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PVH 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 PVH to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for PVH? Defining Valuable in VRIO
A resource or capability is considered valuable for PVH , if it allows the
PVH to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow PVH to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for PVH.
What are Rare Resources for PVH? Defining Rare in VRIO
In an industry that PVH operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. PVH require rare resources to compete in the industry. If PVH don’t have rare resources that are required to succeed in the industry then PVH won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide PVH competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for PVH? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to PVH 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. PVH 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 PVH
What is a Organization for PVH? Defining Organization in VRIO
Even if the PVH 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 PVH 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 |
---|---|---|---|---|---|
Pricing Strategies of PVH | Yes, PVH has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide PVH with a Temporary Competitive Advantage |
Opportunities in the Adjacent Industries that PVH 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 |
Opportunities for Brand Extensions for PVH 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 |
Product Portfolio and Synergy among Various Product Lines of PVH | 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 |
Access to Cheap Capital for PVH | Yes, as a leading player in the industry and current macro economic conditions, PVH has access to cheap capital | No | Can be imitated by the competitors of PVH | Not been totally exploited | Not significant in creating competitive advantage |
PVH 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 PVH | PVH is leveraging the customer loyalty to good effect | Provide PVH medium term competitive advantage |
Position among Retailers and Wholesalers – PVH retail strategy | Yes, PVH has strong relationship with retailers and wholesalers | Yes, PVH has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Track Record of Leadership Team at PVH | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of PVH | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Sales Force and Channel Management of PVH | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide PVH sustainable competitive advantage. Potential is certainly there. |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Customer Community of PVH | Yes, as customers are co-creating products | Yes, the PVH has able to build a special relationship with its customers | It is very difficult for PVH competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on PVH customers community ecosystem | Providing Strong Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for PVH to thwart competition | Yes, IPR and other rights are rare and competition of PVH 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 PVH | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of PVH but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
PVH 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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