Toys R Us 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 Toys R Us to do better resource allocation and build a defensible value and supply chain.

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What is a Valuable Resource for Toys R Us? Defining Valuable in VRIO

A resource or capability is considered valuable for Toys R Us , if it allows the Toys R Us to exploit opportunities or negate threats emerging out of both the micro business environment and the macro environment. If a resource does not allow Toys R Us to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Toys R Us.

What are Rare Resources for Toys R Us? Defining Rare in VRIO

In an industry that Toys R Us operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Toys R Us require rare resources to compete in the industry. If Toys R Us don’t have rare resources that are required to succeed in the industry then Toys R Us won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Toys R Us competitive advantage against players that don’t have those rare resources. HBR Case Study Solution

What is a Inimitable (Difficult to Immitate) Resource for Toys R Us? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to Toys R Us 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. Toys R Us 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 Toys R Us

What is a Organization for Toys R Us? Defining Organization in VRIO

Even if the Toys R Us 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 Toys R Us 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
Toys R Us 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 Toys R Us	Toys R Us is leveraging the customer loyalty to good effect	Provide Toys R Us medium term competitive advantage
Opportunities for Brand Extensions for Toys R Us 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
Marketing Expertise within Toys R Us	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 Toys R Us are often matched by competitors	Yes, Toys R Us is leveraging both its inhouse marketing department and external expertise	Temporary Competitive Advantage
Financial Resources of Toys R Us	Yes	No	Financial instruments and market liquidity are available to all the nearest competitors	Toys R Us has reasonably sound financial position	Toys R Us has relatively sustainable Competitive Advantage
Product Portfolio and Synergy among Various Product Lines of Toys R Us	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
Track Record of Project Execution	Yes, especially in an industry where there are frequent cost overun	Yes, especially in the segment that Toys R Us operates in	No, none of the competitors so far has able to imitate this expertise	Yes, Toys R Us is successful at it	Providing Strong Competitive Advantage
Intellectual Property Rights, Copyrights, and Trademarks	Yes, they are extremely valuable for Toys R Us to thwart competition	Yes, IPR and other rights are rare and competition of Toys R Us 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
Track Record of Leadership Team at Toys R Us	Yes	Yes	Can't be imitated by competitors	Yes	Providing Strong Competitive Advantage
Access to Cheap Capital for Toys R Us	Yes, as a leading player in the industry and current macro economic conditions, Toys R Us has access to cheap capital	No	Can be imitated by the competitors of Toys R Us	Not been totally exploited	Not significant in creating competitive advantage
Opportunities in the E-Commerce Space for Toys R Us - using Present IT Capabilities	Yes, the e-commerce space is rapidly growing and Toys R Us 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
Access to Critical Raw Material for Successful Execution	Yes	Yes, as other competitors have to come to terms with Toys R Us dominant market position	Can be imitated by competitors	Yes	Providing Sustainable Competitive Advantage
Customer Community of Toys R Us	Yes, as customers are co-creating products	Yes, the Toys R Us has able to build a special relationship with its customers	It is very difficult for Toys R Us competitors to imitate the culture and community dedication	Going by the data, there is still a lot of upside in building on Toys R Us customers community ecosystem	Providing Strong Competitive Advantage
Alignment of Activities with Toys R Us 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
Position among Retailers and Wholesalers – Toys R Us retail strategy	Yes, Toys R Us has strong relationship with retailers and wholesalers	Yes, Toys R Us has dedicated channel partners	Difficult to imitate though not impossible	Yes, over the years company has used it successfully	Sustainable Competitive Advantage

Toys R Us 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