Johnson & Johnson 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 Johnson & Johnson to do better resource allocation and build a defensible value and supply chain.

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What is a Valuable Resource for Johnson & Johnson? Defining Valuable in VRIO

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

What are Rare Resources for Johnson & Johnson? Defining Rare in VRIO

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

What is a Inimitable (Difficult to Immitate) Resource for Johnson & Johnson? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to Johnson & Johnson 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. Johnson & Johnson 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 Johnson & Johnson

What is a Organization for Johnson & Johnson? Defining Organization in VRIO

Even if the Johnson & Johnson 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 Johnson & Johnson 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
Product Portfolio and Synergy among Various Product Lines of Johnson & Johnson	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
Vision of the Leadership for Next Set of Challenges	Yes	No	Can't be imitated by competitors of Johnson & Johnson	Not based on information provided in the case	Can Lead to Strong Competitive Advantage
Track Record of Leadership Team at Johnson & Johnson	Yes	Yes	Can't be imitated by competitors	Yes	Providing Strong Competitive Advantage
Access to Cheap Capital for Johnson & Johnson	Yes, as a leading player in the industry and current macro economic conditions, Johnson & Johnson has access to cheap capital	No	Can be imitated by the competitors of Johnson & Johnson	Not been totally exploited	Not significant in creating competitive advantage
Sales Force and Channel Management of Johnson & Johnson	Yes	No	Can be imitated by competitors	Still there is lot of potential to utilize the excellent sales force	Can provide Johnson & Johnson sustainable competitive advantage. Potential is certainly there.
Opportunities for Brand Extensions for Johnson & Johnson 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
Financial Resources of Johnson & Johnson	Yes	No	Financial instruments and market liquidity are available to all the nearest competitors	Johnson & Johnson has reasonably sound financial position	Johnson & Johnson has relatively sustainable Competitive Advantage
Johnson & Johnson 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 Johnson & Johnson	Johnson & Johnson is leveraging the customer loyalty to good effect	Provide Johnson & Johnson medium term competitive advantage
Customer Community of Johnson & Johnson	Yes, as customers are co-creating products	Yes, the Johnson & Johnson has able to build a special relationship with its customers	It is very difficult for Johnson & Johnson competitors to imitate the culture and community dedication	Going by the data, there is still a lot of upside in building on Johnson & Johnson customers community ecosystem	Providing Strong Competitive Advantage
Access to Critical Raw Material for Successful Execution	Yes	Yes, as other competitors have to come to terms with Johnson & Johnson dominant market position	Can be imitated by competitors	Yes	Providing Sustainable Competitive Advantage
Global and Local Presence of Johnson & Johnson	Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles	Yes	Can be imitated by competitors of Johnson & Johnson but at a relatively high cost	Yes, it is one of the most diversified companies in its industry	Providing Strong Competitive Advantage
Marketing Expertise within Johnson & Johnson	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 Johnson & Johnson are often matched by competitors	Yes, Johnson & Johnson is leveraging both its inhouse marketing department and external expertise	Temporary Competitive Advantage
Track Record of Project Execution	Yes, especially in an industry where there are frequent cost overun	Yes, especially in the segment that Johnson & Johnson operates in	No, none of the competitors so far has able to imitate this expertise	Yes, Johnson & Johnson is successful at it	Providing Strong Competitive Advantage
Opportunities in the Adjacent Industries that Johnson & Johnson 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

Johnson & Johnson 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