The Vrio analysis is built on four main traits which fundamentally supports the company’s ultimate goal of increasing competitive advantage. These four traits include valuable, rare, imperfectly imitable and organized to capture value (Jurevicius, 2013).
With these four, it is possible to determine and analyze how the company displays competitive advantage. When an individual is determining whether resources are valued or not, the firms typically show policies that protect the business from key coercions (Jurevicius, 2013). Customer gratification is similarly another method that resources can be demonstrated. This is key because, it increases client worth (Jurevicius, 2013). Worth can come from growing diversity in goods or reducing the fee (Jurevicius, 2013). If the essential necessities are not encountered then this can lead the corporation to a viable drawback.
So, the question, we then ask ourselves is whether or not Whirlpool’s resources are valuable or not? The copyrights/licensing and highbrow data has been an essential factor in the way the company has been ran throughout the years. The growth of the company is hugely substantial. Whirlpool is known for treating their employees well, and in turn the employees give their all to the company. Whirlpool’s products are extremely valuable. People are willing to pay a significant price, just to get their money’s worth.
Consumers tend to fall in love with the products, so this also makes the products valuable. Therefore, this leads to consumers placing Whirlpool above all other brands, which gives the company a competitive advantage. When determining whether the company is rare, they are measured based on the properties that aren’t used by any other company (Jurevicius, 2013).With valuable and rare sources, one can increase competitive advantage.
An additional way an organization’s property can be rare is if more than a small amount of companies uses equivalent supply and display the same quantity of consistency, then it can be considered a rare resource (Jurevicius, 2013). To be fair, in the appliance market it is hard to find a different kind of competitor than the ones that are already in place (Marketing Major Appliances, 2016).
Although, major appliances are huge in the market, finding a new competitor that is significantly different from the current main ones is rare. However, Whirlpool doesn’t really offer any rare products that only they provide (Marketing Major Appliances, 2016). Whirlpool as mentioned before does score high when it comes to how they treat their employees, which could be seen as rare given the history amongst major appliances (Marketing Major Appliances, 2016). Nevertheless, Whirlpool never really has launched a rare product for the market.
When trying to gain competitive advantage, it leads to problems. The properties of the company can be identified as costly to imitate when other current administration’s can demonstrate signs of imitation (Jurevicius, 2013). It is completed in one of binary habits. The first would be replicating the direct imitation, and the second would be replacing the indirect imitation (Jurevicius, 2013).
If a firm has valuable, rare, and costly to imitate resources, then they place themselves in a good place to have competitive advantage. Historical conditions, vagueness, and social complexity lead to the resources being costly (Jurevicius, 2013). The products provided by Whirlpool, are products that can be copied. This is normal, but it doesn’t give them that much of an advantage in the market due to the fact that they cannot make all their own products. Whirlpool does not have full rights on appliances, so not having control on the products you market and sell can prove detrimental. The company can ever really take the market and fly because they do not have rights on everything, which could be costly.
What is also costly, is getting involved with the major appliance market. Whirlpool has their name brand and products in place, so to try and copy the company and provide different products and services would be extremely difficult. This leads to Whirlpool having a competitive advantage at least for now. For a company to be competitive and show diverse advantages they must be organized (Jurevicius, 2013). Resources alone cannot provide this. Whirlpool must have its, policies, strategies, systems, and process organized, so that they can exploit the company’s latent talent to be valuable, rare, and costly to imitate (Jurevicius, 2013).
Whirlpool, generates the most revenue in their respective market. They are a global powerhouse, which is why it is difficult for to say they are not organized to capture value. From looking into the company, one can see that they are organized from bottom to top within the company. The whole chain of command is extremely impressive. Whirlpool is good at making sure the employee knows what it asked of them, as well as preparing them for the necessary tasks. This makes the employee, and management very orderly, and leads to results as well as a competitive advantage amongst its competitors.
