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HSN 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 HSN to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for HSN? Defining Valuable in VRIO
A resource or capability is considered valuable for HSN , if it allows the
HSN to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow HSN to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for HSN.
What are Rare Resources for HSN? Defining Rare in VRIO
In an industry that HSN operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. HSN require rare resources to compete in the industry. If HSN don’t have rare resources that are required to succeed in the industry then HSN won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide HSN competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for HSN? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to HSN 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. HSN 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 HSN
What is a Organization for HSN? Defining Organization in VRIO
Even if the HSN 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 HSN 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 |
---|---|---|---|---|---|
Opportunities in the Adjacent Industries that HSN 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 |
Financial Resources of HSN | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | HSN has reasonably sound financial position | HSN has relatively sustainable Competitive Advantage |
Supply Chain Network Flexibility of HSN | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by HSN organizational structure and capabilities | Keeps the business running |
Opportunities in the E-Commerce Space for HSN - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and HSN 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 |
Track Record of Leadership Team at HSN | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with HSN dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
HSN 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 HSN | HSN is leveraging the customer loyalty to good effect | Provide HSN medium term competitive advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of HSN | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Pricing Strategies of HSN | Yes, HSN has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide HSN with a Temporary Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of HSN | 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 HSN | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide HSN sustainable competitive advantage. Potential is certainly there. |
Brand Positioning of HSN 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 |
Brand awareness of HSN products and services | Yes, the brand awareness of HSN products are high | Yes, HSN has one of the leading brand in the industry | No | HSN has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Successful Implementation of Digital Strategy at HSN | 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 |
HSN 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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