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Fanta 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 Fanta to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Fanta? Defining Valuable in VRIO
A resource or capability is considered valuable for Fanta , if it allows the
Fanta to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Fanta to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Fanta.
What are Rare Resources for Fanta? Defining Rare in VRIO
In an industry that Fanta operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Fanta require rare resources to compete in the industry. If Fanta don’t have rare resources that are required to succeed in the industry then Fanta won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Fanta competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Fanta? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Fanta 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. Fanta 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 Fanta
What is a Organization for Fanta? Defining Organization in VRIO
Even if the Fanta 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 Fanta 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 |
---|---|---|---|---|---|
Brand awareness of Fanta products and services | Yes, the brand awareness of Fanta products are high | Yes, Fanta has one of the leading brand in the industry | No | Fanta has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Opportunities for Brand Extensions for Fanta 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Fanta in delivering lower costs | No | Can be imitated by competitors of Fanta but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Global and Local Presence of Fanta | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Fanta but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Track Record of Leadership Team at Fanta | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Opportunities in the E-Commerce Space for Fanta - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Fanta 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Fanta to thwart competition | Yes, IPR and other rights are rare and competition of Fanta 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 |
Successful Implementation of Digital Strategy at Fanta | 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Fanta | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Brand Positioning of Fanta in Comparison to the Competitors | Yes | No | Can be imitated by competitors but it will require big marketing budget | Yes, the firm has positioned its brands based on consumer behavior | Temporary Competitive Advantage |
Supply Chain Network Flexibility of Fanta | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Fanta organizational structure and capabilities | Keeps the business running |
Alignment of Activities with Fanta 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 |
Customer Community of Fanta | Yes, as customers are co-creating products | Yes, the Fanta has able to build a special relationship with its customers | It is very difficult for Fanta competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Fanta customers community ecosystem | Providing Strong Competitive Advantage |
Access to Cheap Capital for Fanta | Yes, as a leading player in the industry and current macro economic conditions, Fanta has access to cheap capital | No | Can be imitated by the competitors of Fanta | Not been totally exploited | Not significant in creating competitive advantage |
Fanta 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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