VRIO Analysis of Centrais Electricas Brasileiras S A - Eletrobras

Posted by Zachary Edwards on Mar-22-2018

The VRIO Analysis of Centrais Electricas Brasileiras S A - Eletrobras will look at each of its internal resources one by one to assess whether these provide sustained competitive advantage. The Centrais Electricas Brasileiras S A - Eletrobras VRIO Analysis also mentions at each stage whether these resources could be improved to provide a greater competitive advantage. Lastly, the resources analysed are summarised as to whether they offer sustained competitive advantage, has an unused competitive advantage, temporary competitive advantage, competitive parity or competitive disadvantage.

Valuable

• The Centrais Electricas Brasileiras S A - Eletrobras VRIO Analysis shows that the financial resources of Centrais Electricas Brasileiras S A - Eletrobras are highly valuable as these help in investing into external opportunities that arise. These also help Centrais Electricas Brasileiras S A - Eletrobras in combating external threats.
• According to the VRIO Analysis of Centrais Electricas Brasileiras S A - Eletrobras, its local food products are a valuable resource as these are highly differentiated. This makes the perceived value for these by customers high. These are also valued more than the competition by customers due to the differentiation in these products.
• The Centrais Electricas Brasileiras S A - Eletrobras VRIO Analysis shows that Centrais Electricas Brasileiras S A - Eletrobras's employees are a valuable resource to the firm. A significant portion of the workforce is highly trained, and this leads to more productive output for the organisation. The employees are also loyal, and retention levels for the organisation are high. All of this translates into greater value for the end consumers of Centrais Electricas Brasileiras S A - Eletrobras's products.
• According to the VRIO Analysis of Centrais Electricas Brasileiras S A - Eletrobras, its patents are a valuable resource as these allow the firm to sell its products without competitive interference. This results in greater revenue for Centrais Electricas Brasileiras S A - Eletrobras. These patents also provide Centrais Electricas Brasileiras S A - Eletrobras with licensing revenue when it licenses these patents out to other manufacturers.
• The Centrais Electricas Brasileiras S A - Eletrobras VRIO Analysis shows that Centrais Electricas Brasileiras S A - Eletrobras’s distribution network is a valuable resource. This helps it in reaching out to more and more customers. This ensures greater revenues for Centrais Electricas Brasileiras S A - Eletrobras. It also ensures that promotion activities translate into sales as the products are easily available.
• According to the VRIO Analysis of Centrais Electricas Brasileiras S A - Eletrobras, its cost structure is not a valuable resource. This is because the methods of production lead to greater costs than that of competition, which affects the overall profits of the firm. Therefore, its cost structure is a competitive disadvantage that needs to be worked on.
• The Centrais Electricas Brasileiras S A - Eletrobras VRIO Analysis shows that the research and development at Centrais Electricas Brasileiras S A - Eletrobras is not a valuable resource. This is because research and development are costing more than the benefits it provides in the form of innovation. There have been very few innovative features and breakthrough products in the past few years. Therefore, research and development are a competitive disadvantage for Centrais Electricas Brasileiras S A - Eletrobras. It is recommended that the research and development teams are improved, and costs are cut for these.

Rare

• The financial resources of Centrais Electricas Brasileiras S A - Eletrobras are found to be rare according to the VRIO Analysis of Centrais Electricas Brasileiras S A - Eletrobras. Strong financial resources are only possessed by a few companies in the industry.
• The local food products are found to be not rare as identified by Centrais Electricas Brasileiras S A - Eletrobras VRIO Analysis. These are easily provided in the market by other competitors. This means that competitors can use these resources in the same way as Centrais Electricas Brasileiras S A - Eletrobras and inhibit competitive advantage. This means that the local food products result in competitive parity for Centrais Electricas Brasileiras S A - Eletrobras. As this resource is valuable, Centrais Electricas Brasileiras S A - Eletrobras can still make use of this resource.
• The employees of Centrais Electricas Brasileiras S A - Eletrobras are a rare resource as identified by the VRIO Analysis of Centrais Electricas Brasileiras S A - Eletrobras. These employees are highly trained and skilled, which is not the case with employees in other firms. The better compensation and work environment ensure that these employees do not leave for other firms.
• The patents of Centrais Electricas Brasileiras S A - Eletrobras are a rare resource as identified by the Centrais Electricas Brasileiras S A - Eletrobras VRIO Analysis. These patents are not easily available and are not possessed by competitors. This allows Centrais Electricas Brasileiras S A - Eletrobras to use them without interference from the competition.
• The distribution network of Centrais Electricas Brasileiras S A - Eletrobras is a rare resource as identified by the VRIO Analysis of Centrais Electricas Brasileiras S A - Eletrobras. This is because competitors would require a lot of investment and time to come up with a better distribution network than that of Centrais Electricas Brasileiras S A - Eletrobras. These are also possessed by very few firms in the industry.

