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Tiffany 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 Tiffany to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Tiffany? Defining Valuable in VRIO
A resource or capability is considered valuable for Tiffany , if it allows the
Tiffany to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Tiffany to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Tiffany.
What are Rare Resources for Tiffany? Defining Rare in VRIO
In an industry that Tiffany operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Tiffany require rare resources to compete in the industry. If Tiffany don’t have rare resources that are required to succeed in the industry then Tiffany won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Tiffany competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Tiffany? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Tiffany 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. Tiffany 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 Tiffany
What is a Organization for Tiffany? Defining Organization in VRIO
Even if the Tiffany 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 Tiffany 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 Tiffany | Yes, Tiffany has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Tiffany with a Temporary Competitive Advantage |
Supply Chain Network Flexibility of Tiffany | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Tiffany organizational structure and capabilities | Keeps the business running |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Tiffany | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Global and Local Presence of Tiffany | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Tiffany but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Brand Positioning of Tiffany 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 |
Opportunities in the E-Commerce Space for Tiffany - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Tiffany 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 |
Opportunities for Brand Extensions for Tiffany 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 |
Sales Force and Channel Management of Tiffany | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Tiffany sustainable competitive advantage. Potential is certainly there. |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Tiffany in delivering lower costs | No | Can be imitated by competitors of Tiffany but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Tiffany operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Tiffany is successful at it | Providing Strong Competitive Advantage |
Track Record of Leadership Team at Tiffany | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – Tiffany retail strategy | Yes, Tiffany has strong relationship with retailers and wholesalers | Yes, Tiffany has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Opportunities in the Adjacent Industries that Tiffany 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 |
Tiffany 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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