Oriflame Case

Paper is about oriflameAccording to Barney (1991) there are three kinds of resources: physical resources, human resources and organizational resources. Barney (1991) further issued a test to prove whether those resources can offer a sustained competitive advantage for the firm they need to be: valuable, rare, imperfectly imitable and non-substitutable.

Oriflame has numerous physical resources such as production plants, warehouses and distribution centers (Oriflame, 2005). These resources are definitely valuable and probably worth billions of SEK. However, they are probably not so rare since many firms have similar physical resources. The question is whether the production processes are imperfectly imitable but the factories and warehouses should not be. Also, they should not be non-substitutable since other firms also have these types of facilities. To summarize, it is not likely Oriflame’s physical resources could not give it a sustained competitive advantage on the international marketplace. Oriflame’s main human resource is its sales consultants at 1,7 million people around the world (Oriflame, 2005). The sales consultants are incredibly valuable for Oriflame, given that they are the firm’s primary source of revenue. The sales consultants are probably not rare, as they exist in plenty around the world, however they are a hot commodity for any direct sales company wanting to succeed in the marketplace and do not exist in excess. However, the question is whether they are actually imperfectly imitable as other firms could probably acquire these and other consultants as well if they only put in enough market effort. It all depends on how loyal the consultants are to Oriflame and how well Oriflame manages to hold on to them. Finally, it is doubtful whether the consultants are non- substitutable as other firms also have consultants. The question is Oriflame’s consultants in some way are better trained