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Hormel Foods 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 Hormel Foods to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Hormel Foods? Defining Valuable in VRIO
A resource or capability is considered valuable for Hormel Foods , if it allows the
Hormel Foods to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Hormel Foods to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Hormel Foods.
What are Rare Resources for Hormel Foods? Defining Rare in VRIO
In an industry that Hormel Foods operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Hormel Foods require rare resources to compete in the industry. If Hormel Foods don’t have rare resources that are required to succeed in the industry then Hormel Foods won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Hormel Foods competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Hormel Foods? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Hormel Foods 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. Hormel Foods 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 Hormel Foods
What is a Organization for Hormel Foods? Defining Organization in VRIO
Even if the Hormel Foods 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 Hormel Foods 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 |
---|---|---|---|---|---|
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Successful Implementation of Digital Strategy at Hormel Foods | 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 |
Customer Community of Hormel Foods | Yes, as customers are co-creating products | Yes, the Hormel Foods has able to build a special relationship with its customers | It is very difficult for Hormel Foods competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Hormel Foods customers community ecosystem | Providing Strong Competitive Advantage |
Access to Cheap Capital for Hormel Foods | Yes, as a leading player in the industry and current macro economic conditions, Hormel Foods has access to cheap capital | No | Can be imitated by the competitors of Hormel Foods | Not been totally exploited | Not significant in creating competitive advantage |
Pricing Strategies of Hormel Foods | Yes, Hormel Foods has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Hormel Foods with a Temporary Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Hormel Foods to thwart competition | Yes, IPR and other rights are rare and competition of Hormel Foods 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 |
Global and Local Presence of Hormel Foods | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Hormel Foods but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Hormel Foods 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 Hormel Foods | To a large extent yes | Providing Strong Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Hormel Foods dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Financial Resources of Hormel Foods | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Hormel Foods has reasonably sound financial position | Hormel Foods has relatively sustainable Competitive Advantage |
Sales Force and Channel Management of Hormel Foods | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Hormel Foods sustainable competitive advantage. Potential is certainly there. |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Hormel Foods in delivering lower costs | No | Can be imitated by competitors of Hormel Foods but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Alignment of Activities with Hormel Foods 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 |
Track Record of Leadership Team at Hormel Foods | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Hormel Foods 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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