Sally Beauty Holdings 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 Sally Beauty Holdings to do better resource allocation and build a defensible value and supply chain.

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What is a Valuable Resource for Sally Beauty Holdings? Defining Valuable in VRIO

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

What are Rare Resources for Sally Beauty Holdings? Defining Rare in VRIO

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

What is a Inimitable (Difficult to Immitate) Resource for Sally Beauty Holdings? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to Sally Beauty Holdings 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. Sally Beauty Holdings 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 Sally Beauty Holdings

What is a Organization for Sally Beauty Holdings? Defining Organization in VRIO

Even if the Sally Beauty Holdings 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 Sally Beauty Holdings 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
Track Record of Project Execution	Yes, especially in an industry where there are frequent cost overun	Yes, especially in the segment that Sally Beauty Holdings operates in	No, none of the competitors so far has able to imitate this expertise	Yes, Sally Beauty Holdings is successful at it	Providing Strong Competitive Advantage
Intellectual Property Rights, Copyrights, and Trademarks	Yes, they are extremely valuable for Sally Beauty Holdings to thwart competition	Yes, IPR and other rights are rare and competition of Sally Beauty Holdings 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
Marketing Expertise within Sally Beauty Holdings	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 Sally Beauty Holdings are often matched by competitors	Yes, Sally Beauty Holdings is leveraging both its inhouse marketing department and external expertise	Temporary Competitive Advantage
Access to Critical Raw Material for Successful Execution	Yes	Yes, as other competitors have to come to terms with Sally Beauty Holdings dominant market position	Can be imitated by competitors	Yes	Providing Sustainable Competitive Advantage
Sally Beauty Holdings 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 Sally Beauty Holdings	Sally Beauty Holdings is leveraging the customer loyalty to good effect	Provide Sally Beauty Holdings medium term competitive advantage
Position among Retailers and Wholesalers – Sally Beauty Holdings retail strategy	Yes, Sally Beauty Holdings has strong relationship with retailers and wholesalers	Yes, Sally Beauty Holdings has dedicated channel partners	Difficult to imitate though not impossible	Yes, over the years company has used it successfully	Sustainable Competitive Advantage
Distribution and Logistics Costs Competitiveness	Yes, as it helps Sally Beauty Holdings in delivering lower costs	No	Can be imitated by competitors of Sally Beauty Holdings but it is difficult	Yes	Medium to Long Term Competitive Advantage
Brand Positioning of Sally Beauty Holdings 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
Access to Cheap Capital for Sally Beauty Holdings	Yes, as a leading player in the industry and current macro economic conditions, Sally Beauty Holdings has access to cheap capital	No	Can be imitated by the competitors of Sally Beauty Holdings	Not been totally exploited	Not significant in creating competitive advantage
Opportunities in the E-Commerce Space for Sally Beauty Holdings - using Present IT Capabilities	Yes, the e-commerce space is rapidly growing and Sally Beauty Holdings 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
Customer Community of Sally Beauty Holdings	Yes, as customers are co-creating products	Yes, the Sally Beauty Holdings has able to build a special relationship with its customers	It is very difficult for Sally Beauty Holdings competitors to imitate the culture and community dedication	Going by the data, there is still a lot of upside in building on Sally Beauty Holdings customers community ecosystem	Providing Strong Competitive Advantage
Sales Force and Channel Management of Sally Beauty Holdings	Yes	No	Can be imitated by competitors	Still there is lot of potential to utilize the excellent sales force	Can provide Sally Beauty Holdings sustainable competitive advantage. Potential is certainly there.
Alignment of Activities with Sally Beauty Holdings 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
Track Record of Leadership Team at Sally Beauty Holdings	Yes	Yes	Can't be imitated by competitors	Yes	Providing Strong Competitive Advantage

Sally Beauty Holdings 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