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ACCA Strategic Professional · Strategic Business Leader · Concepts of strategy

Kestrel Retail has a distinctive store design and a strong brand, both valued by customers and unavailable to rivals. However, its brand relies on one founder's personal image, and a competitor has recently launched a close substitute concept that meets the same customer need without copying the design. Applying the VRIN criteria, which criterion is Kestrel's advantage most clearly failing to meet?

The advantage most clearly fails the non-substitutable criterion. Kestrel's design and brand remain valuable and rare, and they have not been copied, but a competitor now meets the same customer need with a different concept. A substitute erodes the advantage even without imitation.

  1. AValuable, because customers do not value the design
  2. BRare, because rivals have the same design
  3. CInimitable, because the competitor has copied the brand
  4. DNon-substitutable, because a different concept now meets the same needCorrect

Explanation

The design and brand are valuable (customers value them) and rare (unavailable to rivals). The competitor has not copied them but has launched a substitute meeting the same need, so the non-substitutable criterion fails. Saying imitation has occurred is wrong, because the competitor's concept does not copy the design.

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