VRIO Analysis of Oventus Medical Limited

Posted by Zachary Edwards on Mar-22-2018

The VRIO Analysis of Oventus Medical Limited will look at each of its internal resources one by one to assess whether these provide sustained competitive advantage. The Oventus Medical Limited 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 Oventus Medical Limited VRIO Analysis shows that the financial resources of Oventus Medical Limited are highly valuable as these help in investing into external opportunities that arise. These also help Oventus Medical Limited in combating external threats.
• According to the VRIO Analysis of Oventus Medical Limited, 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 Oventus Medical Limited VRIO Analysis shows that Oventus Medical Limited'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 Oventus Medical Limited's products.
• According to the VRIO Analysis of Oventus Medical Limited, its patents are a valuable resource as these allow the firm to sell its products without competitive interference. This results in greater revenue for Oventus Medical Limited. These patents also provide Oventus Medical Limited with licensing revenue when it licenses these patents out to other manufacturers.
• The Oventus Medical Limited VRIO Analysis shows that Oventus Medical Limited’s distribution network is a valuable resource. This helps it in reaching out to more and more customers. This ensures greater revenues for Oventus Medical Limited. It also ensures that promotion activities translate into sales as the products are easily available.
• According to the VRIO Analysis of Oventus Medical Limited, 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 Oventus Medical Limited VRIO Analysis shows that the research and development at Oventus Medical Limited 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 Oventus Medical Limited. It is recommended that the research and development teams are improved, and costs are cut for these.

Rare

• The financial resources of Oventus Medical Limited are found to be rare according to the VRIO Analysis of Oventus Medical Limited. 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 Oventus Medical Limited 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 Oventus Medical Limited and inhibit competitive advantage. This means that the local food products result in competitive parity for Oventus Medical Limited. As this resource is valuable, Oventus Medical Limited can still make use of this resource.
• The employees of Oventus Medical Limited are a rare resource as identified by the VRIO Analysis of Oventus Medical Limited. 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 Oventus Medical Limited are a rare resource as identified by the Oventus Medical Limited VRIO Analysis. These patents are not easily available and are not possessed by competitors. This allows Oventus Medical Limited to use them without interference from the competition.
• The distribution network of Oventus Medical Limited is a rare resource as identified by the VRIO Analysis of Oventus Medical Limited. This is because competitors would require a lot of investment and time to come up with a better distribution network than that of Oventus Medical Limited. These are also possessed by very few firms in the industry.

Imitable

• The financial resources of Oventus Medical Limited are costly to imitate as identified by the Oventus Medical Limited 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 Oventus Medical Limited. 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 Oventus Medical Limited provide it with a temporary competitive advantage that competitors can too acquire in the long run.
• The employees of Oventus Medical Limited are also not costly to imitate as identified by the Oventus Medical Limited VRIO Analysis. This is because other firms can also train their employees to improve their skills. These companies can also hire employees from Oventus Medical Limited by offering better compensation packages, work environment, benefits, growth opportunities etc. This makes the employees of Oventus Medical Limited a resource that provides a temporary competitive advantage. Competition can acquire these in the future.
• The patents of Oventus Medical Limited are very difficult to imitate as identified by the VRIO Analysis of Oventus Medical Limited. 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 Oventus Medical Limited is also very costly to imitate by competition as identified by the Oventus Medical Limited VRIO Analysis. This has been developed over the years gradually by Oventus Medical Limited. Competitors would have to invest a significant amount if they are to imitate a similar distribution system.

Organisation

• The financial resources of Oventus Medical Limited are organised to capture value as identified by the VRIO Analysis of Oventus Medical Limited. 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 Oventus Medical Limited.
• The Patents of Oventus Medical Limited are not well organised as identified by the Oventus Medical Limited 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 Oventus Medical Limited starts selling patented products before the patents expire.
• The distribution network of Oventus Medical Limited is organised as identified by the VRIO Analysis of Oventus Medical Limited. Oventus Medical Limited 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 Oventus Medical Limited.

From the VRIO Analysis of Oventus Medical Limited, 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 Oventus Medical Limited is a competitive disadvantage. Research and Development is also a competitive disadvantage.