defensible value and supply chain.

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What is a Valuable Resource for Lay's Potato Chips? Defining Valuable in VRIO

A resource or capability is considered valuable for Lay's Potato Chips , if it allows the Lay's Potato Chips to exploit opportunities or negate threats emerging out of both the micro business environment and the macro environment. If a resource does not allow Lay's Potato Chips to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Lay's Potato Chips.

What are Rare Resources for Lay's Potato Chips? Defining Rare in VRIO

In an industry that Lay's Potato Chips operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Lay's Potato Chips require rare resources to compete in the industry. If Lay's Potato Chips don’t have rare resources that are required to succeed in the industry then Lay's Potato Chips won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Lay's Potato Chips competitive advantage against players that don’t have those rare resources. HBR Case Study Solution

What is a Inimitable (Difficult to Immitate) Resource for Lay's Potato Chips? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to Lay's Potato Chips for certain period of time as all the competitors are going to try to imitate or replicate that resource. A sustained competitive advantage emerges, if the resource is difficult to imitate by the competitors. Lay's Potato Chips can create inmitability by innovating on the product side, reducing pain points on service delivery, and having an effective post sales servicing strategy. Check out the SWOT analysis of Lay's Potato Chips

What is a Organization for Lay's Potato Chips? Defining Organization in VRIO

Even if the Lay's Potato Chips has all the valuable resources that are both rare and difficult to imitate, it won’t automatically result into a sustainable competitive advantage. The key to build the sustainable competitive advantage is to have organizational capabilities, expertise, and structure to exploit the resources. If Lay's Potato Chips is not organized based on its strengths then it won’t able to exploit all the resources that it possesses.

Resources	Value	Rare	Imitation	Organization	Competitive Advantage
Access to Cheap Capital for Lay's Potato Chips	Yes, as a leading player in the industry and current macro economic conditions, Lay's Potato Chips has access to cheap capital	No	Can be imitated by the competitors of Lay's Potato Chips	Not been totally exploited	Not significant in creating competitive advantage
Marketing Expertise within Lay's Potato Chips	Yes, firms are competing based on differentiation in the industry	No, as most of the competitors also have good marketing departments and expertise	Pricing strategies of Lay's Potato Chips are often matched by competitors	Yes, Lay's Potato Chips is leveraging both its inhouse marketing department and external expertise	Temporary Competitive Advantage
Distribution and Logistics Costs Competitiveness	Yes, as it helps Lay's Potato Chips in delivering lower costs	No	Can be imitated by competitors of Lay's Potato Chips but it is difficult	Yes	Medium to Long Term Competitive Advantage
Intellectual Property Rights, Copyrights, and Trademarks	Yes, they are extremely valuable for Lay's Potato Chips to thwart competition	Yes, IPR and other rights are rare and competition of Lay's Potato Chips will find it extremely difficult to copy	Risk of imitation is low but given the margins in the industry disruption chances are high	So far the firm has not utilized the full extent of its IPR & other properties	Providing Strong Competitive Advantage
Opportunities for Brand Extensions for Lay's Potato Chips products	Yes, new niches are emerging in the market	No, as most of the competitors are also targeting those niches	Yes can be imitated by the competitors	Brand extensions will require higher marketing budget	Temporary Competitive Advantage
Access to Critical Raw Material for Successful Execution	Yes	Yes, as other competitors have to come to terms with Lay's Potato Chips dominant market position	Can be imitated by competitors	Yes	Providing Sustainable Competitive Advantage
Track Record of Leadership Team at Lay's Potato Chips	Yes	Yes	Can't be imitated by competitors	Yes	Providing Strong Competitive Advantage
Position among Retailers and Wholesalers – Lay's Potato Chips retail strategy	Yes, Lay's Potato Chips has strong relationship with retailers and wholesalers	Yes, Lay's Potato Chips has dedicated channel partners	Difficult to imitate though not impossible	Yes, over the years company has used it successfully	Sustainable Competitive Advantage
Lay's Potato Chips Customer Network and Loyalty	Yes, 23% of the customers contribute to more than 84% of the sales revenue	Yes, firm has invested to build a strong customer loyalty	Has been tried by competitors but none of them are as successful as Lay's Potato Chips	Lay's Potato Chips is leveraging the customer loyalty to good effect	Provide Lay's Potato Chips medium term competitive advantage
Pricing Strategies of Lay's Potato Chips	Yes, Lay's Potato Chips has sound pricing strategies	No	Pricing strategies are regularly imitated in the industry	Yes, firm has a pricing analytics engine	It can only provide Lay's Potato Chips with a Temporary Competitive Advantage
Alignment of Activities with Lay's Potato Chips Corporate Strategy	Yes	No	Each of the firm has its own strategy	Yes, company has organizational skills to extract the maximum out of it.	Still lots of potential to build on it
Sales Force and Channel Management of Lay's Potato Chips	Yes	No	Can be imitated by competitors	Still there is lot of potential to utilize the excellent sales force	Can provide Lay's Potato Chips sustainable competitive advantage. Potential is certainly there.
Product Portfolio and Synergy among Various Product Lines of Lay's Potato Chips	Yes, it is valuable in the industry given the various segmentations & consumer preferences.	Most of the competitors are trying to enter the lucrative segments	Can be imitated by the competitors	The firm has used it to good effect, details can be found in case exhibit	Provide short term competitive advantage but requires constant innovation to sustain
Customer Community of Lay's Potato Chips	Yes, as customers are co-creating products	Yes, the Lay's Potato Chips has able to build a special relationship with its customers	It is very difficult for Lay's Potato Chips competitors to imitate the culture and community dedication	Going by the data, there is still a lot of upside in building on Lay's Potato Chips customers community ecosystem	Providing Strong Competitive Advantage

Lay's Potato Chips SWOT Analysis, SWOT Matrix, Weighted SWOT Case Study Solution & Analysis

Books and References

Ahir Gopaldas and Anton Siebert (2022 July August) "What You’re Getting Wrong About Customer Journeys", Harvard Business Review , 92
Linda A. Hill, Emily Tedards, and Taran Swan (2021) "Drive Innovation with Better Decision-Making", Harvard Business Review 86
Dyer, J. H., & Hatch, N. (2004). Using Supplier Networks to Learn Faster. Sloan Management Review, 45(3), 57–63
Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17, 99–120
Dyer, J. H., Kale, P., & Singh, H. (2004, July–August). When to ally and when to acquire. Harvard Business Review, 109–115