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Kroger 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 Kroger to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Kroger? Defining Valuable in VRIO
A resource or capability is considered valuable for Kroger , if it allows the
Kroger to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Kroger to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Kroger.
What are Rare Resources for Kroger? Defining Rare in VRIO
In an industry that Kroger operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Kroger require rare resources to compete in the industry. If Kroger don’t have rare resources that are required to succeed in the industry then Kroger won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Kroger competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Kroger? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Kroger 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. Kroger 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 Kroger
What is a Organization for Kroger? Defining Organization in VRIO
Even if the Kroger 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 Kroger 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 |
---|---|---|---|---|---|
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Kroger operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Kroger is successful at it | Providing Strong Competitive Advantage |
Access to Cheap Capital for Kroger | Yes, as a leading player in the industry and current macro economic conditions, Kroger has access to cheap capital | No | Can be imitated by the competitors of Kroger | Not been totally exploited | Not significant in creating competitive advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Kroger in delivering lower costs | No | Can be imitated by competitors of Kroger but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Global and Local Presence of Kroger | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Kroger but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Financial Resources of Kroger | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Kroger has reasonably sound financial position | Kroger has relatively sustainable Competitive Advantage |
Opportunities in the E-Commerce Space for Kroger - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Kroger 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, Kroger 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 Kroger | To a large extent yes | Providing Strong Competitive Advantage |
Track Record of Leadership Team at Kroger | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Opportunities for Brand Extensions for Kroger 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Kroger | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Position among Retailers and Wholesalers – Kroger retail strategy | Yes, Kroger has strong relationship with retailers and wholesalers | Yes, Kroger has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Pricing Strategies of Kroger | Yes, Kroger has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Kroger with a Temporary Competitive Advantage |
Opportunities in the Adjacent Industries that Kroger 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 |
Kroger 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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