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VRIO Analysis 

2.Valuable
Высокая репутация, патенты и узнаваемость бренда, который создавался в течение
долгого времени благодаря постоянным усилиям и качественному предложению
продукции Zara. Регулярное участие в акциях социальной ответственности укрепляет
имидж бренда. Большая дистрибьюторская сеть по всему миру и даже в странах, где
отсутствуют производственные подразделения. За последние несколько лет появилось
очень мало инновационных функций и прорывных продуктов. финансовые ресурсы
Zara очень ценны и помогает Zara бороться с внешними угрозами. Zara использует
вертикальную интеграцию и самостоятельно управляет всей цепочкой поставок -
управляет всем дизайном, собственно функции складирования, распределения и
логистики, а не полагается на третью сторону. Преимущество вертикального интеграла
может снизить операционные расходы, потому что он имеет превосходно
продуманную организационную структуру. Магазины Zara велики, как и магазины
люксовых брендов, таких как Louis Vuitton, Prada, Burberry и Armani, и Zara также
строит свои магазины либо рядом с этими роскошными брендами, либо в
высококлассных торговых центрах. Zara внимательно следит за изменениями вкусов
потребителей и следует мировым тенденциям.
3.Rare
Глобальное присутствие и расширенную клиентскую базу. Высокую склонность к
осознанному и управляемому риску. Zara владеет редким ресурсом, который позволил
компании повысить проникновение, улучшить доступность, повысить узнаваемость
бренда за счет адаптации к региональным культурам. Zara наняла 400 разных
национальностей и молодых дизайнеров, чтобы познакомиться с последними
тенденциями моды со всего мира. Это потому, что в разных странах тенденции моды
не будут одинаковыми. Хотя большая часть одежды Zara заимствована из различных
модных событий, таких как выпуск моды, выставки и модные подиумы, это одна из
причин, по которой Zara стала известной во всем мире. Zara ориентируется на быструю
моду. Zara будет обновлять новые продукты два раза в неделю, постоянные клиенты
Zara будут знать, что, если они не купят одежду в том, что они делают, позже одежда
больше не будет доступна. Поэтому они заинтересованы в немедленной покупке.
4.Inimitable
Скопировать ресурсы и возможности Zara возможно только в долгосрочной
перспективе - потребуется несколько лет, чтобы создать модель вертикальной
интеграции с этим своего рода цепочка поставок и даже больше для создания
организационной структуры (культуры), которая есть у Zara. Мы
следует также учитывать огромные затраты, которые эти фирмы понесут, чтобы
скопировать модель, которую фирмы зачастую не могут реализовать. Вертикально
интегрированная бизнес-модель очень трудно копируется так как не может быть
реализована за короткий период времени, что требует много времени и усилий.
Ресурсы и возможности Zara сложно скопировать и создают устойчивое конкурентное
преимущество.
5.Organization
Zara обладает значительной финансовой устойчивостью в дополнение к сильному
бренду. Финансовая сила поддерживает компанию в изучении возможностей для
разработки и запуска новых продуктов. Технологический прогресс и интеграция также
позволяют беспрепятственно управлять глобальными операциями для компании, что
важно для поддержания эффективного управления логистикой. Zara вкладывает
значительные средства в исследования и разработки, что позволяет ей быть в курсе
рыночных тенденций, изменений вкусов и поведения потребителей. Zara имеет
широкую стандартизированную маркетинговую стратегию.

Цепочка поставок: Zara обновляет свою онлайн- и розничную коллекцию два раза в
неделю. 10 логистических центров Zara доставляют товары в любую точку мира в
течение 48 часов. В Inditex также есть собственная команда, которая разрабатывает
программное обеспечение, которое удваивает скорость, с которой компания
отправляет заказы.
Команда дизайнеров: в Inditex работает команда из 700 обученных дизайнеров,
которые превращают желания клиентов в проекты. Команда дизайнеров выпускает 50
000 креативов в год. И им требуется всего 3 недели, чтобы доставить дизайн с
чертежной доски в магазины.
Переход на онлайн: Inditex инвестирует 3 миллиарда долларов в расширение своих
онлайн-продаж. Инвестиции направлены на развитие привлекательного опыта
онлайн-покупок и интеграцию существующей физической инфраструктуры. К 2022 году
компания планирует генерировать четверть выручки за счет онлайн-продаж.
Причина такого успеха Zara в том, что Zara овладела игрой быстрой моды. Но из-за
растущей озабоченности по поводу окружающей среды и этики быстрая мода
оказывается палкой о двух концах.

