VRIO Analysis of King s Food Stores B

Posted by Zachary Edwards on Mar-22-2018

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

Rare

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

Imitable

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

Organisation

• The financial resources of King s Food Stores B are organised to capture value as identified by the VRIO Analysis of King s Food Stores B. 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 King s Food Stores B.
• The Patents of King s Food Stores B are not well organised as identified by the King s Food Stores B 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 King s Food Stores B starts selling patented products before the patents expire.
• The distribution network of King s Food Stores B is organised as identified by the VRIO Analysis of King s Food Stores B. King s Food Stores B 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 King s Food Stores B.

From the VRIO Analysis of King s Food Stores B, 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 King s Food Stores B is a competitive disadvantage. Research and Development is also a competitive disadvantage.