Using the VRIN model
- Monday, 21 May 2018
Using the Vrin framework, we can assess these distinctive capabilities and see whether or not they are source of competitive advantage for winelivery.
The Vrin model starts by assessing the value of a company’s capabilities, and then follows with rarity, inimitability and non-substitutability. It works on an increasing base of sustainable competitive advantage; in other words, only if a firm’s capabilities meet the 4 criteria they are considered to be sources of a competitive advantage that is sustainable over time.
Among the capabilities above stated, winelivery can count on: a) its online platform and mobile app, b) its marketing strategy and low investment, c) its payment methods, d) its delivery in less than 30 minutes, e) its dedication of founders and f) its storage temperatu
Hence, winelivery has to put the accent particularly on its fast delivery and storage temperature, that is what customers consider as the major value added of the company. In addition, it can leverage on its low initial investment and successful marketing strategy that favoured their rapid expansion. The whole picture framed by a great dedication of the two founders.
After going through the external and internal analysis, it is possible to affirm that the B2C market is in its growing phase and it is quite attractive for winelivery thanks to the distinctive capabilities it owns.
In the second part, we are going to analyse the strategy defined and followed by winelivery in entering the Horeca market and the main features of the new business model developed in order to scale up its presence in the sector. With this analysis our aim is, firstly, to understand which elements motivated winelivery to take this decision: through an assessment of the Horeca sector we will discover the potentiality to exploit. Secondly, we will go across the main steps and actions they did before, and while entering the market, trying to make clear the main important instruments they set up. Third, we will discover which are the distinctive elements of their value proposition and how it is delivered to the market. In the end we will disclose the current results of their strategy and their future perspectives.
The Horeca market in Italy employs almost 1 million people and accounts for about 405,000 companies (bars and restaurants represent the most numerous category). The vast majority are micro and small businesses. The sector is very sensitive to economic cycles and political events. However, it is one of the sectors that has experienced the highest growth in Europe in the last 10 years. Around 330,000 companies are organized in the form of individual companies or partnerships and around 80,000 companies are organized as joint-stock companies, identifying one of the most fragmented sectors of our economy.
In the last years, the Italian market for catering services has proven to be in contrast with the complex economic situation. Indeed, if the crisis had a negative impact on food consumption (-18.7 billion euros in consumption between 2007 and 2015), this impact mostly affected domestic consumption, for 98% of the total decline (-18.3 billion euros). As far as Horeca is concerned, on the other hand, expenses for catering services in the same period decreased marginally (-344 million euros). This is a specific trend for Italy, as the opposite happened in most of the rest of Europe, where the fall in food consumption affected particularly the consumption outside the home sector.
Research shows that in 2016, 77% of Italians consumed, more or less habitually, food and drink in restaurants.
Nowadays, the stakeholders believe that in order to strengthen the Horeca sector, policy-makers and BIOs should support companies by providing them with funds for retraining and digitization. In addition, consumers expect Horeca managers to be able to create online offers that can generate added value for the traditional "Made in Italy".
Acknowledging the success of the formula and the potential of the niche market, Francesco and Andrea recently decided to step in the Horeca market. The idea is not only to provide alcoholic beverages to the houses of private consumers, but also to the restaurants, hotels, bars and cafes. In order to do that, winelivery established a partnership with Alfaro srl - AVMilano wine & spirits, a well furnished wine distributor in Milan having an updated blog for the best connoisseurs. More specifically, Alfaro srl is a company that directly addresses the Horeca market, proposing the products of the cellars that are part of its book of restaurants, wine bars, hotels to all the businesses that want to have wines for catering, events or daily work activities.
The efficiency in the delivery services proper to winelivery is combined with the most known wine brands of the Milanese distributor and the network of followers of its online portal. The final goal is to offer a high-quality service for all the operators of the Horeca sector.
Horeca clients can order the products everyday until midnight and delivery is guaranteed in maximum 1 hour. A strict selection is conducted on producers to make sure of the qualitative characteristics of the products.
Their launching motto is “everything changes but everything remains as before”, to indicate on the one hand the quality of wine (and not only), which has a historical importance in Italy and has been behind experts for years; on the other hand, the innovation in the formula and service, aware that to move forward, it is fundamental to be able to keep up with change and looking to the future. Nowadays the Horeca market stands for 20% of winelivery’s global revenue.