Из анализа VRIO Zara было установлено, что финансовые ресурсы и дистрибьюторская


сеть обеспечивают устойчивое конкурентное преимущество. Патенты - это источник
неиспользованного конкурентного преимущества. Для сотрудников существует
временное конкурентное преимущество. Для местных продуктов питания существует
конкурентный паритет. Наконец, структура затрат Zara является недостатком для
конкуренции. Исследования и разработки также являются недостатком для
конкуренции.
Competencies that are valuable help the Zara in exploiting the opportunities
available and in neutralizing the threats from the internal and external environment.
These competencies allow a business to grow, develop, and expand further.

2.1.Brand image in terms of social responsibility

 The Zara has a defined corporate social responsibility function


 The Zara regularly engages in social responsibility actions, and makes them
transparent
 All stakeholders are acknowledged about the company’s activities, and social
responsibility actions through official documents including the annual report,
and website
 Engagement in CSR activities allows Zara to build a non-substitutable
competency- as engagement and strategies for CSR are integrated with the
broader business goals and developed strategically.

2.2.Brand image

 The Zara brand image is unique and contains high brand integrity
 The brand image has been developed over a long time, and through
continuous effort and quality product offering by the Zara
 The brand image represents trust and honesty on part of the Zara\
 The brand image is a source of competency because it is unique to the Zara,
and cannot be imitated by other players, r be substituted by them.

2.3.Reckoned brand 

 The Zara brand enjoys high brand recognition


 This brand recognition is a direct result of high brand integrity and appositive
brand equity
 The high brand recognition is important for not only sales but also for the
company value
 The brand image is a result of long term brand investment, and cannot be
substituted by other players in the industry
2.1.Relationship with suppliers

 The Zara is valued globally for its distribution system


 The company has also successfully provided products, and made them
extremely accessible for countries where operating units do not exist
 This has been made possible through the highly efficient distribution system
of the company that supplies products globally
 The company’s relation with dealers and suppliers is particularly string and
based on strictly followed standards and criteria
 This is a valuable resource for the company that allows the Zara Company to
exploit further opportunities in different regions and countries globally

2.2.Propensity for innovation 

 The Zara is highly innovative in its product offerings d services


 The innovation also expands into other functional areas of the company such
as marketing
 The innovation is helpful in making processes more effective for the company
 This allows the company to lower its operational costs, and achieve
economies of scale
 As such, the propensity for innovation has been a valuable resource for the
company that helps it navigate environmental threats effectively, and benefit
from the opportunities presented in the environment

2.3.Ability to raise capital

 The Zara is large conglomerate. 


 The company is able to raise equity through internal source
 The ability to raise capital internally is important for the company’s planned
expansion and diversification
 This ability has also allowed the company to engage in mergers and
acquisitions, and thereby reduce the market competition
 The Zara has also been able to gain increased market penetration and market
access through its ability to raise capital
 The ability to raise capital is important for the company to be able to take
advantage of potential opportunities in the market. 
 The Zara VRIO Analysis shows that the financial resources of Zara are highly
valuable as these help in investing into external opportunities that arise.
These also help Zara in combating external threats.
 According to the VRIO Analysis of Zara, 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 Zara VRIO Analysis shows that Zara'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 Zara's products.
 According to the VRIO Analysis of Zara, its patents are a valuable resource as
these allow the firm to sell its products without competitive interference. This
results in greater revenue for Zara. These patents also provide Zara with
licensing revenue when it licenses these patents out to other manufacturers.
 The Zara VRIO Analysis shows that Zara’s distribution network is a valuable
resource. This helps it in reaching out to more and more customers. This
ensures greater revenues for Zara. It also ensures that promotion activities
translate into sales as the products are easily available.
 According to the VRIO Analysis of Zara, 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 Zara VRIO Analysis shows that the research and development at Zara 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 Zara. It is recommended that the research and development
teams are improved, and costs are cut for these.

Competencies that are rare in nature are possessed and developed by only a handful
of firms in the industry, and help in building competitive advantage for the Zara.

3.1.International presence

 The Zara has a global presence, and operates in multiple countries and
regions
 The global presence has allowed the Zara to build an expanded consumer
base and earn revenue through multiple regions
 This has given the company not only higher financial strength but also higher
cultural exposure and international recognition
 The global heritage and experience is  rare resource that has allowed Zara to
enhance 

3.2.Problem solving skills

 The Zara fosters an organizational culture of problem solving amongst its


employees and management
 This allows higher teamwork, creativity and innovation in the company
 The innovation in turn leads to higher competitiveness, which leads to
competitive advantage and benefit for the company in the market place in the
short run and the long run
 This is thus a rare competency for the company that allows it to steer away
from potential threats, and benefit from opportunities.

