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The North Face 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 The North Face to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for The North Face? Defining Valuable in VRIO
A resource or capability is considered valuable for The North Face , if it allows the
The North Face to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow The North Face to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for The North Face.
What are Rare Resources for The North Face? Defining Rare in VRIO
In an industry that The North Face operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. The North Face require rare resources to compete in the industry. If The North Face don’t have rare resources that are required to succeed in the industry then The North Face won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide The North Face competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for The North Face? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to The North Face 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. The North Face 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 The North Face
What is a Organization for The North Face? Defining Organization in VRIO
Even if the The North Face 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 The North Face 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 |
---|---|---|---|---|---|
Supply Chain Network Flexibility of The North Face | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by The North Face organizational structure and capabilities | Keeps the business running |
Pricing Strategies of The North Face | Yes, The North Face has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide The North Face with a Temporary Competitive Advantage |
Opportunities in the Adjacent Industries that The North Face 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 |
Product Portfolio and Synergy among Various Product Lines of The North Face | 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 |
Alignment of Activities with The North Face 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 |
Track Record of Leadership Team at The North Face | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, The North Face strategy is built on successful innovation and localization of products | Yes, as talent is critical to firm's growth | Difficult to imitate for the current competitors of The North Face | To a large extent yes | Providing Strong Competitive Advantage |
Sales Force and Channel Management of The North Face | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide The North Face sustainable competitive advantage. Potential is certainly there. |
The North Face 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 The North Face | The North Face is leveraging the customer loyalty to good effect | Provide The North Face medium term competitive advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps The North Face in delivering lower costs | No | Can be imitated by competitors of The North Face but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Opportunities in the E-Commerce Space for The North Face - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and The North Face 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of The North Face | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Customer Community of The North Face | Yes, as customers are co-creating products | Yes, the The North Face has able to build a special relationship with its customers | It is very difficult for The North Face competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on The North Face customers community ecosystem | Providing Strong Competitive Advantage |
Marketing Expertise within The North Face | 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 The North Face are often matched by competitors | Yes, The North Face is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
The North Face 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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