Strategic Management Assignment Sample
Question 2
Definition of VRIO Framework: VRIO refers to the acronym including a four-question framework that always focuses on rarity, value, organisation and imitability within different criteria under the business operation of small to medium and medium to large business organisations significantly. Every company has been built to provide different kinds of business or resource advantages to their target marketplace. On the other hand, regarding its business growth, the organisation needs to analyse their external and internal environmental structure in order to identify its competitive advantages for business growth in future in its existing marketplace. The four stages of the VRIO framework have their significant way to consider the sustainable competitive advantages for the company. On the other hand, if the company cannot occupy its value proposition, the company will face competitive disadvantages and for the failure in rarity, the company will face competitive neutrality as well. In the case of positive responses in every stage of VRIO including imitability, rarity, organisation and value, it refers to the sustainable competitive advantages of the business organisations towards their future business development and aspirations. Additionally, the failure in an organisation and the imitability of following the VRIO framework an organisation can face unused competitive advantages and temporary competitive advantages significantly.
Break-down of VRIO Framework: VRIO is an abbreviation that refers to a four-question framework based on rarity, value, organisation, and imitability across several criteria in the business operations of small – and – medium and intermediate to large businesses. Every firm is designed to give different types of commercial or economic advantages to its target market. In order to find competitive advantages for future company growth in its present marketplace, the organisation must evaluate its situational structure. When using this internal environmental analysis framework, each variable of the corresponding business organisations will be analysed through this model. The main purpose of this framework is to understand and identify the uncovered elements related to the specified business operation strategies of that organisation. The identification process of the VRIO framework will help in rethinking the design to the next steps of the variables. In explaining the concept of VRIO to identify competitive advantages of a business organisation, it will be appropriate to take help from the company Google in understanding the competitive advantage taking process through this VRIO framework significantly. It is observed that argument stems are used in VRIO analysis through which the sustainable competitive advantages are referred to the human capital management of Google significantly.
Value: Google always prefers using human capital management data for retaining or hiring productive and innovative employees. On the other hand, it helps Google consistently create the most popular and innovatively designed demanding services and products for the world significantly.
Rarity: Like Google, there are no organisations which are using data-based employee management in their workplace so extensively.
Imitable: Google has been using data-based human capital management in order to imitate both difficult and costly infrastructure for the organisation. So that in the near future, the company should develop software management and lower investment in training and development through HR staff which will be supported by their new technological strategies.
Organisation: It is observed that Google is organised from their capabilities that will capture value from its business operational strategies. On the other hand, the IT department of the organisation is focused on collecting and maintaining data through their team leaders and HR management. So that they can easily use the data findings at the time of promotion, business operation, improvement in performance management, hiring and recruitment of employees effectively.
The VRIO framework significantly allows Google in completing several approaches related to their business operation through human capital management. Similarly, the people operation team or Google set out the identification of the characteristics of a great manager which is used during the data findings collected from overall performance management, performance evaluation, interviews, and great manager nominations effectively. Google determines the qualified candidates as their great managers because they consider the internal team management as well as their foundation to sustainable competitive advantages.
Evaluation of the VRIO Framework as an identification to ensure competitive disadvantages and advantages of business organisations:
The four stages of the VRIO framework are important in considering the company’s long-term competitive advantages. If a firm is unable to occupy its value proposition, it would face competitive disadvantages, and failure in rarity will result in competitive neutrality. Positive answers in every level of VRIO, including imitability, rarity, organisation, and value, allude to the business organisations’ long-term competitive advantages in their future company development and objectives. Furthermore, failure in an organisation and imperfectly imitable implementation of the VRIO framework might result in considerable underused competitive advantages and transient competitive advantages.
Competitive disadvantages identification: Due to the critical nature of the competitive ecosystem of this framework, the unique edge and value of organisations may differ from their actual long term association and it results in competitive disadvantages to the organisation. Additionally, the strict looking framework inwards the capabilities and resource development in order to analyse and identify the exterior opportunities effectively. On the other hand, it is really accessible but the smaller companies have to struggle to identify the stage’s implementation through their business operation strategies significantly.
Competitive advantages identification: The VRIO framework allows organisations including Google to take several advantages from previously unrecognised competitive advantages of the company. Additionally, it helps in producing internal team development as well as other insights that would help in evaluating and identifying potential threats and opportunities in order to determine the advancements of the organisation. Competitive positioning identification becomes more constantly to understand though it changes frequently by using the framework along with its every stage. It provides several opportunities for conducting internal and virtual workshops both and it enables the company to prioritise and identify the competitive edge of the organisation specifically. Highlighting the identification of the important factors has become easier through using this model.