3.3.Risk taking characteristics

 The Zara shows high propensity towards taking calculated and guided risks
 This capability is important for a company to be able to grow and expand –
especially in unknown regions and countries.
 The Zara’s risk assessment function is strong, and allows the company to
identify potential opportunities and take guided actions and steps to benefit
from.
 The ability to take risks is thus an important aspect and competency for
business growth for the Zara.

3.4.Adaptability

 The Zara has global operations and a global presence


 As such, the company has high exposure to global cultures and different
societal norms and values
 Being a global conglomerate and giant, the company has shown high
adaptability to different cultures through engaging in localization activities,
and marketing communication – as well as different managerial functions
 This localization is important for the company to gain penetration in different
local markets
 The localization however, if often guided by a standardized global strategy to
help different managerial functions perform optimally
 The ability of the Zara to adapt to different external environmental and
regional cultures is a rare resource that has allowed the company higher
penetration, improved accessibility, stronger brad recall, and greater visibility. 
 The financial resources of Zara are found to be rare according to the VRIO
Analysis of Zara. 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 Zara 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 Zara
and inhibit competitive advantage. This means that the local food products
result in competitive parity for Zara. As this resource is valuable, Zara can still
make use of this resource.
 The employees of Zara are a rare resource as identified by the VRIO Analysis
of Zara. 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 Zara are a rare resource as identified by the Zara VRIO
Analysis. These patents are not easily available and are not possessed by
competitors. This allows Zara to use them without interference from the
competition.
 The distribution network of Zara is a rare resource as identified by the VRIO
Analysis of Zara. This is because competitors would require a lot of
investment and time to come up with a better distribution network than that of
Zara. These are also possessed by very few firms in the industry.

These inimitable competencies help in adding value to the competitive advantage,


and long term sustainability for an organization. These resources and competencies
are hard and costly to imitate by the competing players

4.1.Quality product offering

 The Zara offers high quality products to consumers that have been a source
of the brand appeal
 The high and consistent quality leads to repeat purchases, and increases
consumption of Zara’s products
 This is an inimitable resource for the company as the high quality, and
specific of prediction are known internally to the top management of the
company only. 

4.2.Location of the stores/ placement in stores

 The Zara operates through multiple stores in different countries and regions
 All the places where the Zara stocks its products are easily accessible, and
provide higher visibility to the band
 Consumers can easily purchase the Zara’s offerings and products in all the
countries and regions it operates
4.3.Marketing communications 

 The Zara has made use of marketing communications strategically to induce


higher  consumption
 The strategic focus of the business sis enveloped by the organizational
culture, and the business vision under the strategic leadership – which in turn
is inimitable
 The marketing communications for the company are thus an inimitable
resource that have allowed the brand to maintain long term competitive
advantage internationally.

4.4.Competitive pricing

 The Zara has efficient production capacities that operate at economies of


scale
 The company has controlled operational costs that have been achieved
through expansion, and a consistent demand
 The company has also integrated technology to minimize costs, and improve
processes and operational internally
 This cost saving function allows Zara to continuously maintain competitive
pricing in comparison to competitors
 This is an inimitable resource for the Zara

4.5.Customer experience

 The Zara provides a unique customer experience to the customers


 The company offers customers high brand engagement with the experience
that is memorable, and relevant for the target groups
 The company engages with the customers at multiple touchpoints, and offers
a holistic experience that leads to customers wanting repeat purchases
 The engagement and brand experience for customers for the Zara has also
expanded beyond the basic product offering, and evolved into offering and
engaging consumers with relevant content generation that allows the brand to
increase its equity.
 This is thus a non-substitutable advantage enjoyed by the Zara
 The financial resources of Zara are costly to imitate as identified by the Zara
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 Zara. 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 Zara provide it
with a temporary competitive advantage that competitors can too acquire in
the long run.
 The employees of Zara are also not costly to imitate as identified by the Zara
VRIO Analysis. This is because other firms can also train their employees to
improve their skills. These companies can also hire employees from Zara by
offering better compensation packages, work environment, benefits, growth
opportunities etc. This makes the employees of Zara a resource that provides
a temporary competitive advantage. Competition can acquire these in the
future.
 The patents of Zara are very difficult to imitate as identified by the VRIO
Analysis of Zara. 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 Zara is also very costly to imitate by competition
as identified by the Zara VRIO Analysis. This has been developed over the
years gradually by Zara. Competitors would have to invest a significant
amount if they are to imitate a similar distribution system.

