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PharMerica 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 PharMerica to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for PharMerica? Defining Valuable in VRIO
A resource or capability is considered valuable for PharMerica , if it allows the
PharMerica to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow PharMerica to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for PharMerica.
What are Rare Resources for PharMerica? Defining Rare in VRIO
In an industry that PharMerica operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. PharMerica require rare resources to compete in the industry. If PharMerica don’t have rare resources that are required to succeed in the industry then PharMerica won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide PharMerica competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for PharMerica? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to PharMerica 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. PharMerica 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 PharMerica
What is a Organization for PharMerica? Defining Organization in VRIO
Even if the PharMerica 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 PharMerica 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 |
---|---|---|---|---|---|
Opportunities for Brand Extensions for PharMerica 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 |
Global and Local Presence of PharMerica | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of PharMerica but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Brand Positioning of PharMerica 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 |
Product Portfolio and Synergy among Various Product Lines of PharMerica | 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 |
Opportunities in the Adjacent Industries that PharMerica 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 |
Sales Force and Channel Management of PharMerica | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide PharMerica sustainable competitive advantage. Potential is certainly there. |
PharMerica 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 PharMerica | PharMerica is leveraging the customer loyalty to good effect | Provide PharMerica medium term competitive advantage |
Successful Implementation of Digital Strategy at PharMerica | 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 PharMerica | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by PharMerica organizational structure and capabilities | Keeps the business running |
Marketing Expertise within PharMerica | 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 PharMerica are often matched by competitors | Yes, PharMerica is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Brand awareness of PharMerica products and services | Yes, the brand awareness of PharMerica products are high | Yes, PharMerica has one of the leading brand in the industry | No | PharMerica has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for PharMerica to thwart competition | Yes, IPR and other rights are rare and competition of PharMerica 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 PharMerica | Yes, PharMerica has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide PharMerica with a Temporary Competitive Advantage |
PharMerica 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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