Unilever 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 Unilever to do better resource allocation and build a defensible value and supply chain.

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What is a Valuable Resource for Unilever? Defining Valuable in VRIO

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

What are Rare Resources for Unilever? Defining Rare in VRIO

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

What is a Inimitable (Difficult to Immitate) Resource for Unilever? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to Unilever 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. Unilever 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 Unilever

What is a Organization for Unilever? Defining Organization in VRIO

Even if the Unilever 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 Unilever 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
Opportunities for Brand Extensions for Unilever 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
Vision of the Leadership for Next Set of Challenges	Yes	No	Can't be imitated by competitors of Unilever	Not based on information provided in the case	Can Lead to Strong Competitive Advantage
Financial Resources of Unilever	Yes	No	Financial instruments and market liquidity are available to all the nearest competitors	Unilever has reasonably sound financial position	Unilever has relatively sustainable Competitive Advantage
Successful Implementation of Digital Strategy at Unilever	Yes, without a comprehensive digital strategy it is extremely difficult to compete	No, as most of the firms are investing into digitalizing operations	Can be imitated by competitors	One of the leading player in the industry	Digital strategy has become critical in the industry but it can't provide sustainable competitive advantage to
Talent to Manage Regulatory and Legal Obligations	Yes	No	Can be imitated by competitors	Yes	Not critical factor
Distribution and Logistics Costs Competitiveness	Yes, as it helps Unilever in delivering lower costs	No	Can be imitated by competitors of Unilever but it is difficult	Yes	Medium to Long Term Competitive Advantage
Position among Retailers and Wholesalers – Unilever retail strategy	Yes, Unilever has strong relationship with retailers and wholesalers	Yes, Unilever has dedicated channel partners	Difficult to imitate though not impossible	Yes, over the years company has used it successfully	Sustainable Competitive Advantage
Product Portfolio and Synergy among Various Product Lines of Unilever	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
Track Record of Project Execution	Yes, especially in an industry where there are frequent cost overun	Yes, especially in the segment that Unilever operates in	No, none of the competitors so far has able to imitate this expertise	Yes, Unilever is successful at it	Providing Strong Competitive Advantage
Supply Chain Network Flexibility of Unilever	Yes	Yes	Near competitors also have flexible supply chain and share some of the suppliers	Fully utilized by Unilever organizational structure and capabilities	Keeps the business running
Marketing Expertise within Unilever	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 Unilever are often matched by competitors	Yes, Unilever is leveraging both its inhouse marketing department and external expertise	Temporary Competitive Advantage
Access to Cheap Capital for Unilever	Yes, as a leading player in the industry and current macro economic conditions, Unilever has access to cheap capital	No	Can be imitated by the competitors of Unilever	Not been totally exploited	Not significant in creating competitive advantage
Track Record of Leadership Team at Unilever	Yes	Yes	Can't be imitated by competitors	Yes	Providing Strong Competitive Advantage
Opportunities in the E-Commerce Space for Unilever - using Present IT Capabilities	Yes, the e-commerce space is rapidly growing and Unilever can exploit the emerging opportunities	No, most of the competitors are investing in IT to enter the space	The AI and inhouse analytics can be difficult to imitate	It is just the start for the organization	In the long run it can provide sustainable competitive advantage

Unilever 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