Compare Io Model and Rbv

There are a gazillion companies out there, but some stand out. Whether it is because of their popularity, affiliations, history, profile or service, one factor simply makes or breaks a company; it’s strategy management process.

The organisational environment of a company is defined by its stakeholders, including the owners, managers, employees, suppliers, competitors, government agencies and the media amongst others. Each group of stakeholders have varying degrees of influence in an organisation’s success. The relationships between the stakeholders in the organisational structure can be a source of competitive advantage for the company.

Barney (1991) lists four criteria which a firm resource must have to hold the potential of SCA: value, rareness, imperfect imitability, and substitutability (see Figure 1).

According to Mantere (2013) organizational strategy exhibits a division of linguistic labour, where responsibility for key concepts is assigned to particular individuals or organizational functions. Such linguistic experts oversee the proper use and maintenance of strategy language. The language-based view helps to understand linkages between institutional, network, organizational, and micro level views on strategy. It also problematizes widely held intuitions regarding the relationship between strategy and organizational outcomes. When both of them are executed well an organization will achieve best possible outcome. In business, the Structure follows strategy, which means that a corporate structure is created in order to implement a given corporate strategy. For example in the middle of operational and choice making levels numerous layers makes it difficult to see the week signs identifying with business sector opportunities and dangers which brings about wrong

Selecting a business strategy that details valuable resources and distinctive competencies, strategizing all resources and capabilities and ensuring they are all employed and exploited, and building and regenerating valuable resources and distinctive competencies is key. The analysis of resources, capabilities and core competencies describes the external environment which is subject to change quickly. Based off this information a firm has to be prepared and know its internal resources and capabilities and offer a more secure strategy. Furthermore, resources and capabilities are the primary source of profitability. Resources entail intangible, tangible, and human resources.

The different assumption made about the market place is another point of comparison between the MBV and RBV approaches. Under the market-based approach, the assumption of the ultimate arrival at conditions of market equilibrium prevails; with a balance of supply and demand and abnormal profits being computed away with new entrants. The most efficient firms will be those with low costs and minimal differentiation strategies. However, by contrast, the resource-based approach assumes a state of disequilibrium as the market norm. Given that firms will have differing core competencies, coupled with the fact that at different moments in time, the industry will make certain factors key to achieving profitability, the firms with the required key competencies as dictated by the industry, will the ones able to achieve above average profits.

Competitive Advantage: Creating and Sustaining Superior Performance, by Michael E. Porter. Author focused on three principle strategies that a firm can use to neutralize competition areas. low cost differentiation products, superior performance, and competitive technology. The profit potential of any organization can be truly determined by total 5 competition areas. 1 Jockeying for a position, 2 new competitors 3 substitute products/services threats 4 Raw materials power of suppliers 5. Organization customer bargaining power. Value chain is a tool that can be used to analyzing large number of value producing activities to determine customer segment need. Competitive advantage through low cost focus on ten major factors; economics, learning, capacity utilization, linkage within value chain, business interrelationships unit, vertical integration, Business cycles timing purchases, discretionary policies, location, and institutional factors. Two main area an organization achieve cost advantage is controlling cost drivers and two

There are various schools of strategy that have been vigorously debated on and after a consolidated effort; three schools of strategy were produced. They are the planning school, the positional school, and the resource based school of strategy (Ritson, 2013). All these strategies will be described with examples to buttress each.

Zappos, as the first and the world’s largest online shoes retailer, has developed a high quality experience and delivered “wow” to customers. It has established a strong relationship with customer and stick to bring the store to the customer’s home. It has used less twenty yeas to become a profitable company holding an outstanding reputation for customer service and its employee are passionately engage in their works. In this paper, I aimed to analyze the relationship between strategic capabilities and performance in Zappos’s success. The business environment is not constant rather than changeable, so how Zappos goes ahead of revival and forms its unique competency advantages. I will utilize VRIO test to detect the company’s level of competitive advantage. In addition, I will continually combine Barney’ theory of resource based view(RBV) with Zappos to identified which resources it processes and how Zappos used those to form its core competency.

An organisation’s strategy plays an important role of providing direction of where company wants to be and how best to allocate the company’s resources to meet its objectives. The formulation of business strategies has evolved over the years and has been made more difficult in recent by the uncertain operating environments and global financial crises.

Secondly, the only long-term sustainable source of uniqueness lies within the personality of the organization, in particular with knowledge. The author stresses the intangible resources, stating that “Determining whether one is winning or losing end product battles is more difficult because measures of product market share do not necessarily reflect various companies underlying competitiveness” (Prahalad and Hamel, 1990). Hall (1992) also agrees that the analysis of company’s intangible resources contributes to the strategic management

Strategy can be defined as being different from one’s competitors, finding the race to operate and accomplished it. According to Michael Porter (1996), while becoming better at what you do is desirable, it will not benefit you in the long run because it is something other competitors can also do. Strategies for organizations are originally developed by Michael E. Porter in 1979 by introducing the five forces model. A company can identify the industry profitability and attractiveness by analyzing the five forces of Porter (Johnson et al., 2008). And then a reasonable strategy can be set up in line with the strengths and the weakness of an organization is able to create a plan for a stronger position for the organization within its

The study of sustainable competitive advantage (SCA) within particular service industries was encouraged as far back as 1993. Bharadwaj et al. (1993, p. 83) proposed a conceptual model which attempted to integrate SCA issues from the fields of marketing, strategic management

‘Strategic Management’ is a very complex term as many eminent researchers and scholars have had different views and conclusions on strategy. According to White (2004), “Strategic Management involves both systematically developing an idea together with its implications and testing the empirical validity & usefulness of that idea against the real world.” Thus strategy is not only about planning for future but also about confirming the validity of the hypothesis considered and implementing it successfully. Strategy formation may take various forms such as implicit, explicit or emergent. Implicit strategy is a strategy formed by intuitions of an individual. As per implicit strategists, strategic management is about reading the environment

Individual resources may not yield to a competitive advantage. It is through the synergistic combination and integration of sets of resources that competitive advantages are formed. Organisations are expected to transform and organise resources into capabilities, which are selectively employed to build competitive advantage that protects their market share, their customer base, or their profit margins (Grant, 1999). Volkswagen has a system of ¡°On Demand Workplace Solution¡± designed to simplify and automate the process by which employees and suppliers capture, access, analyse and use information. This system enhances the Group¡¯s capability to consolidate technology and production skills into competences, so the company can adapt quickly to changing opportunities, such as price changes, competitive issues or supplier-related developments.