VRIO Analysis of Open Market Inc The E-Commerce Wars

Posted by Zachary Edwards on Mar-22-2018

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

Rare

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

Imitable

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

Organisation

• The financial resources of Open Market Inc The E-Commerce Wars are organised to capture value as identified by the VRIO Analysis of Open Market Inc The E-Commerce Wars. 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 Open Market Inc The E-Commerce Wars.
• The Patents of Open Market Inc The E-Commerce Wars are not well organised as identified by the Open Market Inc The E-Commerce Wars 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 Open Market Inc The E-Commerce Wars starts selling patented products before the patents expire.
• The distribution network of Open Market Inc The E-Commerce Wars is organised as identified by the VRIO Analysis of Open Market Inc The E-Commerce Wars. Open Market Inc The E-Commerce Wars 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 Open Market Inc The E-Commerce Wars.

From the VRIO Analysis of Open Market Inc The E-Commerce Wars, 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 Open Market Inc The E-Commerce Wars is a competitive disadvantage. Research and Development is also a competitive disadvantage.