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Clorox 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 Clorox to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Clorox? Defining Valuable in VRIO
A resource or capability is considered valuable for Clorox , if it allows the
Clorox to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Clorox to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Clorox.
What are Rare Resources for Clorox? Defining Rare in VRIO
In an industry that Clorox operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Clorox require rare resources to compete in the industry. If Clorox don’t have rare resources that are required to succeed in the industry then Clorox won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Clorox competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Clorox? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Clorox 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. Clorox 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 Clorox
What is a Organization for Clorox? Defining Organization in VRIO
Even if the Clorox 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 Clorox 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 |
---|---|---|---|---|---|
Access to Cheap Capital for Clorox | Yes, as a leading player in the industry and current macro economic conditions, Clorox has access to cheap capital | No | Can be imitated by the competitors of Clorox | Not been totally exploited | Not significant in creating competitive advantage |
Alignment of Activities with Clorox 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 |
Product Portfolio and Synergy among Various Product Lines of Clorox | 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 Clorox | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Clorox sustainable competitive advantage. Potential is certainly there. |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Clorox operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Clorox is successful at it | Providing Strong Competitive Advantage |
Global and Local Presence of Clorox | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Clorox but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Supply Chain Network Flexibility of Clorox | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Clorox organizational structure and capabilities | Keeps the business running |
Marketing Expertise within Clorox | 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 Clorox are often matched by competitors | Yes, Clorox is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Clorox | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Opportunities in the E-Commerce Space for Clorox - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Clorox can exploit the emerging opportunities | No, most of the competitors are investing in IT to enter the space | The AI and inhouse analytics can be difficult to imitate | It is just the start for the organization | In the long run it can provide sustainable competitive advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Clorox to thwart competition | Yes, IPR and other rights are rare and competition of Clorox 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, Clorox 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 Clorox | To a large extent yes | Providing Strong Competitive Advantage |
Opportunities in the Adjacent Industries that Clorox 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 |
Clorox 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 Clorox | Clorox is leveraging the customer loyalty to good effect | Provide Clorox medium term competitive advantage |
Clorox 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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