, PLEASE USE THIS DOCUMENT AS A GUIDE TO ANSWER YOUR ASSIGNMENT
Conduct an internet search and access the Clicks Integrated Report for 2023. Read the
report and answer the questions that follow in an essay format.
Introduction
Strategic management enables organisations to understand both their internal strengths and external
challenges in order to build sustainable competitive advantage. Clicks Group Limited, as South
Africa’s leading health, beauty and pharmacy retailer, operates in a dynamic and highly competitive
environment shaped by economic pressures, regulatory constraints, evolving consumer lifestyles, and
technological advances. To assess the group’s strategic positioning, several frameworks can be
applied. The Resource-Based View (RBV) highlights Clicks’ internal resource position, while the
analysis of its business-level strategy shows how it competes within the industry. Furthermore,
applying Porter’s four-corner analysis to a major competitor such as Dis-Chem provides insights into
likely competitive responses. Lastly, a PESTEL analysis of the macro-environment identifies
external opportunities and threats that influence Clicks’ operations. Taken together, these analyses
provide a holistic understanding of how Clicks creates and sustains competitive advantage in a
challenging South African retail and healthcare market.
1. Use the RBV model to analyse the internal environment of Clicks Group Limited. In your
analysis do the following: Explain by means of examples the resource position of Clicks Group
Limited.
Analysing Clicks Group Limited’s Internal Environment through the Resource-Based View
(RBV)
The Resource-Based View (RBV) holds that sustained competitive advantage arises from
firm-specific resources and capabilities that are valuable, rare, inimitable and organised to capture
value (the VRIO/VRIN logic) (Barney, 1991). Building on this, Peteraf (1993) explains that
heterogeneity, ex post limits to competition, imperfect mobility and ex ante limits to competition
underpin durable advantage.
Theoretical Overview: RBV and the VRIO Logic
RBV views firms as bundles of heterogeneous resources—tangible and intangible—that can be
sources of rent when they are valuable (create or protect value), rare (not widely possessed by rivals),
inimitable (protected by causal ambiguity, social complexity or path dependency) and organised
(aligned structure, processes and governance) (Barney, 1991; Barney & Hesterly, 2008). Peteraf
(1993) complements this by specifying the economic conditions that allow advantages to persist. In
retail and pharmaceutical distribution, scale economies, loyalty networks, regulatory licences, data
assets and logistics competences frequently combine into hard-to-replicate capability systems rather
than single assets.
Financial Capital: Balance Sheet Strength as an Enabler (Valuable; Organised)
Financial resources enable investment in store expansion, technology and working capital for
distribution. In FY2023, Clicks reported group turnover of R41.6 billion, cash generated by
operations of R5.9 billion, and returned R2.3 billion to shareholders, alongside record capital
investment of R930 million—signals of strong internal funding capacity for growth. These financial
resources are valuable (fund strategic options) and the group appears organised to deploy them
(disciplined returns and capital allocation). However, financial capital is generally imitable; hence it
is a necessary but not sufficient source of sustained advantage.
Conduct an internet search and access the Clicks Integrated Report for 2023. Read the
report and answer the questions that follow in an essay format.
Introduction
Strategic management enables organisations to understand both their internal strengths and external
challenges in order to build sustainable competitive advantage. Clicks Group Limited, as South
Africa’s leading health, beauty and pharmacy retailer, operates in a dynamic and highly competitive
environment shaped by economic pressures, regulatory constraints, evolving consumer lifestyles, and
technological advances. To assess the group’s strategic positioning, several frameworks can be
applied. The Resource-Based View (RBV) highlights Clicks’ internal resource position, while the
analysis of its business-level strategy shows how it competes within the industry. Furthermore,
applying Porter’s four-corner analysis to a major competitor such as Dis-Chem provides insights into
likely competitive responses. Lastly, a PESTEL analysis of the macro-environment identifies
external opportunities and threats that influence Clicks’ operations. Taken together, these analyses
provide a holistic understanding of how Clicks creates and sustains competitive advantage in a
challenging South African retail and healthcare market.
1. Use the RBV model to analyse the internal environment of Clicks Group Limited. In your
analysis do the following: Explain by means of examples the resource position of Clicks Group
Limited.
Analysing Clicks Group Limited’s Internal Environment through the Resource-Based View
(RBV)
The Resource-Based View (RBV) holds that sustained competitive advantage arises from
firm-specific resources and capabilities that are valuable, rare, inimitable and organised to capture
value (the VRIO/VRIN logic) (Barney, 1991). Building on this, Peteraf (1993) explains that
heterogeneity, ex post limits to competition, imperfect mobility and ex ante limits to competition
underpin durable advantage.
Theoretical Overview: RBV and the VRIO Logic
RBV views firms as bundles of heterogeneous resources—tangible and intangible—that can be
sources of rent when they are valuable (create or protect value), rare (not widely possessed by rivals),
inimitable (protected by causal ambiguity, social complexity or path dependency) and organised
(aligned structure, processes and governance) (Barney, 1991; Barney & Hesterly, 2008). Peteraf
(1993) complements this by specifying the economic conditions that allow advantages to persist. In
retail and pharmaceutical distribution, scale economies, loyalty networks, regulatory licences, data
assets and logistics competences frequently combine into hard-to-replicate capability systems rather
than single assets.
Financial Capital: Balance Sheet Strength as an Enabler (Valuable; Organised)
Financial resources enable investment in store expansion, technology and working capital for
distribution. In FY2023, Clicks reported group turnover of R41.6 billion, cash generated by
operations of R5.9 billion, and returned R2.3 billion to shareholders, alongside record capital
investment of R930 million—signals of strong internal funding capacity for growth. These financial
resources are valuable (fund strategic options) and the group appears organised to deploy them
(disciplined returns and capital allocation). However, financial capital is generally imitable; hence it
is a necessary but not sufficient source of sustained advantage.
