Find an organization of your choice and then discuss the fou

Find an organization of your choice and then discuss the four points within a VRIO chart. You are to explain each of these four sections by conducting in-depth research of the company of your choice and to apply quantitative numbers to back up your rationale.

Solution

VRIO is an internal analysis tool which strategically evaluates a company’s resources and competitiveness and tries to define the company’s resources and its capabilities to realize company’s strategic competitive advantage.

VRIO stands for V = Value, R = Rarity, I = Imitability and O = Organization.

For the VRIO analysis I will focus on Toyota motors

Resource or capability

Valuable

Rarity

Imitability or non -substitutable

Organized

Impact on competitive advantage

Reliability & Practicality

YES

YES

YES

YES

Realised sustainable competitive advantage

Features, technology & manufacturing

YES

NO

NO

YES

Realised temporary competitive advantage

Worldwide Presence / Brand value

YES

YES

NO

YES

Realised temporary competitive advantage

The value quotient has very important for Toyota and the question is Toyota’s resource and capabilities allows it to respond to external market threats, the answer is yes which attributes to the dynamic approach of the company when it comes to reliability and practicality its various vehicle segment such as hatchbacks, SUV’s, Van’s, sedans, etc.

Rarity is a pivotal part of Toyota’s stronghold in the industry, Toyota invented market leading concepts such as JIT – Just In Time inventory and the years of experience Toyota has in the industry are some of the clear competitive advantage that the company has when compared to other industry players.

Imitability, although many company can imitate the features and technology offered by Toyota to create a similar success story but rearranging every factor of the manufacturing process that Toyota has, will be result in massive cost of restructuring and time taking at the same time where a temporary advantage in defined but Toyota also has a reputation of constantly evaluating with accordance to the latest industry norms.

Organization, Yes Toyota has organized itself to exploit all the resources it has to compete in today’s day and age. Its reputation of reliability and brand value has garnered the ever increasing market share and its experience in the industry has helped in evolving the organization mind set to successfully implement its resources.

Toyota being a Japanese company has the second largest market share in the US and China two of the world’s biggest car markets with 15.3% and 8.2 % increase in China.

Toyota as of 2016 has sold 7,247,524 units worldwide and kept in number one spot in 2017.

Toyota was the world’s first company to produce 10 million units per year and in 2006 it gained the top spot in US competing against indigenous companies such General Motors and Ford.