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Revlon 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 Revlon to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Revlon? Defining Valuable in VRIO
A resource or capability is considered valuable for Revlon , if it allows the
Revlon to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Revlon to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Revlon.
What are Rare Resources for Revlon? Defining Rare in VRIO
In an industry that Revlon operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Revlon require rare resources to compete in the industry. If Revlon don’t have rare resources that are required to succeed in the industry then Revlon won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Revlon competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Revlon? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Revlon 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. Revlon 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 Revlon
What is a Organization for Revlon? Defining Organization in VRIO
Even if the Revlon 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 Revlon 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 |
---|---|---|---|---|---|
Customer Community of Revlon | Yes, as customers are co-creating products | Yes, the Revlon has able to build a special relationship with its customers | It is very difficult for Revlon competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Revlon customers community ecosystem | Providing Strong Competitive Advantage |
Access to Cheap Capital for Revlon | Yes, as a leading player in the industry and current macro economic conditions, Revlon has access to cheap capital | No | Can be imitated by the competitors of Revlon | Not been totally exploited | Not significant in creating competitive advantage |
Marketing Expertise within Revlon | 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 Revlon are often matched by competitors | Yes, Revlon is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Opportunities in the Adjacent Industries that Revlon 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 |
Financial Resources of Revlon | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Revlon has reasonably sound financial position | Revlon has relatively sustainable Competitive Advantage |
Alignment of Activities with Revlon 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 |
Sales Force and Channel Management of Revlon | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Revlon sustainable competitive advantage. Potential is certainly there. |
Opportunities for Brand Extensions for Revlon 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 |
Pricing Strategies of Revlon | Yes, Revlon has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Revlon with a Temporary Competitive Advantage |
Brand awareness of Revlon products and services | Yes, the brand awareness of Revlon products are high | Yes, Revlon has one of the leading brand in the industry | No | Revlon has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Revlon 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 Revlon | To a large extent yes | Providing Strong Competitive Advantage |
Global and Local Presence of Revlon | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Revlon but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Successful Implementation of Digital Strategy at Revlon | 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 |
Revlon 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 Revlon | Revlon is leveraging the customer loyalty to good effect | Provide Revlon medium term competitive advantage |
Revlon 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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