MNG3701
Assignment 2
Due 2025
,1. RBV Analysis of Clicks’ Internal Environment
Theoretical Overview: RBV, VRIN and VRIO
The Resource-Based View (RBV) explains organisational performance by focusing on
what happens inside the firm rather than only on external market forces. The central
idea is that certain internal resources and capabilities can allow a business to achieve
and maintain superior performance. Not all resources qualify as strategic; they need to
satisfy specific conditions often summarised in the VRIN/VRIO framework.
Valuable: The resource must add value by improving efficiency, enabling the firm
to exploit market opportunities, or protecting it from threats.
Rare: The resource should be scarce and not widely possessed by competitors.
Inimitable: Competitors should find it extremely costly or difficult to copy due to
unique historical conditions, social complexity, or causal ambiguity.
Non-substitutable: The benefits from the resource cannot be easily replaced by
another alternative.
Organisation (O in VRIO): The firm must have the right systems, culture, and
structure to make full use of these resources.
When a firm possesses resources that meet these conditions and is organised to
leverage them effectively, it can achieve a sustained competitive advantage. If the
criteria are only partly met, the outcome may be a temporary edge or simply
competitive parity.
Application of RBV to Clicks
1. Nationwide Footprint and Branch Network (Valuable; Moderately Rare)
By 2023, Clicks had built one of the largest health and beauty retail networks in South
Africa, operating close to 900 stores, over 700 in-store pharmacies, and more than 200
nurse-run clinics. This geographic spread means that around half of South Africans live
within a short distance of a Clicks outlet. Such accessibility offers customers
, convenience and creates habitual use for prescription collections and health purchases.
While other players such as Dis-Chem have a sizeable presence, Clicks’ coverage
remains broader, making this a valuable resource. However, because competitors can
expand, the rarity factor is moderate, and the advantage may be temporary rather
than permanent.
2. Customer Loyalty Programme and Data Analytics (Valuable; Difficult to Imitate)
The ClubCard loyalty scheme has more than ten million active members and accounts
for the majority of group sales. The scale of data generated allows Clicks to design
highly targeted promotions, improve category management, and enhance customer
retention. Developing an equivalent programme would take competitors years of
investment in both customer trust and data infrastructure. The difficulty in replicating
these capabilities—because of social complexity and causal ambiguity—makes this
resource not only valuable but also hard to imitate, creating conditions for a sustained
competitive advantage.
3. Private-Label and Exclusive Products (Valuable; Partly Inimitable)
House brands and exclusive ranges contribute a substantial share of sales and deliver
higher margins than branded goods. These products also strengthen brand identity and
customer loyalty. While competitors also offer private-label goods, Clicks’ long-standing
supplier relationships, scale, and established consumer trust give it an edge. The
strategy is therefore valuable and somewhat inimitable, though not entirely rare,
since rivals are also moving in this direction.
4. Supply Chain and Wholesale Integration (Valuable; Rare; Hard to Replicate)
Through its subsidiary United Pharmaceutical Distributors (UPD), Clicks controls South
Africa’s leading pharmaceutical wholesaler, with billions in annual turnover. This vertical
integration provides cost efficiencies, dependable supply, and stronger service quality
for both its own outlets and external clients. Building a comparable distribution system
would require huge capital outlays, regulatory navigation, and supplier contracts—
Assignment 2
Due 2025
,1. RBV Analysis of Clicks’ Internal Environment
Theoretical Overview: RBV, VRIN and VRIO
The Resource-Based View (RBV) explains organisational performance by focusing on
what happens inside the firm rather than only on external market forces. The central
idea is that certain internal resources and capabilities can allow a business to achieve
and maintain superior performance. Not all resources qualify as strategic; they need to
satisfy specific conditions often summarised in the VRIN/VRIO framework.
Valuable: The resource must add value by improving efficiency, enabling the firm
to exploit market opportunities, or protecting it from threats.
Rare: The resource should be scarce and not widely possessed by competitors.
Inimitable: Competitors should find it extremely costly or difficult to copy due to
unique historical conditions, social complexity, or causal ambiguity.
Non-substitutable: The benefits from the resource cannot be easily replaced by
another alternative.
Organisation (O in VRIO): The firm must have the right systems, culture, and
structure to make full use of these resources.
When a firm possesses resources that meet these conditions and is organised to
leverage them effectively, it can achieve a sustained competitive advantage. If the
criteria are only partly met, the outcome may be a temporary edge or simply
competitive parity.
Application of RBV to Clicks
1. Nationwide Footprint and Branch Network (Valuable; Moderately Rare)
By 2023, Clicks had built one of the largest health and beauty retail networks in South
Africa, operating close to 900 stores, over 700 in-store pharmacies, and more than 200
nurse-run clinics. This geographic spread means that around half of South Africans live
within a short distance of a Clicks outlet. Such accessibility offers customers
, convenience and creates habitual use for prescription collections and health purchases.
While other players such as Dis-Chem have a sizeable presence, Clicks’ coverage
remains broader, making this a valuable resource. However, because competitors can
expand, the rarity factor is moderate, and the advantage may be temporary rather
than permanent.
2. Customer Loyalty Programme and Data Analytics (Valuable; Difficult to Imitate)
The ClubCard loyalty scheme has more than ten million active members and accounts
for the majority of group sales. The scale of data generated allows Clicks to design
highly targeted promotions, improve category management, and enhance customer
retention. Developing an equivalent programme would take competitors years of
investment in both customer trust and data infrastructure. The difficulty in replicating
these capabilities—because of social complexity and causal ambiguity—makes this
resource not only valuable but also hard to imitate, creating conditions for a sustained
competitive advantage.
3. Private-Label and Exclusive Products (Valuable; Partly Inimitable)
House brands and exclusive ranges contribute a substantial share of sales and deliver
higher margins than branded goods. These products also strengthen brand identity and
customer loyalty. While competitors also offer private-label goods, Clicks’ long-standing
supplier relationships, scale, and established consumer trust give it an edge. The
strategy is therefore valuable and somewhat inimitable, though not entirely rare,
since rivals are also moving in this direction.
4. Supply Chain and Wholesale Integration (Valuable; Rare; Hard to Replicate)
Through its subsidiary United Pharmaceutical Distributors (UPD), Clicks controls South
Africa’s leading pharmaceutical wholesaler, with billions in annual turnover. This vertical
integration provides cost efficiencies, dependable supply, and stronger service quality
for both its own outlets and external clients. Building a comparable distribution system
would require huge capital outlays, regulatory navigation, and supplier contracts—
