VRIO Analysis of Innovation Renovation The Nespresso Story

Posted by Zachary Edwards on Mar-22-2018

The VRIO Analysis of Innovation Renovation The Nespresso Story will look at each of its internal resources one by one to assess whether these provide sustained competitive advantage. The Innovation Renovation The Nespresso Story VRIO Analysis also mentions at each stage whether these resources could be improved to provide a greater competitive advantage. Lastly, the resources analysed are summarised as to whether they offer sustained competitive advantage, has an unused competitive advantage, temporary competitive advantage, competitive parity or competitive disadvantage.

Valuable

• The Innovation Renovation The Nespresso Story VRIO Analysis shows that the financial resources of Innovation Renovation The Nespresso Story are highly valuable as these help in investing into external opportunities that arise. These also help Innovation Renovation The Nespresso Story in combating external threats.
• According to the VRIO Analysis of Innovation Renovation The Nespresso Story, its local food products are a valuable resource as these are highly differentiated. This makes the perceived value for these by customers high. These are also valued more than the competition by customers due to the differentiation in these products.
• The Innovation Renovation The Nespresso Story VRIO Analysis shows that Innovation Renovation The Nespresso Story's employees are a valuable resource to the firm. A significant portion of the workforce is highly trained, and this leads to more productive output for the organisation. The employees are also loyal, and retention levels for the organisation are high. All of this translates into greater value for the end consumers of Innovation Renovation The Nespresso Story's products.
• According to the VRIO Analysis of Innovation Renovation The Nespresso Story, its patents are a valuable resource as these allow the firm to sell its products without competitive interference. This results in greater revenue for Innovation Renovation The Nespresso Story. These patents also provide Innovation Renovation The Nespresso Story with licensing revenue when it licenses these patents out to other manufacturers.
• The Innovation Renovation The Nespresso Story VRIO Analysis shows that Innovation Renovation The Nespresso Story’s distribution network is a valuable resource. This helps it in reaching out to more and more customers. This ensures greater revenues for Innovation Renovation The Nespresso Story. It also ensures that promotion activities translate into sales as the products are easily available.
• According to the VRIO Analysis of Innovation Renovation The Nespresso Story, its cost structure is not a valuable resource. This is because the methods of production lead to greater costs than that of competition, which affects the overall profits of the firm. Therefore, its cost structure is a competitive disadvantage that needs to be worked on.
• The Innovation Renovation The Nespresso Story VRIO Analysis shows that the research and development at Innovation Renovation The Nespresso Story is not a valuable resource. This is because research and development are costing more than the benefits it provides in the form of innovation. There have been very few innovative features and breakthrough products in the past few years. Therefore, research and development are a competitive disadvantage for Innovation Renovation The Nespresso Story. It is recommended that the research and development teams are improved, and costs are cut for these.

Rare

• The financial resources of Innovation Renovation The Nespresso Story are found to be rare according to the VRIO Analysis of Innovation Renovation The Nespresso Story. Strong financial resources are only possessed by a few companies in the industry.
• The local food products are found to be not rare as identified by Innovation Renovation The Nespresso Story VRIO Analysis. These are easily provided in the market by other competitors. This means that competitors can use these resources in the same way as Innovation Renovation The Nespresso Story and inhibit competitive advantage. This means that the local food products result in competitive parity for Innovation Renovation The Nespresso Story. As this resource is valuable, Innovation Renovation The Nespresso Story can still make use of this resource.
• The employees of Innovation Renovation The Nespresso Story are a rare resource as identified by the VRIO Analysis of Innovation Renovation The Nespresso Story. These employees are highly trained and skilled, which is not the case with employees in other firms. The better compensation and work environment ensure that these employees do not leave for other firms.
• The patents of Innovation Renovation The Nespresso Story are a rare resource as identified by the Innovation Renovation The Nespresso Story VRIO Analysis. These patents are not easily available and are not possessed by competitors. This allows Innovation Renovation The Nespresso Story to use them without interference from the competition.
• The distribution network of Innovation Renovation The Nespresso Story is a rare resource as identified by the VRIO Analysis of Innovation Renovation The Nespresso Story. This is because competitors would require a lot of investment and time to come up with a better distribution network than that of Innovation Renovation The Nespresso Story. These are also possessed by very few firms in the industry.

Imitable

• The financial resources of Innovation Renovation The Nespresso Story are costly to imitate as identified by the Innovation Renovation The Nespresso Story VRIO Analysis. These resources have been acquired by the company through prolonged profits over the years. New entrants and competitors would require similar profits for a long period of time to accumulate these amounts of financial resources.
• The local food products are not that costly to imitate as identified by the VRIO Analysis of Innovation Renovation The Nespresso Story. These can be acquired by competitors as well if they invest a significant amount in research and development. These also do not require years long experience. Therefore, the local food products by Innovation Renovation The Nespresso Story provide it with a temporary competitive advantage that competitors can too acquire in the long run.
• The employees of Innovation Renovation The Nespresso Story are also not costly to imitate as identified by the Innovation Renovation The Nespresso Story VRIO Analysis. This is because other firms can also train their employees to improve their skills. These companies can also hire employees from Innovation Renovation The Nespresso Story by offering better compensation packages, work environment, benefits, growth opportunities etc. This makes the employees of Innovation Renovation The Nespresso Story a resource that provides a temporary competitive advantage. Competition can acquire these in the future.
• The patents of Innovation Renovation The Nespresso Story are very difficult to imitate as identified by the VRIO Analysis of Innovation Renovation The Nespresso Story. This is because it is not legally allowed to imitate a patented product. Similar resources to be developed and getting a patent for them is also a costly process.
• The distribution network of Innovation Renovation The Nespresso Story is also very costly to imitate by competition as identified by the Innovation Renovation The Nespresso Story VRIO Analysis. This has been developed over the years gradually by Innovation Renovation The Nespresso Story. Competitors would have to invest a significant amount if they are to imitate a similar distribution system.

Organisation

• The financial resources of Innovation Renovation The Nespresso Story are organised to capture value as identified by the VRIO Analysis of Innovation Renovation The Nespresso Story. These resources are used strategically to invest in the right places; making use of opportunities and combatting threats. Therefore, these resources prove to be a source of sustained competitive advantage for Innovation Renovation The Nespresso Story.
• The Patents of Innovation Renovation The Nespresso Story are not well organised as identified by the Innovation Renovation The Nespresso Story VRIO Analysis. This means that the organisation is not using these patents to their full potential. An unused competitive advantage exists that can be changed into a sustainable competitive advantage if Innovation Renovation The Nespresso Story starts selling patented products before the patents expire.
• The distribution network of Innovation Renovation The Nespresso Story is organised as identified by the VRIO Analysis of Innovation Renovation The Nespresso Story. Innovation Renovation The Nespresso Story uses this network to reach out to its customers by ensuring that products are available on all of its outlets. Therefore, these resources prove to be a source of sustained competitive advantage for Innovation Renovation The Nespresso Story.

From the VRIO Analysis of Innovation Renovation The Nespresso Story, it was identified that the financial resources and distribution network provide a sustained competitive advantage. The patents are a source of unused competitive advantage. There exists a temporary competitive advantage for employees. There exists a competitive parity for local food products. Lastly, the cost structure of Innovation Renovation The Nespresso Story is a competitive disadvantage. Research and Development is also a competitive disadvantage.