Internal Analysis of
Analysis代写 This report is to conduct an internal analysis of the business environment of with the VRIN model and the Value Chain Analysis (VAC) model
is a athleisure brand which has been a leading-edge company in the industry.Analysis代写 in the case of , the company managed to achieve business success through its effective leadership, culture and transition.
However, Analysis代写 there are also problems faced by to be responded. This report is to conduct an internal analysis of the business environment of with the VRIN model and the Value Chain Analysis (VAC) model, and to compare the effectiveness of the models further.
To begin with, an overview of Lululemon will be given along with identifications of its vision, mission and business-level strategies. After that, the VRIN model will be applied to analyse the internal dethronement of the company to identify the sustained sources of competitiveness. Analysis代写 Then, the VAC model will also be leveraged to evaluate its business success and performance of each step.
After that, a discussion about the strengths of the models will be given respectively.Analysis代写 In the end, a conclusion will be given that the VRIN model would be more effective for Lululemon to develop competitive strategies in the future.
As a company that makes technical athletic clothes for yoga, running, working out and most other sweaty pursuits, Lululemon has become a leading-edge sports apparel retailer. The vision proposed by Lululemon is to ‘elevate the world from mediocrity to greatness’.Analysis代写 At the same time, it has claimed its mission as making contributions to enable people to realise longer and healthier lives with more fun.
In fact, the market of athleisure has been a blue-sea market in which there are little competition before it entered the market.Analysis代写 Producers of athletic wears used to focus on the functions of products, while neglecting the emotional functions.
As a result, Lululemon identified the business opportunities to provide athleisure products used in Yoga activities for women consumers. Analysis代写 Who are more focused on the emotional functions of the products. In this way, Lululemon developed a business strategy to occupy the market by promoting a healthier lifestyle among the customers with products attached with emotional functions.
Further, it is implementing a operation strategy by focusing on vertical retail model.Analysis代写 The head office of the company was named the store Support Center (SSC), showing the significant role played by roles in its business model. It has been pointed out that a majority of its revenues were from the sells of the stores. With such a strategy, Lululemon managed to achieve a high cash turnover ratio which contributed its high financial performance.
Moreover, Lululemon has been committed to creating a community culture focused on healthy lifestyle. Analysis代写 With such strategies, the company has achieved business success in the athleisure market.
The VRIN model checks the strategic capability of business organisations by evaluating the sources of competitive advantages.Analysis代写 Four types of criteria to assess the strategic capability are identified by the model including valuable, rare, difficult to imitate and supported by organisation.
For organisations to develop and maintain strategic competitive advantages, the resources and capabilities possessed by the organisations are supposed to be of great value to the realisation of objectives.Analysis代写 At the same time, the resources and capabilities should also be difficult to be found in the business environment, which is referred to as rareness (Knott 2015, p. 138).
Moreover, the sources of competitive advantages should be difficult to be imitated by the rivals,Analysis代写 which ensures the sustainability of the strategic competitiveness.
Additionally, the sources should be supported by organisation to make sure that the organisations could utilise them to achieve and maintain competitiveness in the long term, while being essential to the operation of the organisation. Analysis代写 When making strategic plans, the leaders should be aware of the constitutions of the core competitive advantage of the organisation, which would create sustainable competitiveness and excellent performance.
If there are no differences between the organisations and the rivals, it would be impossible for them to achieve more profits and higher business performance.Analysis代写 With the resources and capabilities that meet with the criteria of VRIN, organisations would manage to achieve the competitive advantages in the market continuously (Lin et al. 2012, p. 39).
In the case of Lululemon, an internal analysis of the company could be achieved by applying the VRIN model. Tracing sources of competitive advantages of the company, it could be found that its competitiveness mainly originate from the vertical retail model, unique value proposition, and its view of customers.Analysis代写 Applying the model of VRIN in the factors, the competitive performance and performance of each factor could be seen in figure 1.
To be specific, one major source of its competitiveness is its unique value propositions. Besides manufacturing and providing high-quality products to consumers, Lululemon is also creating and delivering a differentiated lifestyle which is healthier with more funs. This unique value proposition is valuable, rare, difficult to imitate by the rivals, and supported by organisation.Analysis代写 In this sense, this source of competitive advantages is sustained competitive advantage with a high performance.
Another major source of its competitiveness is the vertical retail model. As presented above, with this model, Lululemon has achieve a high cash turnover ratio leading to its financial advantages.Analysis代写 Specially, the model is valuable, rare, and difficult to imitate.
However, the vertical retail model is no longer essential for its business in modern society because of the increasing significance of online shopping (Hazlett 2015, p. 37). In this sense, it could be seen that the vertical retail model is a kind of temporary competitive advantage for the company with a performance above normal. Its view of customers as important feedback for its products is another source of its competitiveness.Analysis代写
Applying the VRIN model, it could be found that this factors is valuable to the company, while not being rare in the industry.Analysis代写 in this way, the view of customers is a competitive parity of Lululemon, with a normal performance.
Figure 1: VRIN analysis of Lululemon
|Valuable||Rare||Difficult to imitate||Supported by orgnisation||Competitive implications||Performance|
|Value proposition||Y||Y||Y||Y||Sustained competitive advantage||Above normal|
|Vertical retail model||Y||Y||Y||N||Temporary competitive advantage||Above normal|
|View of customers||Y||N||Competitive parity||Normal|
The Value Chain analysis model is focused on the chain of events within the company from the procurement of raw material to the delivery and the services after-sale. The model suggests that the company is supposed to add further value to the products in each step of the chain.Analysis代写 With this model, organisations would be able to identify the value creation activities in the whole business process (Fearne et al. 2012, p. 65).
