VRIO Analysis for Strategic Resource Utilization

This assignment requires conducting a Value, Rarity, Imitability, and Organization (VRIO) analysis for a selected organization. Students will identify the internal strategic factors that contribute to the firm's competitive advantage, focusing on the effective utilization of resources. By applying the VRIO framework, students will gain insights into the organization's strategic resource management and its impact on development and performance.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Efficient management of business strategy is the major part that organisation has to take
in effective consideration. It will provide the effective growth and rise in operational capacity of
organisation. Besides this, it helps in better rise in productivity and handling of operations in a
very effective way. It helps organisation to take in consideration effective measures that will
help it to meet customer's expectations (Barney, 2014). This report will lay an emphasis on
various strategies that are taken in consideration by Ford. It is a US based auto mobile
manufacturing company that is also operational in the UK. This report will lay an emphasis on
various operations that will help in effective management of the different operational functions.
This report will also lay focus on the different business operations and strategies that will be
followed by cited business organisation. Porter's 5 forces model and VRIO analysis of Ford will
be discussed in the report as well (Bettis And et.al., 2016).
MAIN BODY
Porter’s 5 forces model of Ford Corporation
The porter 5 force model of ford will include the following factors that will help in better
growth and development of the organisation. This will support firm to have a better risk
assessment and control over its business operations. This will aid to company to take in
consideration the betetr functioning that will help the organisation to handle the operations in a
better way (Ethiraj, Gambardella and Helfat, 2016). This will help the business organisation to
develop a good strategy that will help the firm to meet the customer's expectation to provide
them with a better satisfaction level. Other than this, it will help in effective rise in operational
efficiency of the business organisation leading to better productivity. It will also involve
assessment of business operations and help them in achieving targeted goals. Ford will look after
the adoption of a wide variety of operations that supports a wide range of business operations.
Porter’s 5 forces model of Ford will involve the following factors:
 High rivalry among the firms: The ford will face down the better handling of the high
competition from other auto mobile manufacturing firms that are operational in the
market. The stiff competition will lay a very deep impact on the trade operations of
company and thus, the business firm has to develop a better strategy as per needs and
demands of customers and competition organisation is facing on production or sales
level. Ford requires high quantity of investment for both entry and exit level and all the
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firms focuses on competing with each other, rather exiting from the market (Ginter,
2018). Thus, with the rise in the competitors and more companies entering into the auto
mobile manufacturing segment, Ford has to look after the effective and better strategies
that ill help in better rise in the operational capacity of company. Other than this, looking
at technical advancement and development of electrical cars for audience, Ford must also
see through adoption of better innovation and technological advancement approaches
that will help the cited firm to meet the changing needs and demands of customers.
 Bargaining power of customers: The customers play a major role in execution of
business operations of company. Thus, firm has to look after better handling of different
operations which will help in effective rise in operational capacity of organisation (Hill,
Jones and Schilling, 2014.). With fluctuating economic conditions on global level, needs
and demands of customers will change accordingly. Thus, the cited business entity has to
look after the effective handling of the business operations including sales, marketing
and delivering final product i.e. cars to have a better share of revenues. The change or
alteration in the demands of the customers can have a deep impact on profit margin of
company. Thus, Ford must have to look after the requirements of its customers to avoid
their turnover and opt for better management level as well as technical innovative
measures that will help firm to meet requirements in a very sustainable way (Lasserre,
2017).
 Bargaining power of Suppliers: Although the chances of Ford getting impacted by the
bargaining power of its suppliers are very low, company has to give it a thought in order
to sustain in market. The suppliers of raw material will play a crucial role in
organisation’s working process. Any sort of restriction or obligations that are
implemented by suppliers is needed to be taken in consideration by organisation. The
lack of integration with them will have a negative impact on functionality of
organisation. The cited business entity is dependent on its suppliers for certain
components that will be required for auto mobile manufacturing. Thus, Ford must either
lay emphasis on their requirements or should try to become more self-dependent and
sustainable by itself. The bargaining power of suppliers should be controlled as rise in it
may impact overall functionality and may increase production cost of cars. Thus, Ford
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has to look after to work upon its operational capabilities and supplier’s demands (Fynn
And et.al., 2016).
