M20467 Strategic Management Assignment Sample
Question 2
VRIO framework is an internal analysis tool that helps in identifying the different organizational resources which would help in getting competitive advantage. VRIO stands for the Valuable, Rare, immutable and Organization based on the resources used within any organization. This forms an internal filter system where the higher authorities of the organization can easily check out whether the resources are being used in proper manner or the strategy that has been taken for the development of the company is utilised in an accurate manner for getting a higher sustainable competitive edge (Miethlich and Oldenburg, 2019). This framework is often described as a four pronged analytical tool that helps in understanding the competitive advantage of organisation resources and its sustainable success measures.
Value in the VRIO framework stands for the specific needs, that the company used to serve for their customers. This is the main platform where the company explains how their services satisfy the needs of customers or the reason behind selecting their specific product or services over any other competitors (Ariyani and Daryanto, 2018). The higher management authorities would analyse any strategic decision or their services through this filter channel. There are two directions, such as yes and no. If the product or services clears the filter then it moves towards sustainable advantage whereas in case of unsuccessful attempt it results in negative competitive advantage for the company. For example, in the case of Apple, the most renowned smart technological companies in the current market environment have strong business process automation systems (Barley et al. 2020). Along with this, their high competitive employee compensation package, human resource capabilities, and product diversification are the most important valuable resources that have helped the company to achieve sustainable competitive advantage.
The second filter is the Rare under VRIO framework. This clearly indicates the availability of the resources. This mainly includes the process in which any organisation accumulates different resources for manufacturing their products or to provide high quality services. Different unique capabilities the organisation has in their resources which would help them to remain in the front line of competition (Buzatu et al. 2019). Understanding the rarity value of any resources is highly important because when it merges with the value of the resources it creates a promising step towards success. On the other hand, it can be described that rarity helps in adding a special feather in the value of the product which makes it more demanding in the market and thus gives a high competitive edge. Hence, it is highly important for understanding the rare features of the organisation which would help in brainstorming the new ideas and thus to move towards sustainable growth (Ariwibowo et al. 2021). For example, Apple’s employee compensation package is also a rare resource that makes their employees as important as their customers and thus gets a huge advantage from their side (Barley et al. 2020).
The third filter step denotes immutability of the resources under the VRIO framework. This immutability is quite similar with the concept of rarity of the resources. For example, inimitability of resources mainly implies how unique the resources are in terms of competition. For example, two companies have similar products or they used to provide the same kind of services in the market (Murcia et al. 2022). In those scenarios, immutability helps to understand the unique features that make the organisation separate from each other. This feature helps the customers to understand the value of the product and thus to make valuable choices. Immutability also defines the duplication characteristics of the product. If the product or the idea of any organisation can be easily imitable in the market or it has an existence within this competitive field then the value of the product decreases significantly and it hampers the competitive edge of the product (Ariwibowo et al. 2021). Therefore, after passing through the value and rare filtering stage, it is highly important for the organisation to understand the uniqueness of the product for getting a higher competitive edge. Apple has global popularity that cannot be altered because of their unique features incorporated in their products and services (Barley et al. 2020). Their artificial intelligence level has also made their services immutable and thus this strengthens their competitive position in the market.
The last step of VRIO framework is the organisation which is the main internal analysis that directs how the organisation allots their resources, how they are managed within the firm, how the organisation operates their process and how they used to get prepared for a successful run. It is quite impossible to achieve competitive advantage without proper organisation of the firm. Even if any organisation is able to gather high valued rare and unique resources, but fails to manage those in operational process, then it is all driven towards in vain (Buzatu et al. 2019). In order to understand the successful organisation, one must analyse the workflow within the company, that is whether the workflow patterns motivates the employees to work hard and also drive them towards the success pillar or not. Along with this, it also encompasses the proper management and leadership attributes within the organisation that help in handling all the resources efficiently within the work platform. Success in this final step assures the sustainable competitive edge of the organisation (Ariyani and Daryanto, 2018). Strong human resources capabilities, brand loyalty, rapid research and development sector, innovative capabilities are some of the most important organised resources of Apple that has helped the company to remain in the top but unique position in the market (Barley et al. 2020).
