VRIO Analysis of ALIBABA GOES PUBLIC A

Posted by Zachary Edwards on Mar-22-2018

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

Rare

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

Imitable

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

Organisation

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

From the VRIO Analysis of ALIBABA GOES PUBLIC A, 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 ALIBABA GOES PUBLIC A is a competitive disadvantage. Research and Development is also a competitive disadvantage.