 Threat of Substitution: It is the major threat factor that is required to be taken in
effective thought process by Ford Corporation. As many other firms are entering into the
auto mobile manufacturing market, with the products incorporating high class and latest
technologies that has emerged and the major competition for the cited business
organisation. Many other companies are offering high quality products and services in
the cars that are getting much better with every passing day. Along with that, invention
of electronic and fuel efficient, environment friendly cars had lead a major segment for
Ford to explore and work upon, in order to sustain in market and maintain its loyal
customer base (Jukic, 2017).
 Threat of New Entrants: The organisation will look after the better handling of the
different operations in the business firm, that will help the firm to develop high quality
product or services. The Ford has to face a stiff competition from the firms that are
entering in the auto mobile manufacturing sector. The new entrant will look after the
better handling of the different operations that will lay significant impact on operational
functionality of the organisation. Apart from this, the new entrants will see through the
better handling of the operations that will increase the productivity of the organisation in
a better way. Although Ford is one of the well settled and recognised auto mobile brand
n world, yet there are chances that it can face the stiff competition from the new entrant
firms, coming with high quality and innovative product and services. Other than this, the
new entrant has to face a major drawback on the point of investments. Ford has the high
investment resources that will help the firm during the operational turmoil's that are been
faced by the organisation (Harrison And et.al. 2017).
Thus, from the above analysis, it can be said that the Porter's 5 force model that is been
taken in consideration by the organisation will help it to analyse its risk factors and market
challenges in a better way. The assessment process will help the firm to meet the operational
requirements of the organisation. Other than this, the 5 force analysis will help the firm to have a
better productivity by developing the high class products and services that will help the business
organisation to have a greater share of the ideas about making the alterations in its business
process. The cited business entity will see through the adoption of innovative measures that will
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help in the better growth and development of the various operation that will help in the effective
rise in the operational capacity of the organisation. The adoption of the latest technologies and
development of high class products like the electronic cars and the vehicles of engines with
better furl economy will help the firm to have a better customer base that will help Ford
corporation. Other than this, it will help in meeting the expectations of its stakeholders and
investors. This will also, help the firm to have a better handling of the business operations that
help in better growth and development of the business operations of company (Zuzul and Helfat,
2016.).
Other than this, Ford Corporation will take effective measure to make its business
operations more cost effective and thus, reducing the process of its products, i.e. cars. This will
help the firm to meet the operational requirements of the company and meet the bargaining issue
of its buyers. This will also help in better handling of the business-related issues liker low
satisfaction level, decrement in productivity and managing the business operations in a better
way. From the above analysis, it can be found that Ford Corporation has a big opportunity to
enter into the market segment of electronic cars. As this is one of the emerging segment in the
auto mobile industry, which will provide the organisation with high quality services and a good
number of loyal customer's and effective base in the market (Wheelen and et.al., 2017).
Besides this, the different strategic approaches are been used such as:
 Cost leadership: It will help in better handling of the wide range of operations that will
help in suitable rise in the production capacity of firm. It helps in gaining a cost
advantage in firm.
 Differentiation: It will help in the development of the unique product or services that
will help in the better gaining of market share by the business organisation. It will help
the firm to meet the needs and requirements of buyers.
 Cost focus: It includes the focusing on the cost in a targeted market that will include the
target audience and gaining the good market share.
 Differentiation focus: It will help the company to gain a cost and market advantage in
the targeted and the different segment of the operational market.