Major advantage of the VRIO framework is that it not only focuses on the strength, weakness, opportunity and threat (SWOT) factors of organisations like SWOT analysis, another important internal analytical tool. This framework strictly focuses on the internal metrics and resources that help in getting competitive advantage easily (Miethlich and Oldenburg, 2019). This framework also forces the organisation to think in different manners so that their product becomes unique and must have distinct features in the market which would force the customers to grab those easily. This framework also helps in getting tangible solutions by focusing on the resources that they possess in their system. However, the major disadvantage of this framework is that it solely focuses on internal resources and does not integrate the outer environmental factors which can affect the competitive edge of an organisation in future run.
Question 3
Different methods of corporate growth
There are different methods where completive growth is present, such as internal development, mergers – acquisitions and strategic alliances. Below, the methods are going to be elaborated in below with providing relevant examples.
Internal development
In order to develop and grow activities, the improvement of the internal development of one of the most important elements. In the case of making organisational issues resolution factors, the management of the organisations needs to find out the issues that are usually barriers to organisational development and growth activities. On the other hand, by recruiting skilful employees, the management of the organisation can increase organisational outcomes in the global competitive market. As per the statement of Gamayun (2018), in the case of organisational development and growth activities, the management of the company needs to follow the strategic management activities. Furthermore, the management of the enterprises by improving the internal conflict resolution factors, the organisational development activities have been enhanced in the global competitive market.
The management of organisations by allowing the innovation method within organisations, improved their organisational growth and development factors. Furthermore, by determining the issues that most of the employees are facing in the workplace, the management of the enterprises can find out a solution. In addition to this, by involving IoT based technological methods, the management of the companies can enhance the output results of the organisation. Furthermore, in the case of making internal development activities, the organisations need to apply the workplace diversity culture. The presence of the different cultural people within organisations used to take a valuable role to enthuse the organisational growth and development activities. Contextually, by managing all the organisational cultural aspects and issue solution steps, the management of the organisation can easily solve the issues that are related to the organisational growth factors.
Mergers – acquisitions
The managers of an organisation used to take a beneficial role to manage all the organisational development factors because it has been involved with the development activities. As per the statement of Bhagwan et al. (2018), in the case of making all the rules and disciplines in a systematic manner, the disciplines of the managers and their acquisition used to provide massive support. For example, the management of Marks and Spencer has followed the valuable suggestions from their managers. As a result of this, it has been seen that it has taken a beneficial role to enhance organisational development (Marksandspencer.com, 2022). On the other hand, by applying the suggestions from the managers, the employees have found out the ways through which the skill development activities have been increased. Apart from that, the manager of the company has also been provided with the facilities of training for the skill development activities of the managers. As a result of this, it has played a beneficial role to make growth and development opportunities for the internal development of the organisation. Moreover, the beneficial suggestion from the end managers, the companies are used to get a good results in resource management and planning activities.
In the case of making good and beneficial output from the organisation, the valuable suggestions from the end of managers used to take a beneficial role. As per the statement of Shah (2019), the managers are involved in mitigating risk factors to find out the areas of risk factors. After analysing the risk factors, by making collaboration with the team members, the managers can easily solve the internal and external risk factors. Furthermore, the valuable suggestion of the managers used to provide some ways through this, the management of the company can easily find out the ways of organisational development activities. Apart from that, by analysing the possibilities of skill development activities, the management of the companies can easily find out the ways of making marketing development activities in the global competitive market. The managers are used to providing valuable suggestions about the team manager’s activities for completing the organisation’s vision and mission. The appropriate suggestions during organisation growth and development can play a valuable role to boost the organisational financial outcomes. As a result of this, it opens the way to improve financial outcomes.
