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