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Chicos Fashion 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 Chicos Fashion to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Chicos Fashion? Defining Valuable in VRIO
A resource or capability is considered valuable for Chicos Fashion , if it allows the
Chicos Fashion to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Chicos Fashion to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Chicos Fashion.
What are Rare Resources for Chicos Fashion? Defining Rare in VRIO
In an industry that Chicos Fashion operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Chicos Fashion require rare resources to compete in the industry. If Chicos Fashion don’t have rare resources that are required to succeed in the industry then Chicos Fashion won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Chicos Fashion competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Chicos Fashion? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Chicos Fashion 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. Chicos Fashion 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 Chicos Fashion
What is a Organization for Chicos Fashion? Defining Organization in VRIO
Even if the Chicos Fashion 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 Chicos Fashion 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 |
---|---|---|---|---|---|
Supply Chain Network Flexibility of Chicos Fashion | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Chicos Fashion organizational structure and capabilities | Keeps the business running |
Opportunities in the Adjacent Industries that Chicos Fashion 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 |
Alignment of Activities with Chicos Fashion 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 |
Position among Retailers and Wholesalers – Chicos Fashion retail strategy | Yes, Chicos Fashion has strong relationship with retailers and wholesalers | Yes, Chicos Fashion has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Chicos Fashion | 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Chicos Fashion to thwart competition | Yes, IPR and other rights are rare and competition of Chicos Fashion 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 |
Pricing Strategies of Chicos Fashion | Yes, Chicos Fashion has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Chicos Fashion with a Temporary Competitive Advantage |
Global and Local Presence of Chicos Fashion | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Chicos Fashion but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Brand awareness of Chicos Fashion products and services | Yes, the brand awareness of Chicos Fashion products are high | Yes, Chicos Fashion has one of the leading brand in the industry | No | Chicos Fashion has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Chicos Fashion | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Opportunities for Brand Extensions for Chicos Fashion 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, Chicos Fashion 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 Chicos Fashion | To a large extent yes | Providing Strong Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Chicos Fashion dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Track Record of Leadership Team at Chicos Fashion | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Chicos Fashion 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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