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Prada 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 Prada to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Prada? Defining Valuable in VRIO
A resource or capability is considered valuable for Prada , if it allows the
Prada to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Prada to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Prada.
What are Rare Resources for Prada? Defining Rare in VRIO
In an industry that Prada operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Prada require rare resources to compete in the industry. If Prada don’t have rare resources that are required to succeed in the industry then Prada won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Prada competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Prada? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Prada 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. Prada 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 Prada
What is a Organization for Prada? Defining Organization in VRIO
Even if the Prada 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 Prada 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 |
---|---|---|---|---|---|
Successful Implementation of Digital Strategy at Prada | 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 |
Pricing Strategies of Prada | Yes, Prada has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Prada with a Temporary Competitive Advantage |
Financial Resources of Prada | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Prada has reasonably sound financial position | Prada has relatively sustainable Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Prada | 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 |
Marketing Expertise within Prada | 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 Prada are often matched by competitors | Yes, Prada is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Access to Cheap Capital for Prada | Yes, as a leading player in the industry and current macro economic conditions, Prada has access to cheap capital | No | Can be imitated by the competitors of Prada | Not been totally exploited | Not significant in creating competitive advantage |
Brand awareness of Prada products and services | Yes, the brand awareness of Prada products are high | Yes, Prada has one of the leading brand in the industry | No | Prada has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Prada in delivering lower costs | No | Can be imitated by competitors of Prada but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Opportunities in the Adjacent Industries that Prada can exploit & New Resources Required to Enter those Industries | Can be valuable as they will create new revenue streams | No | Can be imitated by competitors | All the capabilities of the organization are not fully utilized yet | Has potential |
Opportunities in the E-Commerce Space for Prada - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Prada 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 |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Prada dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Prada 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 Prada | Prada is leveraging the customer loyalty to good effect | Provide Prada medium term competitive advantage |
Global and Local Presence of Prada | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Prada but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Sales Force and Channel Management of Prada | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Prada sustainable competitive advantage. Potential is certainly there. |
Prada 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
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