VRIO model analysis of Ford Corporation
The VRIO Analysis of Ford Corporation will help in better analysis of the high class
productivity that will help in better handling of the different operations of the company. It is an
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analytical technique, that will help the auto mobile business firm to have a better analysis of the
various resources that are available with the organisation, either in abundance or in rare, scare
quantity. This will help the firm to make better strategy and handle the business operations in a
better way. It stands for Value, rareness, imitability and organisation. It will help the business
firm to assess the information about its operational functions and have a better handling of the
different resources like financial resources, human resource etc. It will help the firm to device the
better strategy and have a better productivity and revenue generation. This will help the firm to
have a better productivity and meet the operational requirements of the organisation. The VRIO
analysis of Ford corporation will have to be implemented effectively and with efficiency by the
organisation that will help in handling the operations of the organisation that will help in better
meeting of the operational capacity of the business entity (Steinbach and et.al., 2017 ). It will
help the company to have an effective analysis of the internal operations or micro environment
of the organisation. This will help Ford Corporation to have a better productivity and meet the
operational requirements of the organisation. The VRIO analysis of cited business entity is as
follows:
 Value: It will involve the better assessment of the different operations that will lay a very
deep and significant impact on the different operations of the company. It will involve the
better assessment of the different operations related to the purchasing of raw material as
well as the finished goods from the suppliers and selling it in the market. It can be
obtained through any means like purchase, rent, lease etc. the Ford will look after the
management of different operations that will help in better value generation. It will help
the firm to identify the resources that are useful and of no use to the business
organisation. It will help in getting the better cost efficiency and help the organisation to
meet the needs and demands of its customers as well as the stakeholders of the firm. As
Ford has a better supply chain management approach on the global level, it will help the
business organisation to mitigate the cost and manufacture the cars in a very effective
manner. This will help in better value generation and meet the requirements of its
customers to provide them with better satisfaction level. Other than this, it will help the
firm to have a better revenue generation (Rothaermel, 2015).
 Rareness: It will involve the analysis of the resources that are rare and are difficult to
found or obtain by the business organisation. Such resources are very costly and thus,
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require better planning and work process to get utilized effectively and in a better way. It
will help the business organisation to handle the various business operations and meeting
the needs and demands of the cited firm that will help the firm to get the better output. In
case of Ford Corporation, its effective collaboration with its suppliers and the better
supply chain management system helps the firm to gain a better productivity and
profitability in a better way. This will also help in effective rising of the operational
capacity of the organisation. It is been well known that Ford has one of the worlds best
supply management system that helps in the increasing in the efficiency of the
organisation. As the same resources is been required by its competitors, ford will look
after the better management of the different operations like safe stocking or bulk storage
in order to prevent any issue related to shortage or price fluctuation in the future. It will
improve its cost effectiveness and help the firm to gain better productivity, leading to a
competitive advantage over its rival firms.
 Imitability: It involves the strategies that will be imitated by the organisation that will
help in better handling of the various business operations that will help the Ford
Corporation to have a better competitive advantage over its rivals. The Ford will develop
and implement the proper business strategies that will help it to gain a better share of the
business operations. Other than this, the well known brand equity of Ford Corporation
that will help the firm to involve and adopt more innovative operations to connect with its
customers, have an effective insight about their needs and demands and will help in
developing high quality products and services (Moutinho and Vargas-Sanchez, 2018.). It
also helps in meeting the needs of the organisation in a better way by increasing the
operational capacity of the organisation. The lack of imitabilty of the business strategy of
the cited business entity will help the firm to gain a unique identification in market and
increase its production efficiency as compared to its competitors. Other than this, the
production or manufacturing process that is been followed by Ford Corporation will also
help the firm to have a better share of the wide variety of business operations and gain a
sustainable profitability.