These resources are uniquely developed for the Zara, and cannot be used by
competing players in the industry. These resources have no substitutes, and thus
cannot be employed by companies other than the Zara, and as such allow the
company to exploit opportunities and make use of resources effectively for business
growth

5.1.Financial strength

 Zara enjoys substantial financial strength in addition to its brand strength


 The financial strength supports the company in exploring opportunities for
new product developments and launches
 The financial strength is also important in allowing the company to evaluate
potential mergers and acquisitions for gaining competitive advantage
 The financial strength has also been a source of value for the company in
helping it focus on innovation in product offerings, and maintaining consistent
quality thought out different countries where it operates
 The financial strength is also valuable because of the support it offers to the
company’s vast and well managed distribution system
 The financial strength is particularly important for the Zara in enabling it to
realize possibilities and opportunities –internally as well as externally

5.2.Technological integration and advancement

 The technological advancements and integration at the Zara are also an


important resource for developing competitive advantage
 The technological advancement allows the Zara to maintain effectivity and
efficiency in its various business processes and operations
 The technological advancement and integration also allows a smooth
management of global operations for the company which is important to
maintain effective logistic management
 The technological advancements and systematic integration is a competency
that allows the Zara to build long term competitive advantage over
competition.
5.3.Employee training

 The company provides in house trainings specific for different job roles and
job designs to its employees which helps them in achieving their desired job
responsibilities
 The training provided by the company refines individuals not only for their job
roles and professional growth, but also towards personal growth and
development
 The training and investment by the company in individuals leads to strong
organizational commitment, and is a valuable competency in allowing the
Zara to benefit through a strong and committed workforce. 

5.4.Investment in research and development

 The Zara makes substantial investments in research and development


 The research and development function at Zara enables it to stay abreast of
market trends and consumer behavior
 With knowledge of changing consumer tastes and preferences, Zara
Company is able to make use of its research and development function to
develop offerings that meet the changing tastes and demands
 Investment in articulate and focused R&D is a resource for the Coca Cola
Company that has allowed the business to maintain competitive focus and
exploit other resources effectively.

5.5.Distribution channels

 One of the greatest strengths and resources enjoyed by the Zara Company is
its control over, and development of distribution channels
 The company’s distribution system, and the supply chain comprises of a
number of different distribution channels – that re agent and dealer based,
and also owned and controlled by the company
 The mix of distribution channels allows the Zara to have access to, and
penetrate different markets, and increase the number of sales and
consumption of its products
 The articulate and intricately designed distribution network has proven to be
an inimitable resource for the company that has developed with time through
strong relations with suppliers and distributors.

5.6.Corporate leadership and vision

 The corporate leadership and vision are also non substitutable, and cannot be
applied to other firms in the industry
 The leadership provides unique strategic vision and direction to the company 
 The leadership also plays an important part in motivating employees and
settings business goals and targets to be achieved
 The Zara’s expansion and growth is directly related to the leadership it has.

5.7.Production capacity

 The Zara has high production capacities.


 The brand supplies products globally at different location, in over a hundred
countries
 The streamlined production process that employs effective and efficient
operational costs and inventory management systems provides a unique edge
and competitiveness to the Zara Company
 This in turn becomes a non-substitutable advantage for the company that
allows it to explore new regions efficiently as well. 

5.8.Human resources

 The Zara invests substantially in its human resources. 


 The human resource function of the brand is important in building the
competitive advantage for the company by providing it with improved talent
 The human resource function at the Zara is responsible for all employee
related activities – from recruiting to compensation management to
succession planning and training
 The human resource function is also important for maintaining the supportive
organizational culture at the Zara
 The human resource function is important for the Zara to grow and develop
further, and exploit other resources with smoothness.

5.9.Organizational culture

 The Zara enjoys a supportive and innovative organizational culture


 The organizational culture at the company allows growth and development of
not only the business at large, but also of individual employees
 The organizational culture is free sharing in information, and supports team
work and synergy
 This is an important competency and resource for the Zara which allows it to
grow internationally, and support various diversifications as well.

5.10.Marketing strategy

 The Zara has a broad standardized strategic focus for its marketing strategy
and communications
 This broader strategy is localized at different regional levels and customized
for countries based on different target groups and populations
 This customization has allowed the Zara to increase its visibility, and create
higher brand awareness
 The financial resources of Zara are organised to capture value as identified by
the VRIO Analysis of Zara. 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 Zara.
 The Patents of Zara are not well organised as identified by the Zara 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 Zara starts selling patented
products before the patents expire.
 The distribution network of Zara is organised as identified by the VRIO
Analysis of Zara. Zara 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 Zara.

Posted by Zachary Edwards on Mar-22-2018