Strategic alliances
The strategic alliance is one of the most valuable elements that are highly responsible for organisational development and growth factors. As opined by Cacciolatti et al. (2020), for making organisational growth factors, the organisation needs to improve their targeting management issues. Moreover, by the improvement or the resource management activities, the organisations can easily enhance their internal conflict resolution issue solutions. Contactually, by making a good supply chain management system, the management of the organisations can easily enhance their organisational development activities which are very important in the internal growth factors of an organisation. For example, it has been seen that Sainsbury’s has highly focused on supply chain management systems to boost their organisational output (Sainsburys.co.uk, 2022). Moreover, the application of the Supt chain management systems has also provided massive support to make a good relationship with the business stakeholders. On the contrary Vendrell-Herrero et al. (2018) argued that strategic alliances used to provide massive support for making organisational growth procedures more improved. The management of Sainsbury’s by improving the business strategies increased the possibilities of organisational financial output and growth facilities. Furthermore, by installing the IoT based method within the organisation, the management of the companies has got a good financial output.
In an organisation, the improvement of the supply chain management system is one of the beneficial elements. In the case of marketing expansion in foreign countries and analysis of the marketing demands, the organisations are highly focused on the improvement of supply chain management activities. The application of the masthead can also play an important role to find out the ways of organisational growth. Apart from that, for making business expansion in the foreign countries and analysing the product tending, the application of the market analysis is one of the most beneficial elements. Apart from that, for analysing the demands and supply trading in the present days, the application of strategic alliances is one of the most important elements.
Reference list
Ariwibowo, P., Saputro, F.B. and Haryanto, H., 2021. Analysis of Strength & Weakness, Using the Concept of Resource-Based View with the VRIO Framework in Sharia Cooperatives. Jurnal Manajemen Strategi dan Aplikasi Bisnis, 4(1), pp.279-294.
Ariyani, W. and Daryanto, A., 2018. Operationalization of Internal Analysis Using the VRIO Framework: Development of Scale for Resource and Capabilities Organization (Case Study: XYZ Company Animal Feed Business Unit). Asian Business Research Journal, 3, pp.9-14.
Barley, B., Kitamura, A., Loar, T., Ramon-Samayoa, E., Yuzon, J. and Daim, T.U., 2020. An Investigation of the Motivations and Strategies Behind Apple’s Product Design. In Innovation Management in the Intelligent World (pp. 3-27). Springer, Cham.
Bhagwan, V., Grobbelaar, S.S. and Bam, W.G., 2018. A systematic review of the due diligence stage of mergers and acquisitions: Towards a conceptual framework. South african journal of industrial engineering, 29(3), pp.217-234.
Buzatu, A.I., Pleșea, D.A., Iulian, C. and Valentin, W.P., 2019. Managing organizations for sustainable business development: Interaction between VRIO framework and Mckinsey 7s framework. New trends in sustainable business and consumption, pp.243-251.
Cacciolatti, L., Rosli, A., Ruiz-Alba, J.L. and Chang, J., 2020. Strategic alliances and firm performance in startups with a social mission. Journal of Business Research, 106, pp.106-117.
Gamayuni, R.R., 2018. Factors affecting internal audit function effectivity (internal auditor competence and objectivity, management support and organisation culture) at local government. International Journal of Monetary Economics and Finance, 11(3), pp.179-191.
Marksandspencer.com, 2022. About M&S. Available at: https://www.marksandspencer.com/ [Accessed on 15th May 2022]
Miethlich, B. and Oldenburg, A.G., 2019. The Employment of Persons with Disabilities as a Strategic Asset: A Resource-Based-View using the Value-Rarity-Imitability-Organization (VRIO) Framework. Journal of Eastern Europe Research in Business and Economics, 1, pp.1-13.
Murcia, N.N., Ferreira, F.A. and Ferreira, J.J., 2022. Enhancing strategic management using a “quantified VRIO”: Adding value with the MCDA approach. Technological Forecasting and Social Change, 174, p.121251.
Sainsburys.co.uk, 2022. About Sainsbury’s. Available at: https://www.sainsburys.co.uk/ [Accessed on 15th May 2022]
Shah, B., 2019. Impact of Culture on Mergers and Acquisitions: A Literature Survey. Pacific Business Review International, 11(7), pp.135-138.
Vendrell-Herrero, F., Gomes, E., Bustinza, O.F. and Mellahi, K., 2018. Uncovering the role of cross-border strategic alliances and expertise decision centralization in enhancing product-service innovation in MMNEs. International Business Review, 27(4), pp.814-825.
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