Imitable

• The financial resources of Centrais Electricas Brasileiras S A - Eletrobras are costly to imitate as identified by the Centrais Electricas Brasileiras S A - Eletrobras VRIO Analysis. These resources have been acquired by the company through prolonged profits over the years. New entrants and competitors would require similar profits for a long period of time to accumulate these amounts of financial resources.
• The local food products are not that costly to imitate as identified by the VRIO Analysis of Centrais Electricas Brasileiras S A - Eletrobras. These can be acquired by competitors as well if they invest a significant amount in research and development. These also do not require years long experience. Therefore, the local food products by Centrais Electricas Brasileiras S A - Eletrobras provide it with a temporary competitive advantage that competitors can too acquire in the long run.
• The employees of Centrais Electricas Brasileiras S A - Eletrobras are also not costly to imitate as identified by the Centrais Electricas Brasileiras S A - Eletrobras VRIO Analysis. This is because other firms can also train their employees to improve their skills. These companies can also hire employees from Centrais Electricas Brasileiras S A - Eletrobras by offering better compensation packages, work environment, benefits, growth opportunities etc. This makes the employees of Centrais Electricas Brasileiras S A - Eletrobras a resource that provides a temporary competitive advantage. Competition can acquire these in the future.
• The patents of Centrais Electricas Brasileiras S A - Eletrobras are very difficult to imitate as identified by the VRIO Analysis of Centrais Electricas Brasileiras S A - Eletrobras. This is because it is not legally allowed to imitate a patented product. Similar resources to be developed and getting a patent for them is also a costly process.
• The distribution network of Centrais Electricas Brasileiras S A - Eletrobras is also very costly to imitate by competition as identified by the Centrais Electricas Brasileiras S A - Eletrobras VRIO Analysis. This has been developed over the years gradually by Centrais Electricas Brasileiras S A - Eletrobras. Competitors would have to invest a significant amount if they are to imitate a similar distribution system.

Organisation

• The financial resources of Centrais Electricas Brasileiras S A - Eletrobras are organised to capture value as identified by the VRIO Analysis of Centrais Electricas Brasileiras S A - Eletrobras. These resources are used strategically to invest in the right places; making use of opportunities and combatting threats. Therefore, these resources prove to be a source of sustained competitive advantage for Centrais Electricas Brasileiras S A - Eletrobras.
• The Patents of Centrais Electricas Brasileiras S A - Eletrobras are not well organised as identified by the Centrais Electricas Brasileiras S A - Eletrobras VRIO Analysis. This means that the organisation is not using these patents to their full potential. An unused competitive advantage exists that can be changed into a sustainable competitive advantage if Centrais Electricas Brasileiras S A - Eletrobras starts selling patented products before the patents expire.
• The distribution network of Centrais Electricas Brasileiras S A - Eletrobras is organised as identified by the VRIO Analysis of Centrais Electricas Brasileiras S A - Eletrobras. Centrais Electricas Brasileiras S A - Eletrobras uses this network to reach out to its customers by ensuring that products are available on all of its outlets. Therefore, these resources prove to be a source of sustained competitive advantage for Centrais Electricas Brasileiras S A - Eletrobras.

From the VRIO Analysis of Centrais Electricas Brasileiras S A - Eletrobras, it was identified that the financial resources and distribution network provide a sustained competitive advantage. The patents are a source of unused competitive advantage. There exists a temporary competitive advantage for employees. There exists a competitive parity for local food products. Lastly, the cost structure of Centrais Electricas Brasileiras S A - Eletrobras is a competitive disadvantage. Research and Development is also a competitive disadvantage.