VRIO Analysis of Stm Group Pc

Posted by Zachary Edwards on Mar-22-2018

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

Rare

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

Imitable

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

Organisation

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

From the VRIO Analysis of Stm Group Pc, 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 Stm Group Pc is a competitive disadvantage. Research and Development is also a competitive disadvantage.