The business activities are classified into two categories including primary activities and support activities. Analysis代写 Among the primary activities, there are inbound logistics, operation, outound logistics, marketing and sales, and service. Such primary activities are fundamental to the business activities of a company, while it could add values to the products in each step.
Concerning the support activities, there are four steps of firm infrastructure, human resource management, technology development, and procurement. Analysis代写 It is suggested that such supportive activities are complementary steps to the primary activities, while organisation could also add value to the products by optimising these activities (Soosay et al. 2015, p. 24).
Applying the Value Chain Analysis to view Lululemon, the activities within its business process which has created value for the customers could be identified.Analysis代写 In the case of Lululemon, it could be found that the additional value as the source of its competitiveness are mainly created in the steps of operation, marketing and sales, and human resource management in figure 2.
Specifically, the operation activities have helped to distinguish its brand with other companies. By focusing on the athleisure market through Yoga wears and promoting a healthier and favoured lifestyle, the operation activities of Lululemon has been able to create additional values for the customers. Analysis代写 The marketing and sales activities are another source of its competitive advantages in the market.
Leveraging a successful grassroot marketing strategy instead of employing celebrities for advertisements, Lululemon managed to reduce the costs of marketing while achieving good marketing effects. At the same time, the vertical retail strategy enabled it to achieve efficient sales.Analysis代写 Human resource management is also a key step in which Lululemon is creating values for customers. By focusing on training the employees, Lululemon managed to improve the competitiveness of its human resources.
Figure 2: the Value Chain Analysis
Based on the analysis above, it could be found that there are both strengths of the Value Chain Analysis and the VRIN model. To be specifically, applying the VRIN model helps organisations to realise the sources of competitive advantages, along with the sustainability and performance of the sources.Analysis代写 With this model, the managers would be able to identify the core competitiveness of the organisation which would maintain effective in the long term.
In this way, the analysis based on the VRIN model helps to identify the strategies to be implemented in the future to achieve sustainable competitive advantages.Analysis代写 In the case of Lululemon, it could be found that this model helps to recognise the key resources and capabilities of the company in the internal environment.
After identifying the competitive implications of each source, it helps to identify the unique value proposition has been the sustained competitive advantage of the brand. Analysis代写 In this way, it is clear for the company to focus on enhance this competitive advantage in the future to achieve sustained competitiveness and business performance.
Applying the Value Chain Analysis model, a critical analysis of the internal dethronement could be obtained. With a VAC model, the whole business of an organisation could be analysed explicitly to find the steps as the sources of value creation. Analysis代写 Each step in the value chain is critical for the business success of the organisation. By conducting a VAC analysis, the performance of each step in creating additional value for customers could be evaluated.
In this way, the organisation would be able to identify the key steps to be enhanced or improved to strength its ability to distinguish the products with those of the rivals’ (David & Abraham 2018, p. 57). Analysis代写 In the case of Lululemon, it could be found that the VAC model has enabled the company to identify the steps within the its business process that are critical to create additional values.
Specifically, Lululemon has been able to leverage the steps of operation, marketing and sales, and human resource management to support the realisation of its strategies. Analysis代写 At the same time, the other categories of primary and supportive activities could be improved in the future to find new approaches to add values to the products.
Based on the internal analysis and discussion about the two approaches, it could be found that VRIN model is better for Lululemon to sustain its business performance and resolve the problems it is faced with. Analysis代写 According to the internal analysis through the VRIN model, Lululemon managed to recognise that its unique value proposition has been a sustained competitive advantage over the rivals.
In this sense, the company could take measures enhance this advantage by developing new strategies to deliver its value proposition (Knott 2016, p. 99). Comparatively, the VAC approach managed to provide an overview of its business process and sources of value creation.Analysis代写 However, this approach is less effective in identifying the directions for Lululemon to enhance its competitive advantages in the future.
To conclude, this essay has examined the internal environment of Lululemon with two models while finding that the VRIN model is more effective compared with the VCA model. Analysis代写 The VRIN model helps to identify that the unique value proposition of the brand is a sustained source of its competitive advantages.
The VCA model pointed out three key steps in its business process in value creation. Further, it is found that the VRIN proves to be more effective in developing competitive strategies for Lululemon.Analysis代写
David, WC & Abraham, S 2018, ‘Using value-chain analysis to discover customer’s strategic needs’, Strategy & Leadership, vol. 36, no. 4, pp. 55-61.
Fearne, A, Martinez, MG & Dent, B 2012, ‘Dimensions of sustainable value chains: implications for value chain analysis’, Supply Chain Management: An International Journal, vol. 17, no. 1, pp. 62-78.
Hazlett, D 2015, ‘Trends and challenges in digital business innovation’, Foresight, vol. 17, no. 6, pp. 17-34.
Knott, PJ 2015, ‘Does VRIO help managers evaluate a firm’s resources?’. Management Decision, vol. 53, no. 8, pp. 137-145.
Knott, P 2016, ‘Integrating resource-based theory in a practice-relevant form’, Journal of Strategy and Management, vol. 2, no. 2, pp. 97-106.
Lin, C, Tsai, H, Wu, Y & Kiang, M 2012, ‘A fuzzy quantitative VRIO-bsed framework for evaluating organisational activities’, Management Decision, vol. 50, no. 8, pp. 35-49.
Soosay, C, Fearne, A & Dent, B 2015, ‘Sustainable value chain analysis – a case study of Oxford Landing from vine to dine’, Supply Chain Management: An International Journal, vol. 17, no. 1, pp. 23-38.