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Supervalu 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 Supervalu to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Supervalu? Defining Valuable in VRIO
A resource or capability is considered valuable for Supervalu , if it allows the
Supervalu to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Supervalu to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Supervalu.
What are Rare Resources for Supervalu? Defining Rare in VRIO
In an industry that Supervalu operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Supervalu require rare resources to compete in the industry. If Supervalu don’t have rare resources that are required to succeed in the industry then Supervalu won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Supervalu competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Supervalu? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Supervalu 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. Supervalu 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 Supervalu
What is a Organization for Supervalu? Defining Organization in VRIO
Even if the Supervalu 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 Supervalu 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 in the E-Commerce Space for Supervalu - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Supervalu 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 |
Opportunities for Brand Extensions for Supervalu 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 |
Global and Local Presence of Supervalu | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Supervalu but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Supervalu 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 Supervalu | Supervalu is leveraging the customer loyalty to good effect | Provide Supervalu medium term competitive advantage |
Supply Chain Network Flexibility of Supervalu | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Supervalu organizational structure and capabilities | Keeps the business running |
Access to Cheap Capital for Supervalu | Yes, as a leading player in the industry and current macro economic conditions, Supervalu has access to cheap capital | No | Can be imitated by the competitors of Supervalu | Not been totally exploited | Not significant in creating competitive advantage |
Successful Implementation of Digital Strategy at Supervalu | 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 Supervalu | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Customer Community of Supervalu | Yes, as customers are co-creating products | Yes, the Supervalu has able to build a special relationship with its customers | It is very difficult for Supervalu competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Supervalu customers community ecosystem | Providing Strong Competitive Advantage |
Pricing Strategies of Supervalu | Yes, Supervalu has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Supervalu with a Temporary Competitive Advantage |
Financial Resources of Supervalu | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Supervalu has reasonably sound financial position | Supervalu has relatively sustainable Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Supervalu in delivering lower costs | No | Can be imitated by competitors of Supervalu but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Supervalu | 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 Supervalu | 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 Supervalu are often matched by competitors | Yes, Supervalu is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Supervalu 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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