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Diplomat Pharmacy 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 Diplomat Pharmacy to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Diplomat Pharmacy? Defining Valuable in VRIO
A resource or capability is considered valuable for Diplomat Pharmacy , if it allows the
Diplomat Pharmacy to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Diplomat Pharmacy to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Diplomat Pharmacy.
What are Rare Resources for Diplomat Pharmacy? Defining Rare in VRIO
In an industry that Diplomat Pharmacy operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Diplomat Pharmacy require rare resources to compete in the industry. If Diplomat Pharmacy don’t have rare resources that are required to succeed in the industry then Diplomat Pharmacy won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Diplomat Pharmacy competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Diplomat Pharmacy? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Diplomat Pharmacy 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. Diplomat Pharmacy 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 Diplomat Pharmacy
What is a Organization for Diplomat Pharmacy? Defining Organization in VRIO
Even if the Diplomat Pharmacy 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 Diplomat Pharmacy 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 |
---|---|---|---|---|---|
Alignment of Activities with Diplomat Pharmacy 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, Diplomat Pharmacy 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 Diplomat Pharmacy | To a large extent yes | Providing Strong Competitive Advantage |
Diplomat Pharmacy 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 Diplomat Pharmacy | Diplomat Pharmacy is leveraging the customer loyalty to good effect | Provide Diplomat Pharmacy medium term competitive advantage |
Position among Retailers and Wholesalers – Diplomat Pharmacy retail strategy | Yes, Diplomat Pharmacy has strong relationship with retailers and wholesalers | Yes, Diplomat Pharmacy has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Brand Positioning of Diplomat Pharmacy 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 Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Diplomat Pharmacy dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Access to Cheap Capital for Diplomat Pharmacy | Yes, as a leading player in the industry and current macro economic conditions, Diplomat Pharmacy has access to cheap capital | No | Can be imitated by the competitors of Diplomat Pharmacy | Not been totally exploited | Not significant in creating competitive advantage |
Marketing Expertise within Diplomat Pharmacy | 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 Diplomat Pharmacy are often matched by competitors | Yes, Diplomat Pharmacy is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Customer Community of Diplomat Pharmacy | Yes, as customers are co-creating products | Yes, the Diplomat Pharmacy has able to build a special relationship with its customers | It is very difficult for Diplomat Pharmacy competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Diplomat Pharmacy customers community ecosystem | Providing Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Diplomat Pharmacy in delivering lower costs | No | Can be imitated by competitors of Diplomat Pharmacy but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Opportunities for Brand Extensions for Diplomat Pharmacy 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Diplomat Pharmacy to thwart competition | Yes, IPR and other rights are rare and competition of Diplomat Pharmacy 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 |
Opportunities in the E-Commerce Space for Diplomat Pharmacy - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Diplomat Pharmacy 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 |
Supply Chain Network Flexibility of Diplomat Pharmacy | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Diplomat Pharmacy organizational structure and capabilities | Keeps the business running |
Diplomat Pharmacy 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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