MARKETING

MANAGEMENT
ASSIGNMENT

VRIO ANALYSIS

Name: Muhsin Hussain Kolamannil

Registration No: 190103018
BTech Civil Engineering
VRIO ANALYSIS

The VRIO framework, which is essentially an abbreviation for the four

subjects, focuses on four primary areas: value, rarity, imitability, and
organization. This framework acts as a strategic tool that aids in the
identification of the assets and competencies that will give businesses a
long-term competitive edge. Businesses usually have a wide range of
resources and competencies. Such resources could be derived from
sources like money, people, organizations, materials, or technology.
External analysis is a technique for evaluating the standard and value of
a company's resources and competencies.

The VRIO Framework's components

Businesses must accomplish the four components of the vrio model in

order to truly be able to transform these resources into a competitive
edge:
  Valuable

However, things must first be appreciated. When resources give a

company a long-term competitive advantage, are they valuable to that
company? Resources must be used in order to achieve objectives, seize
opportunities, or lower risks. Additionally, they must raise
performance. Even if no organization's assets are perceived as
advantageous, this doesn't change the fact that the VRIO analysis
example may be useful in determining the quantitative value of the
product.

 Rare

The components must be rare. If a source of information is difficult

for most businesses to obtain, it is considered uncommon. If there are
multiple players in a market, everyone who has access to a valued
commodity can use it in the same way. None of the players are allowed
to use that resource in order to gain a competitive advantage. The VRIO
framework example's rarity is referred to as competitiveness or
competitive fairness. If a company has access to a lot of expensive and
uncommon things, it may be possible for it to temporarily gain a
competitive advantage.

 Inimitable

Organizations are able to share information in ways that other

businesses cannot thanks to helpful information resources. However,
this does not ensure a persistent competitive advantage. As a first
mover, a corporation may profit from having such assets, but rivals
would likely strive to duplicate them. According to the VRIO study
under the criteria, resources that are expensive or difficult to duplicate
are valued significantly more.
  Organization

To be able to obtain, utilize, and manage its resources, any

company need a strong organizational structure. This need applies to all
businesses, even those that employ rare, expensive, or easily duplicable
materials. It is impossible to use an organizational asset to maintain
competitiveness when there is a lack of structure. A corporation has a
certain capability that might be leveraged to gain a sustainable
competitive advantage when all four resource qualities are present.

BENEFITS

Only a small percentage of businesses spend the time to examine their

core capabilities and discover what sets them apart. For the following
reasons, in our opinion, it's a useful exercise:
✓ It enables you to benefit from previously overlooked competitive
advantages.
✓ You can better manage corporate resources and assist set the path
for future initiatives with
its aid.
✓ It may provide insights that aid in identifying and assessing
prospective opportunities and
dangers to assist decide which ones are more significant.

LIMITATIONS

The VRIO framework has several limitations but is nevertheless helpful

for analyzing your competitive position and offering strategic insights:
✓ It is challenging (but not impossible) to have a sustainable
competitive edge over the long term; three to five years is more
reasonable. This is because the business environment is always
changing.
✓ For the simple reason that they haven't yet completely built their
resources or competencies to generate a persistent competitive edge,
new and small enterprises may find it more challenging to implement
the VRIO framework.
✓ You will need additional frameworks (such as the SWOT analysis) to
fill in the gaps as VRIO is only an internal analysis.

To create a clear picture of how your business could promote itself in

the sector, organizations, enterprises, or any specific department may
do a VRIO study. GitMind is a good tool for this. The best time to do a
VRIO research is at the start of your strategic plan. By adhering to the
VRIO strategy and improving your research over time, you can
guarantee your long-term competitive advantage.