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Newell Brands 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 Newell Brands to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Newell Brands? Defining Valuable in VRIO
A resource or capability is considered valuable for Newell Brands , if it allows the
Newell Brands to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Newell Brands to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Newell Brands.
What are Rare Resources for Newell Brands? Defining Rare in VRIO
In an industry that Newell Brands operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Newell Brands require rare resources to compete in the industry. If Newell Brands don’t have rare resources that are required to succeed in the industry then Newell Brands won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Newell Brands competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Newell Brands? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Newell Brands 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. Newell Brands 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 Newell Brands
What is a Organization for Newell Brands? Defining Organization in VRIO
Even if the Newell Brands 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 Newell Brands 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 |
---|---|---|---|---|---|
Distribution and Logistics Costs Competitiveness | Yes, as it helps Newell Brands in delivering lower costs | No | Can be imitated by competitors of Newell Brands but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Newell Brands 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 Newell Brands | Newell Brands is leveraging the customer loyalty to good effect | Provide Newell Brands medium term competitive advantage |
Customer Community of Newell Brands | Yes, as customers are co-creating products | Yes, the Newell Brands has able to build a special relationship with its customers | It is very difficult for Newell Brands competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Newell Brands customers community ecosystem | Providing Strong 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 Newell Brands | 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 |
Opportunities in the Adjacent Industries that Newell Brands 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 |
Marketing Expertise within Newell Brands | 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 Newell Brands are often matched by competitors | Yes, Newell Brands is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Supply Chain Network Flexibility of Newell Brands | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Newell Brands organizational structure and capabilities | Keeps the business running |
Brand awareness of Newell Brands products and services | Yes, the brand awareness of Newell Brands products are high | Yes, Newell Brands has one of the leading brand in the industry | No | Newell Brands has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Newell Brands dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Alignment of Activities with Newell Brands 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 |
Global and Local Presence of Newell Brands | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Newell Brands but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Pricing Strategies of Newell Brands | Yes, Newell Brands has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Newell Brands with a Temporary Competitive Advantage |
Brand Positioning of Newell Brands 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 |
Newell Brands 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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