The paper “ Bed Bath and Beyond’ s Most Important Resources and Capabilities, Competitive Advantage, and Weaknesses" is an affecting example of a case study on business. Bed Bath and Beyond, is a home merchandise retailer. This company along with its subsidiaries and stores sell products that are for multiple industries like hospitality, health-care, home-care, food, and etch. This company in 2012 has made two strategic acquisitions of companies by the name of Cost-plus and Linen Holding. BB & B is currently holding the position of a market leader in the industry. This position is attributed to factors such as strong liquidity, strong brand equity and diverse product portfolio and etch. Bed Bath and Beyond’ s Most Important Resources and Capabilities: Tangible Resources of the company: Financial Resources: The company Bed, Bath and Beyond have managed via its strong corporate planning to remain solvent at the time of recession.
Even at the time of recession, the company has managed to enter the “ 52-weeks high” list (Fox Business). This reflects the fact that the stock prices of the company are not superficial. The intrinsic strength of the company’ s stocks is due to its continuously increasing net income and profit margins, “ $9.5 billion, $8.759 billion, $7.829 billion for fiscal 2011, 2010, 2009.” (BBB Form 10-K).
Since the company possesses items that lead to cross-selling; this has been the fundamental reason behind its high sales volume. The company has a strong equity position, which is allowing it to avoid debt to fund its operations. This has been a major reason behind its strong financial position at the time recession (Datamonitor). Physical Resources: The company has a strong nexus of stores (Zacks). The strength of this nexus can be gauged from the fact that it comprises of 1139 stores in 50 states of the United States (Datamonitor).
Augmenting the number of stores is the favorable location of these stores. The company’ s operations are augmented by its subsidiaries like the Chrismas Tree Shop, BuyBuy Baby and Harmon. These subsidiaries have their own stores for distributing their product offerings. Chrismas Tree Shop has 71 stores; BuyBuy Baby has 64 stores and Harmon and has 45 stores. The company has also taken an initiative to enter an emerging market, which is Mexico via its two Home and More stores. Technological Resources: To be a part of an e-commerce marketplace, the company has a company that maintained a website that is facilitating e-commerce buying and selling.
The website is highly sophisticated in functionality, yet it is extremely user-friendly. This is the fundamental reason why consumers prefer to shop from the company’ s website. To augment its online point of sales, the company also has a vendor management system that connects the value chains of each supplier with the value chain of the company, allowing both parties to be sensitive to the rapidly changing consumer demand. Organizational Resources: Other than having a strong human capital and financial resources, the company has strong internal processes that allow it to respond quickly to changes in its environment.
The company has a diversified product portfolio that consists of product offerings for multiple industries like health care, cosmetics, household and etches. The product portfolio is so well constructed that it leads to cross-selling of the company’ s product offerings. Capabilities of the Organization: The firm excels in cross-selling as it possesses items that are suited for this type of selling.
The firm has an outstanding customer service, which is reflected by its merchandise return policy and the Pre-paid shipping initiative. The company’ s product portfolio consists of products from multiple industries; thereby the company is able to serve diverse customer segments. One of the unique selling propositions of the company is its customer-oriented policies and practices. The firm ensures an outstanding customer service by means of its merchandise return policy and Pre-paid shipping initiative. Moreover, the company also possesses a strong network of suppliers who are linked to the company via the company’ s vendor management system. Bed, Bath, and Beyond’ s Significant Weaknesses: Resource that the company is carrying on its balance sheet, but unfortunately, this resource is not valuable for the company in its current operating environment.
The name of this burdensome resource is “ company-owned stores” . The company is maintaining company-owned stores when the company can sell its merchandise by means of e-commerce. These stores are leading to a competitive disadvantage because some of the company’ s stores are being run at a loss; these stores are not yielding the returns expected of them. The resource that is valuable for the company, but it is not rare is the company’ s vendor management system.
This system is helping the company to gain efficiency in its operations. This system connects the value chain of vendors with the value chain of the company, which allows increased sensitivity to rapidly changing consumer demand. However, the installation of a similar system is not that difficult, thus this resource leads the company to gain a competitive parity with its competitors. The resource that is valuable and rare and at the same time is leading to a competitive advantage is the company’ s corporate planning division.
The people who make this division are the most valuable and rare resources that the company possesses. This resource allows the company to position itself in a way that enables it to counter the variables of the recessionary environment, and take strategic decisions which have a prominent positive impact on the company’ s financial performance. Although this division is a source of competitive advantage for the company, it can be imitated by the competitors by hiring a talented financial professional or even hiring finance professionals of Bed Bath & Beyond Sustainable Competitive Advantage: It is important for organizations to identify the resources which can serve as the basis for the sustainable competitive advantage (Sadler ).
Resource that can be characterized as valuable and rare, but unfortunately, competitors can easily imitate this resource (Barney and Hesterly); such a resource is classified as one that leads to a temporary competitive advantage (Hitt, Ireland, and Hoskisson). One such resource that competitors can imitate quite easily is the company’ s attitude towards its customers.
By designing or even adopting service polices which are customer focused in nature, the competitors can come on an equal footing with BB& B on this front. Thus, the company needs to watch its competitors move on this front (Balogun). Resources that are valuable, rare, and costly to imitate, are the kind of resources that leads to a sustainable competitive advantage (Barney). The resource that fits this description and is possessed by the company is the company’ s financial planning division. Decisions taken by this division have proved to be one of its key competitive advantages in recent years.
This division comprises of talented and knowledgeable individuals. In order for the company to avoid the brain drain phenomenon, it needs to pay competitive salaries to these individuals and create other motivational factors for these individuals. Only be doing this, will the company avoid losing this talent to its rivals. The company is having a sound structure to hold its market leadership position. The company has a strong competitive advantage in the form of its employees. The only thing which the company’ s management needs to do is to nurture this competitive advantage so that it can ensure long term profitability for its stockholders.