This is a discussion board thread , please read my discussion board post and ans

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This is a discussion board thread , please read my discussion board post and answer the question a fellow student asked which is

Nicely laid out answer, Muhamad. You gave an example of a substitutable good with soft drinks and energy drinks, but do you have any good examples of a non-substitutable good?

Strategy diamond was developed by Donald Hambrick and James Fedrickson how actual bits and pieces of strategy fits together as a wholesome piece. The five major elements of this kind of a strategy are Arenas, Vehicles, Differentiation, Staging and Economic Logic.

Arenas, focuses on where we will be active and where our emphasis will be.

Vehicles focuses on how we will get there.

Differentiation focuses on how we will win in the difficult situation.

Staging elaborates on how will be our moves and speeds are different levels.

All these four transforms into economic logic.

Porter's 5 forces model is the one that focuses on the five different forces that determine the competitive power in a business situation. Those five forces are, Supplier power, buyer power, Competitive rivalry, Threat of substitution, Threat of new entry. All these five forces give an edge over the business situation.

Resources are the things that are available naturally in our environment that could be put to use for the purpose of manufacturing and for other services. The mankind living in this world makes use of those resources for their own productive use.

Capabilities are the capacity of the individual to handle a situation effectively. The individual’s capability will come through only in a difficult situation.

VRINE Framework:

It is used by a firm to determine whether its resources and capabilities can be used to gain competitive advantage.

The various elements of the framework are as under –

(1) V = Valuable:

This element enables the firm to find out whether its resources and capabilities are valuable enough to satisfy market demand properly or protect the firm from its competitors. e.g., engineering excellence of Mercedes is very valuable to it and Mercedes cars are very expensively priced.

(2) R = Rare:

This element helps the firm to decide whether its resource or capability is rare in the marketplace. e.g., Honda’s engine technology is rare.

(3) I = Inimitable:

As per this element, the firm can come to know whether its resource or capability can be imitated by its competitors. e.g., Intel’s microprocessor technology is very difficult to imitate by its competitors.

(4) N = Non-substitutable:

This element assists the firm to evaluate whether its resource or capability can be substituted by its competitors. e.g., soft drink is often substituted by energy drink.

(5) E = Exploitable:

This element aids the firm to assess whether it is able to exploit its resources and capabilities to derive maximum benefits. e.g., Pepsi and Coca-Cola exploit their excellent distribution networks to cover a wide area of the market and reach a very large number of customers.

An example of a company making extensive use of VRINE framework is the famous French fashion company Louis Vuitton. Even small businesses can make use of this framework to analyze their resources and capabilities.

Explanation / Answer

Strategy diamond was developed by Donald Hambrick and James Fedrickson how actual bits and pieces of strategy fits together as a wholesome piece. The five major elements of this strategy :

Arenas : These are the areas the organization determines its target market and the segmentation of the market. This phase decides the value creation technology. The core competitive advantages the organization has for itself to stand in the market and become a brand.

Vehicles : This phase explains what are the vehicles we need to get their and reach put objectives & goals. Strategies like giving essential training to the employees.

Differentiation : This phase focuses on how we will win in the difficult situation. What are the measure we need to take to overcome a situation. How are we placing the product, what are the core competitive advantages we have to show our product innovation and research in differentiation strategies.

Staging and placing elaborates on how will be our moves and speeds are different levels. How we need to focus and place our product in the market. How do we increase customer satisfaction levels and customer retention strategies. What are the strategies we need to implement to strengthen our brand in the target market.

All these four transforms into economic logic

There are good examples of a non-substitutable good : Any labelled and brand identified company, highly premium product is a good example of a non-substitutable product . Suppose I want to buy a phone, some small branded company with less pricing may not give the key features I am looking for. Ex: Iphone. The camera quality and the performance are the key issues that are not substitutable in the product even when the other product is offered at a very less price. Ex: Postal Services cannot be substituted by the email services, both are equally popular and has gained importance over the decades but there are not substitutes to each other even though they are for the same purpose to convey the message.

The VRINE strategy explain the same theory. The product may not give the satisfaction to the customer, even though the product is offered at a very minimum price. The competitor cannot gain the same profit margins since the customer is loyal to the first company. When the product is very difficult to substitute and highly valuable resource then the company attains a sustainable competitive advantage over its competitors in the target market.

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