 Organisation: Organisation will involve the organisational structure of the organisation
that will help the firm to handle the business operations in a better way. The effective
utilization of the available resources, utilizing them to their full cost effectiveness and
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establishing a system, which is unique and difficult to imitate that will help in better
handling of the different operations by the organisation. This will help the firm to
develop a better infra structure that will help in meeting the operational requirements of
the organisation. This will help the organisation to have a better productivity and help in
meeting the needs and demands of the customers in a better way. Ford corporation has
one of the best infrastructural network that helps the firm to obtain the high level of
productivity and meet the operational requirements of the organisation in a better way.
The organisational efficiency of ford help it to develop better products and services and
meet the expectations of its stakeholders as well as the customers in a better way. Apart
from this, it will support the adoption of better and innovative products and services that
will help the firm to have a better market share in comparison with its competitors
(Moutinho and Vargas-Sanchez, 2018).
Thus, it can be said from the VRIO analysis of the cited business organisation that the
better handling of the operations will help in meeting the operational requirements of the user in
a better way. This will help the firm to have a better value generation and handle the various sort
of business operation in an effective and significant manner. It will not only help the Ford
corporation to have a competitive advantage but also help the firm to meet the operational
requirements of its customers. The better handling of the business operation will help in handling
the business operations that will involve the better utilization of the available resources and give
out the better output to its customers. Other than this, it will help in organising the work of the
organisation and handle the different functions to raise the productivity and meeting the strategic
goals, set up by the business organisation. It will also help the firm to identify its competitive
advantages and opportunities to increase the cost effectiveness of the cited business entity. This
approach will make the organisation to develop the business functions that are unique and
expensive for the competitors and rivals to adopt or copy, making Ford Corporation as one of the
largest auto mobile firm in the world, improving its operational capacity and effectiveness in a
better way (Rothaermel, 2015).
CONCLUSION
Thus, it can be concluded that the effective management of the different business strategy
will help in better handling of the different operations that will help the firm to gain an effective
rise in its productivity. The Porter's 5 force model that is been utilized by the organisation will
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help the firm to analyse its macro environmental factor that will help the firm to meet the
operational requirements of the organisation in a better way. This will help the firm to improve
its efficiency and handle the business operations to increase the productivity. Apart from this, the
VRIO analysis will give the insight of the internal strategic factors that are been taken in
consideration by the organisation for the better development of the cited firm and meet the
effective utilization of the available resources.
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REFERENCES
Books and Journal
Barney, J.B., 2014. Gaining and sustaining competitive advantage. Pearson higher ed.
Bettis, R.A. And et.al., 2016. Creating repeatable cumulative knowledge in strategic
management. Strategic Management Journal. 37(2). pp.257-261.
Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2016. Replication in strategic
management. Strategic Management Journal. 37(11). pp.2191-2192.
Fynn, R.W., Augustine, D.J., Peel, M.J. and Garine‐Wichatitsky, M., 2016. Strategic
management of livestock to improve biodiversity conservation in African savannahs: A
conceptual basis for wildlife–livestock coexistence. Journal of Applied Ecology, 53(2),
pp.388-397.
Ginter, P.M., 2018. The strategic management of health care organizations. John Wiley & Sons.
Harrison, J.S., Banks, G.C., Pollack, J.M., O’Boyle, E.H. and Short, J., 2017. Publication bias in
strategic management research. Journal of Management, 43(2), pp.400-425.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated
approach. Cengage Learning.
Jukic, D., 2017. The Importance of Corporate Branding in School Management. STRATEGIC
MANAGEMENT, 22(4), pp.11-18.
Lasserre, P., 2017. Global strategic management. Palgrave.
Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Steinbach, A.L and et.al., 2017. Top management team incentive heterogeneity, strategic
investment behavior, and performance: A contingency theory of incentive
alignment. Strategic Management Journal. 38(8). pp.1701-1720.
Wheelen, T.L and et.al., 2017. Strategic management and business policy. Pearson.
Zuzul, T. and Helfat, C., 2016. Capability lifecycle. The Palgrave Encyclopedia of Strategic
Management, pp.1-5.
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