Question

Please use Barney's VRIO framework of analysis to evaluate a firm's competencies. Please choose a specific firm to analyze.

Answer 1

Answer:

Barney's VRIO framework of analysis to evaluate a firm's competencies is as below:

To achieve a sustainable competitive advantage, the resources must follow VRIO framework and must be valuable, rare, inimitable and organized.

VRIO Analysis of Coffee Market in China

• Value
  • The flavour of Chinese coffee beans is quite exquisite
  • The quality of coffee beans produced in China is quite good
• Rare
  • The supply chain of coffee bean production in Chinese market is quite efficient
• Inimitable
  • The solubility rate of Chinese coffee is quite good
• Organized to Exploit
  • Chinese market is budding market for coffee as initially the Chinese people were tea lovers. So this market in China cannot be considered so established and organized to exploit

Let’s see the VRIO analysis for a particular company: Xiaomi Electronic Company

• Valuable: The company, Xiaomi, has become quite a well-established and sort after brand in the smartphone industry. Most of its offerings in the smartphone segment, are quite valuable. The features supported by the mobile phones of Xiaomi are exquisite and preferred by the consumers, so much that they can be compared with the smartphones in the premium segment.
• Rarity: The features of Xiaomi smartphones and the operating system capability is at par with the premium smartphones. The affordable pricing strategy with such premium features, makes the smartphones offered by Xiaomi, a rarity.
• Resources of High Cost of Imitation: The company makes sure to release an upgradation patch for the OS, almost every week. This facilitates the technological competence of the company and helps in beating competition
• Organization: The company, Xiaomi has found the expertise of being able to develop premium feature smartphones, at an affordable rate for the middle and lower class individuals. In future, the company can think about launching its own production line. This will facilitate maintaining the competitive edge of the overall organization.