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Carters 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 Carters to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Carters? Defining Valuable in VRIO
A resource or capability is considered valuable for Carters , if it allows the
Carters to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Carters to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Carters.
What are Rare Resources for Carters? Defining Rare in VRIO
In an industry that Carters operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Carters require rare resources to compete in the industry. If Carters don’t have rare resources that are required to succeed in the industry then Carters won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Carters competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Carters? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Carters 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. Carters 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 Carters
What is a Organization for Carters? Defining Organization in VRIO
Even if the Carters 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 Carters 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 |
---|---|---|---|---|---|
Position among Retailers and Wholesalers – Carters retail strategy | Yes, Carters has strong relationship with retailers and wholesalers | Yes, Carters 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 Carters in delivering lower costs | No | Can be imitated by competitors of Carters but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Customer Community of Carters | Yes, as customers are co-creating products | Yes, the Carters has able to build a special relationship with its customers | It is very difficult for Carters competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Carters customers community ecosystem | Providing Strong Competitive Advantage |
Track Record of Leadership Team at Carters | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Global and Local Presence of Carters | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Carters but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Marketing Expertise within Carters | 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 Carters are often matched by competitors | Yes, Carters is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Access to Cheap Capital for Carters | Yes, as a leading player in the industry and current macro economic conditions, Carters has access to cheap capital | No | Can be imitated by the competitors of Carters | Not been totally exploited | Not significant in creating competitive advantage |
Product Portfolio and Synergy among Various Product Lines of Carters | 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 |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Carters operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Carters is successful at it | Providing Strong Competitive Advantage |
Opportunities in the Adjacent Industries that Carters 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Brand awareness of Carters products and services | Yes, the brand awareness of Carters products are high | Yes, Carters has one of the leading brand in the industry | No | Carters has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Sales Force and Channel Management of Carters | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Carters sustainable competitive advantage. Potential is certainly there. |
Supply Chain Network Flexibility of Carters | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Carters organizational structure and capabilities | Keeps the business running |
Carters 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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