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Hershey 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 Hershey to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Hershey? Defining Valuable in VRIO
A resource or capability is considered valuable for Hershey , if it allows the
Hershey to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Hershey to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Hershey.
What are Rare Resources for Hershey? Defining Rare in VRIO
In an industry that Hershey operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Hershey require rare resources to compete in the industry. If Hershey don’t have rare resources that are required to succeed in the industry then Hershey won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Hershey competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Hershey? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Hershey 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. Hershey 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 Hershey
What is a Organization for Hershey? Defining Organization in VRIO
Even if the Hershey 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 Hershey 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 Hershey | Yes, Hershey has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Hershey with a Temporary Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Hershey to thwart competition | Yes, IPR and other rights are rare and competition of Hershey 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 |
Brand Positioning of Hershey in Comparison to the Competitors | Yes | No | Can be imitated by competitors but it will require big marketing budget | Yes, the firm has positioned its brands based on consumer behavior | Temporary Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Hershey | 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 |
Sales Force and Channel Management of Hershey | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Hershey sustainable competitive advantage. Potential is certainly there. |
Position among Retailers and Wholesalers – Hershey retail strategy | Yes, Hershey has strong relationship with retailers and wholesalers | Yes, Hershey has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Customer Community of Hershey | Yes, as customers are co-creating products | Yes, the Hershey has able to build a special relationship with its customers | It is very difficult for Hershey competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Hershey customers community ecosystem | Providing Strong Competitive Advantage |
Access to Cheap Capital for Hershey | Yes, as a leading player in the industry and current macro economic conditions, Hershey has access to cheap capital | No | Can be imitated by the competitors of Hershey | Not been totally exploited | Not significant in creating competitive advantage |
Marketing Expertise within Hershey | 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 Hershey are often matched by competitors | Yes, Hershey is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Supply Chain Network Flexibility of Hershey | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Hershey organizational structure and capabilities | Keeps the business running |
Ability to Attract Talent in Various Local & Global Markets | Yes, Hershey 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 Hershey | To a large extent yes | Providing Strong Competitive Advantage |
Brand awareness of Hershey products and services | Yes, the brand awareness of Hershey products are high | Yes, Hershey has one of the leading brand in the industry | No | Hershey has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Hershey operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Hershey is successful at it | Providing Strong Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Hershey | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Hershey 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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