Question 3
Corporate growth is one of the most important aspects that is taken into the configuration for the purpose to get an evaluation. It can be said that there are three forms that focus on the prospect of corporate growth, those are: concentrating on a single business, seeking vertical integration, and fitting current businesses. It is important to focus on one segment that the organisation should evolve in gaining corporate growth.
The relative merits of different methods of corporate growth are as follows:
- Internal development
Internal development is the process that focuses on an organisation that initiated the use of its own resources for the growth purpose of the company. It is required as one of the intense methods for cooperating with corporate growth. The valuation of internal; development leads to betterment in bringing up employee satisfaction. It can be said that whenever an organisation focuses on the employees and they are provided with instances that their value is given by the company then they end up feeling motivated and satisfied. Internal growth works as a position where a reduction in employee turnover takes place. For example, Microsoft is one of the companies that focus on working on its internal development and initiatives focused on improving the employee satisfaction spectrum.
- Mergers and acquisitions
It can be said that mergers and acquisitions play an important role in the overall aspiration of getting with the prospects of its development. It can be said that the implication of mergers and acquisitions leads to help in the stimulation of growth, gaining the competitive advantage, increases in the market share, and influencing these supply chains. Besides the help of this, it initiates the focus on benefiting the company by reducing the entry barriers and accessing the capital’s prosperity. One of the examples includes, if KFC and McDonald‘s are subjected to Mergers and acquisitions then they are known to be horizontal as both the forms belong to the fast-food market and swell the similar goods.
- Strategic alliances
Strategic alliances are the process of agreeing between two or more companies in cooperating with the manufacturing, development, and selling of the products in the market. Strategic alliances focus on benefitting corporate through competitive positioning in the market by gaining entry to the new market. In addition, it helps supplement critical skills and sharing risks and costs for the major development projects initiated. For example, Spotify and Uber can be termed Strategic alliances. The reason behind it is that Uber’s partnership with Spotify would be able to initiate uber riders in streaming their Spotify playlists whenever a ride is taken. This would be helping the uber experience feel personalised and would be encouraging uber riders in subscribing to Spotify premium. Thus it is an example of Strategic alliances that have made both uber and Spotify gain customers and help develop corporations.
- Market penetrations
Market penetration is the process that is undue taken by a company working towards a higher market and share by tapping into the products that are already existing in the existing market. With the help of market penetration, one is able to measure the ways products and services are being used by the consumers as compared to the overall estimated market for the same product and service. One of the examples of market penetration is diet coke. Coca-cola uses the concept of market penetration as one of the mediums of corporate growth. This has been possible as the brand is itself known globally and its effective distribution channels have made the company famous in the new market. Hence, it can be analysed well that market penetration can bring new and modified growth in the corporates.
- Market expansion
Market expansion is the process that focuses on the validate medium in getting with the selling of current products in the new market. It can be said that with the help of market expansion all the possibilities of gaining new market levels would be achieved. In addition, with the implication of market exemption, it would be helping with potential in the new market. Besides, it helps in new talent pools to be achieved by diversifying the assets that are available on the market. One example of Market expansion is Nike. Nike has thought of expanding its business and entering a new market in Africa and the Middle East for increasing its shoe sales revenue. On the other hand, Nike has thought of increasing its sales in the US by selling athletic shoes to American consumers.
- Product expansion
Product expansion is very much important in the focus of profiling corporate growth. Product expansion is important as new upgraded products and styles are happening to compete in the market, and to get with the trend and stand out of the crowd, is essential. It is the process that focuses on the continuum of swelling within an existing market but the products are bought up with a twist. The primary reason is that corporate growth is emerging propaganda and to initiate it, there is a huge requirement of bridging new products as the older ones become outmoded. One of the examples includes Netflix which has initiated bringing up affordable non-commercial monthly fees for the users to use.
- Diversification
Diversification is a growth strategy that includes entering into a new market where the business is currently not operating. It can be termed as a strategic decision that is taken by corporates in getting into the market for better growth and development. The implication of such a strategy, it helps the firms in the expansion of the product and services in the market and industries that are currently not explored. An example of Diversification is companies like Hitachi, Toshiba, and Sanyo electronics. These are diversified as they abhor being able to get into new markets after initiating their business in their home countries.
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