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Running head: VRIO Analysis

VRIO Analysis and Framework of Alibaba

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Author’s Note
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VRIO Analysis and Framework of Alibaba

The VRIO framework is one of the most fundamental strategic tools that is used to

undertake quite a number of analysis processes and in most cases, it has always helped

organizations to be able to uncover and even protect their respective resources and capabilities

that are able to provide them with one of the long term competitive advantage across different

market platform (Aghazadeh, 2015). It is a tool that can be best used by Alibaba to scale up to

greater levels across different markets in order to offer a competitive advantage.

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On the other hand VRIO normally appears to be one of the most advanced forms of an
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acronym that clearly represents a framework that is fully based on a four question system. It
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therefore includes; value, rarity, imitability together with organization. Interestingly, all these

four components are always being approached through the use of what is known as the style of a

decision tree (Knott, 2015).

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Value- This focuses on whether a businesslike Alibaba is capable of offering a set of

adequate resources to all the customers. If the organization is not at a competitive disadvantage

level, there is the need to reassess all the resources and capabilities in order to uncover issues that

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are related to value. Again, if the business is capable of doing so through the establishment of its

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value, and then it is advisable to move on the next level of analysis (Knott, 2015).

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Rarity- At this level, Alibaba can be able to determine whether it is capable of controlling

either scarce resources or even capabilities. This focuses on owning a particular thing that is hard
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to find at the same time is likely to be in demand. Moreover, if the organization has value but
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lack issues that are related to rarity this makes it to fall at a level of competitive parity where all

the resources will always be valuable but very common thus making competition to become
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more challenging across different market platforms (Knott, 2015). On the other hand, when value

and rarity have been identified, there is the need to move to the next level which is imitability.
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Imitability- This level normally provides questions as to whether it is expensive to

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duplicate all the resources and capabilities belonging to the organization. On the other hand, it
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tries to put much focus on whether it is difficult to come up with equivalent substitutes that are

capable of competing with all the offerings that are attached to the organization (Chatzoglou et

al., 2018). If the resources of an organization have both value and rarity but are easy to find, then

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the organization will be able to experience conditions of having a temporary advantage. Due to

this, there will be the need to apply considerable efforts in order to stay ahead of all the

competitors. At the same time, if the Alibaba is capable of offering something that is of value,

rare and is also difficult to imitate, it is now advisable to put much focus on the organization.

Organization- This is focused on whether Alibaba is capable of implementing advanced

forms of management systems, processes and even structures. Without an adequate

implementation of internal organization and support, it will be quite difficult to adequately

realize the importance of the value, rare together with costly in order to imitate various resources

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(Chatzoglou et al., 2018). In fact, the organization will be able to encounter issues related to

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unused competitive advantage and as a result of this; it will need to put much focus on how it can

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best reassess different methods of how to come up with the required organization. When the
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organization is capable of identifying all the four components of the VRIO framework, then it
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will be able to attain the ultimate goal attached to sustained competitive advantage.
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References

Aghazadeh, H. (2015). Strategic marketing management: Achieving superior business

performance through intelligent marketing strategy. Procedia-Social and Behavioral

Sciences, 207, 125-134.

Chatzoglou, P., Chatzoudes, D., Sarigiannidis, L., & Theriou, G. (2018). The role of firm-specific

factors in the strategy-performance relationship: Revisiting the resource-based view of

the firm and the VRIO framework. Management Research Review, 41(1), 46-73.

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Knott, P. J. (2015). Does VRIO help managers evaluate a firm’s resources?. Management

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Decision, 53(8), 1806-1822.

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