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99 Cents Only Stores 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 99 Cents Only Stores to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for 99 Cents Only Stores? Defining Valuable in VRIO
A resource or capability is considered valuable for 99 Cents Only Stores , if it allows the
99 Cents Only Stores to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow 99 Cents Only Stores to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for 99 Cents Only Stores.
What are Rare Resources for 99 Cents Only Stores? Defining Rare in VRIO
In an industry that 99 Cents Only Stores operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. 99 Cents Only Stores require rare resources to compete in the industry. If 99 Cents Only Stores don’t have rare resources that are required to succeed in the industry then 99 Cents Only Stores won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide 99 Cents Only Stores competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for 99 Cents Only Stores? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to 99 Cents Only Stores 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. 99 Cents Only Stores 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 99 Cents Only Stores
What is a Organization for 99 Cents Only Stores? Defining Organization in VRIO
Even if the 99 Cents Only Stores 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 99 Cents Only Stores 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 |
---|---|---|---|---|---|
Global and Local Presence of 99 Cents Only Stores | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of 99 Cents Only Stores but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Opportunities for Brand Extensions for 99 Cents Only Stores 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 |
Position among Retailers and Wholesalers – 99 Cents Only Stores retail strategy | Yes, 99 Cents Only Stores has strong relationship with retailers and wholesalers | Yes, 99 Cents Only Stores has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, 99 Cents Only Stores 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 99 Cents Only Stores | To a large extent yes | Providing Strong Competitive Advantage |
99 Cents Only Stores 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 99 Cents Only Stores | 99 Cents Only Stores is leveraging the customer loyalty to good effect | Provide 99 Cents Only Stores medium term competitive advantage |
Track Record of Leadership Team at 99 Cents Only Stores | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Customer Community of 99 Cents Only Stores | Yes, as customers are co-creating products | Yes, the 99 Cents Only Stores has able to build a special relationship with its customers | It is very difficult for 99 Cents Only Stores competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on 99 Cents Only Stores customers community ecosystem | Providing Strong Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of 99 Cents Only Stores | 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with 99 Cents Only Stores dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Brand awareness of 99 Cents Only Stores products and services | Yes, the brand awareness of 99 Cents Only Stores products are high | Yes, 99 Cents Only Stores has one of the leading brand in the industry | No | 99 Cents Only Stores has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for 99 Cents Only Stores to thwart competition | Yes, IPR and other rights are rare and competition of 99 Cents Only Stores 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 |
Successful Implementation of Digital Strategy at 99 Cents Only Stores | 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of 99 Cents Only Stores | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
99 Cents Only Stores 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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