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Sprouts Farmers Market 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 Sprouts Farmers Market to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Sprouts Farmers Market? Defining Valuable in VRIO
A resource or capability is considered valuable for Sprouts Farmers Market , if it allows the
Sprouts Farmers Market to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Sprouts Farmers Market to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Sprouts Farmers Market.
What are Rare Resources for Sprouts Farmers Market? Defining Rare in VRIO
In an industry that Sprouts Farmers Market operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Sprouts Farmers Market require rare resources to compete in the industry. If Sprouts Farmers Market don’t have rare resources that are required to succeed in the industry then Sprouts Farmers Market won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Sprouts Farmers Market competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Sprouts Farmers Market? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Sprouts Farmers Market 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. Sprouts Farmers Market 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 Sprouts Farmers Market
What is a Organization for Sprouts Farmers Market? Defining Organization in VRIO
Even if the Sprouts Farmers Market 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 Sprouts Farmers Market 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 |
---|---|---|---|---|---|
Brand Positioning of Sprouts Farmers Market 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 |
Sprouts Farmers Market 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 Sprouts Farmers Market | Sprouts Farmers Market is leveraging the customer loyalty to good effect | Provide Sprouts Farmers Market medium term competitive advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Sprouts Farmers Market | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Financial Resources of Sprouts Farmers Market | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Sprouts Farmers Market has reasonably sound financial position | Sprouts Farmers Market has relatively sustainable Competitive Advantage |
Global and Local Presence of Sprouts Farmers Market | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Sprouts Farmers Market but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Opportunities in the E-Commerce Space for Sprouts Farmers Market - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Sprouts Farmers Market 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Sprouts Farmers Market in delivering lower costs | No | Can be imitated by competitors of Sprouts Farmers Market but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Pricing Strategies of Sprouts Farmers Market | Yes, Sprouts Farmers Market has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Sprouts Farmers Market with a Temporary Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Sprouts Farmers Market dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Supply Chain Network Flexibility of Sprouts Farmers Market | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Sprouts Farmers Market organizational structure and capabilities | Keeps the business running |
Successful Implementation of Digital Strategy at Sprouts Farmers Market | 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 |
Track Record of Leadership Team at Sprouts Farmers Market | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Access to Cheap Capital for Sprouts Farmers Market | Yes, as a leading player in the industry and current macro economic conditions, Sprouts Farmers Market has access to cheap capital | No | Can be imitated by the competitors of Sprouts Farmers Market | Not been totally exploited | Not significant in creating competitive advantage |
Sprouts Farmers Market 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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