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Shiseido 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 Shiseido to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Shiseido? Defining Valuable in VRIO
A resource or capability is considered valuable for Shiseido , if it allows the
Shiseido to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Shiseido to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Shiseido.
What are Rare Resources for Shiseido? Defining Rare in VRIO
In an industry that Shiseido operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Shiseido require rare resources to compete in the industry. If Shiseido don’t have rare resources that are required to succeed in the industry then Shiseido won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Shiseido competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Shiseido? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Shiseido 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. Shiseido 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 Shiseido
What is a Organization for Shiseido? Defining Organization in VRIO
Even if the Shiseido 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 Shiseido 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 |
---|---|---|---|---|---|
Global and Local Presence of Shiseido | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Shiseido 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 Shiseido | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Shiseido sustainable competitive advantage. Potential is certainly there. |
Brand awareness of Shiseido products and services | Yes, the brand awareness of Shiseido products are high | Yes, Shiseido has one of the leading brand in the industry | No | Shiseido has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Marketing Expertise within Shiseido | 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 Shiseido are often matched by competitors | Yes, Shiseido is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Shiseido dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Brand Positioning of Shiseido 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Shiseido in delivering lower costs | No | Can be imitated by competitors of Shiseido but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Alignment of Activities with Shiseido 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 |
Financial Resources of Shiseido | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Shiseido has reasonably sound financial position | Shiseido has relatively sustainable Competitive Advantage |
Position among Retailers and Wholesalers – Shiseido retail strategy | Yes, Shiseido has strong relationship with retailers and wholesalers | Yes, Shiseido has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Shiseido to thwart competition | Yes, IPR and other rights are rare and competition of Shiseido 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 |
Supply Chain Network Flexibility of Shiseido | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Shiseido organizational structure and capabilities | Keeps the business running |
Track Record of Leadership Team at Shiseido | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Pricing Strategies of Shiseido | Yes, Shiseido has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Shiseido with a Temporary Competitive Advantage |
Shiseido 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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