The resource based view of the firm helps managers of organizations to assess whether their firms have built up strategic resources and capabilities that are valuable, rare and inimitable in order to attain and sustain longterm competitive advantage. The more a firm’s resources and capabilities meet the VRIO criteria, the better its ability to sustain longterm competitive advantage. Through analysing their resources and capabilities, organizations can position themselves to dominate industry segments that are well aligned with their strengths and weaknesses,
Using VRIO, this report examines the key tangible and intangible resources of Tesco as well as an assessment of its core capabilities. These are reviewed and assessed against the VRIO framework which assesses their value, rarity, inimitability and organization.
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TESCO VRIO/VRIN ANALYSIS Case Study
Key Learning Outcomes
- Understand how dynamic resources and capabilities can play a role in corporate success.
- Examine how the resources and capabilities of Tesco have contributed to the competitive advantage of the UK supermarket giant.
- Be able to apply strategy frameworks such as VRIO to real company cases.
1.0 INTRODUCTION
VRIO is a strategic tool used to diagnose and understand the significance of a company’s resources and capabilities. While assessing their strategic position in the market, companies can deploy the VRIO tool to help them better understand whether their resources and capabilities can help them sustain competitive advantage based on an assement of whether such resources/capabilities are Valuable, Rare, Inimitable and supported by the organization competitive advantage (Johnson et al 2017).
The more a firm’s resources and capabilities meet the VRIO criteria, the better its ability to sustain competitive advantage. Through analysing resources and capabilities, organizations are able to realize industry segments that are well aligned with their strengths and weaknesses (Grant 2016). In this section, the VRIO framework will be used to analyse Tesco’s resources and capabilities and determine whether the supermarket giant has enough unique resources and capabilities that are Valuable, Rare, Inimitable and Non-substitutable to provide profitable and sustained competitive advantage over major rivals.
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