VRIO Analysis of Tolaram Innovating in Africa

Posted by Zachary Edwards on Mar-22-2018

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

Rare

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

Imitable

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

Organisation

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

From the VRIO Analysis of Tolaram Innovating in Africa, 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 Tolaram Innovating in Africa is a competitive disadvantage. Research and Development is also a competitive disadvantage.