VRIO Analysis of Alpha Real Trust Limited

Posted by Zachary Edwards on Mar-22-2018

The VRIO Analysis of Alpha Real Trust Limited will look at each of its internal resources one by one to assess whether these provide sustained competitive advantage. The Alpha Real Trust 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 Alpha Real Trust Limited VRIO Analysis shows that the financial resources of Alpha Real Trust Limited are highly valuable as these help in investing into external opportunities that arise. These also help Alpha Real Trust Limited in combating external threats.
• According to the VRIO Analysis of Alpha Real Trust 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 Alpha Real Trust Limited VRIO Analysis shows that Alpha Real Trust 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 Alpha Real Trust Limited's products.
• According to the VRIO Analysis of Alpha Real Trust 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 Alpha Real Trust Limited. These patents also provide Alpha Real Trust Limited with licensing revenue when it licenses these patents out to other manufacturers.
• The Alpha Real Trust Limited VRIO Analysis shows that Alpha Real Trust Limited’s distribution network is a valuable resource. This helps it in reaching out to more and more customers. This ensures greater revenues for Alpha Real Trust Limited. It also ensures that promotion activities translate into sales as the products are easily available.
• According to the VRIO Analysis of Alpha Real Trust 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 Alpha Real Trust Limited VRIO Analysis shows that the research and development at Alpha Real Trust 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 Alpha Real Trust Limited. It is recommended that the research and development teams are improved, and costs are cut for these.

Rare

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

Imitable

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

Organisation

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

From the VRIO Analysis of Alpha Real Trust 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 Alpha Real Trust Limited is a competitive disadvantage. Research and Development is also a competitive disadvantage.