VRIO Analysis of Porto Adriatico

Posted by Zachary Edwards on Mar-22-2018

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

Rare

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

Imitable

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

Organisation

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

From the VRIO Analysis of Porto Adriatico, 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 Porto Adriatico is a competitive disadvantage. Research and Development is also a competitive disadvantage.