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Fossil Group 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 Fossil Group to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Fossil Group? Defining Valuable in VRIO
A resource or capability is considered valuable for Fossil Group , if it allows the
Fossil Group to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Fossil Group to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Fossil Group.
What are Rare Resources for Fossil Group? Defining Rare in VRIO
In an industry that Fossil Group operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Fossil Group require rare resources to compete in the industry. If Fossil Group don’t have rare resources that are required to succeed in the industry then Fossil Group won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Fossil Group competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Fossil Group? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Fossil Group 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. Fossil Group 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 Fossil Group
What is a Organization for Fossil Group? Defining Organization in VRIO
Even if the Fossil Group 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 Fossil Group 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 |
---|---|---|---|---|---|
Financial Resources of Fossil Group | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Fossil Group has reasonably sound financial position | Fossil Group has relatively sustainable Competitive Advantage |
Marketing Expertise within Fossil Group | 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 Fossil Group are often matched by competitors | Yes, Fossil Group is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Position among Retailers and Wholesalers – Fossil Group retail strategy | Yes, Fossil Group has strong relationship with retailers and wholesalers | Yes, Fossil Group has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Successful Implementation of Digital Strategy at Fossil Group | 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 |
Supply Chain Network Flexibility of Fossil Group | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Fossil Group organizational structure and capabilities | Keeps the business running |
Global and Local Presence of Fossil Group | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Fossil Group but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Track Record of Leadership Team at Fossil Group | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Brand awareness of Fossil Group products and services | Yes, the brand awareness of Fossil Group products are high | Yes, Fossil Group has one of the leading brand in the industry | No | Fossil Group has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Fossil Group 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 Fossil Group | To a large extent yes | Providing Strong Competitive Advantage |
Sales Force and Channel Management of Fossil Group | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Fossil Group sustainable competitive advantage. Potential is certainly there. |
Brand Positioning of Fossil Group 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 Adjacent Industries that Fossil Group 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Fossil Group in delivering lower costs | No | Can be imitated by competitors of Fossil Group but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Fossil Group to thwart competition | Yes, IPR and other rights are rare and competition of Fossil Group 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 |
Fossil Group 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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