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VRIO Analysis of Designing Channels of Distribution
Posted by Zachary Edwards on Mar-22-2018
The VRIO Analysis of Designing Channels of Distribution will look at each of its internal resources one by one to assess whether these provide sustained competitive advantage. The Designing Channels of Distribution 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 Designing Channels of Distribution VRIO Analysis shows that the financial resources of Designing Channels of Distribution are highly valuable as these help in investing into external opportunities that arise. These also help Designing Channels of Distribution in combating external threats.
- According to the VRIO Analysis of Designing Channels of Distribution, 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 Designing Channels of Distribution VRIO Analysis shows that Designing Channels of Distribution'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 Designing Channels of Distribution's products.
- According to the VRIO Analysis of Designing Channels of Distribution, its patents are a valuable resource as these allow the firm to sell its products without competitive interference. This results in greater revenue for Designing Channels of Distribution. These patents also provide Designing Channels of Distribution with licensing revenue when it licenses these patents out to other manufacturers.
- The Designing Channels of Distribution VRIO Analysis shows that Designing Channels of Distribution’s distribution network is a valuable resource. This helps it in reaching out to more and more customers. This ensures greater revenues for Designing Channels of Distribution. It also ensures that promotion activities translate into sales as the products are easily available.
- According to the VRIO Analysis of Designing Channels of Distribution, 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 Designing Channels of Distribution VRIO Analysis shows that the research and development at Designing Channels of Distribution 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 Designing Channels of Distribution. It is recommended that the research and development teams are improved, and costs are cut for these.
Rare
- The financial resources of Designing Channels of Distribution are found to be rare according to the VRIO Analysis of Designing Channels of Distribution. 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 Designing Channels of Distribution 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 Designing Channels of Distribution and inhibit competitive advantage. This means that the local food products result in competitive parity for Designing Channels of Distribution. As this resource is valuable, Designing Channels of Distribution can still make use of this resource.
- The employees of Designing Channels of Distribution are a rare resource as identified by the VRIO Analysis of Designing Channels of Distribution. 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 Designing Channels of Distribution are a rare resource as identified by the Designing Channels of Distribution VRIO Analysis. These patents are not easily available and are not possessed by competitors. This allows Designing Channels of Distribution to use them without interference from the competition.
- The distribution network of Designing Channels of Distribution is a rare resource as identified by the VRIO Analysis of Designing Channels of Distribution. This is because competitors would require a lot of investment and time to come up with a better distribution network than that of Designing Channels of Distribution. These are also possessed by very few firms in the industry.
Imitable
- The financial resources of Designing Channels of Distribution are costly to imitate as identified by the Designing Channels of Distribution 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 Designing Channels of Distribution. 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 Designing Channels of Distribution provide it with a temporary competitive advantage that competitors can too acquire in the long run.
- The employees of Designing Channels of Distribution are also not costly to imitate as identified by the Designing Channels of Distribution VRIO Analysis. This is because other firms can also train their employees to improve their skills. These companies can also hire employees from Designing Channels of Distribution by offering better compensation packages, work environment, benefits, growth opportunities etc. This makes the employees of Designing Channels of Distribution a resource that provides a temporary competitive advantage. Competition can acquire these in the future.
- The patents of Designing Channels of Distribution are very difficult to imitate as identified by the VRIO Analysis of Designing Channels of Distribution. 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 Designing Channels of Distribution is also very costly to imitate by competition as identified by the Designing Channels of Distribution VRIO Analysis. This has been developed over the years gradually by Designing Channels of Distribution. Competitors would have to invest a significant amount if they are to imitate a similar distribution system.
Organisation
- The financial resources of Designing Channels of Distribution are organised to capture value as identified by the VRIO Analysis of Designing Channels of Distribution. 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 Designing Channels of Distribution.
- The Patents of Designing Channels of Distribution are not well organised as identified by the Designing Channels of Distribution 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 Designing Channels of Distribution starts selling patented products before the patents expire.
- The distribution network of Designing Channels of Distribution is organised as identified by the VRIO Analysis of Designing Channels of Distribution. Designing Channels of Distribution 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 Designing Channels of Distribution.
From the VRIO Analysis of Designing Channels of Distribution, 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 Designing Channels of Distribution is a competitive disadvantage. Research and Development is also a competitive disadvantage.
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