Firm Strengths and Weaknesses
The definition of a firm’s resources and capabilities, and the two assumptions of resource heterogeneity and resource immobility, are quite abstract and are pt directly amenable to the analysis of a firm’s strengths and weaknesses. It is possible to develop a framework, based on the definition and on these two assumptions, that is more applicable. This framework is the VRIO framework. it is structured in a series of four questions to be asked about the business activities in which a firm engages: value, rarity, imitability, and organization. The answers to these questions determine whether a particular firm resource or capability is a strength or a weakness.
When Marteverick first started his route to becoming a media producer, along with other businesses, he thought about what would help his company stand out more than others. Working with the VRIO framework, one can understand his possible ability to be the best.
Value. Do a firm’s resources and capabilities enable the firm to respond to environmental threats or opportunities? In order for a firms resources and capabilities o be strengths, the must enable a firm to exploit environmental opportunities or neutralize environmental threats. Marteverick’s company definitely has value, especially with how he runs it. He is very personable with his work ,which not a lot of media producers are now a days. He wants to make sure that his clients are treated the best possible but also make them feel comfortable while he is working with them. He also offers different packages that other firms may not offer. His wife does hair and makeup so whenever he has a new client, he offers them the possibility of having a package deal with both him and her as a team
Understanding the value of a firm’s resources and capabilities is an important first consideration in understanding the firm’s internal strengths and weaknesses. However, if a particular resource or capability is controlled by numerous competing firms, then that resource is unlikely to be a source of competitive advantage for any one of them.
Rarity. As long as the number of firms that possess a particular valuable resource or capability is less than the number of firms needed to generate perfect competition dynamics in an industry, that resource or capability can be considered rare and a potential source of competitive advantage. With Press Out Media Group, it is not a rare as other products, like Tesla. This media group can easily be seen as just like others. Sometimes a firm can not be “rare” when it comes to beating out the competition. One must use other aspects to appeal to their clients.
Imitation. Imitation occurs in one of two ways direct duplication or substitution. Imitating firms can attempt to duplicate directly the resources possessed by the firm with a competitive advantage. It is hard to say that Marteverick’s work won’t be imitated, but no one imitate his dream, or his passion, or even his style. He runs his company the way he wants and he produces his material in such a way that, if done a perfected the right way, then no one will ever be able to imitate it and he will be one of a kind out there.
And last but not least…
Organization. A firm’s potential for competitive advantage depends on the value, rarity, and imitability of its resources and capabilities. However, to realize this potential fully, a firm must be organized to exploit its resources and capabilities. These observations lead to the question of organization: Is a firm organized to exploit the full competitive potential of its resources and capabilities. With Marteverick working and going to school, he is still in the process of fully organizing his firm. The full complete project if his organization probably won’t come for a while as he learns his way through the business aspect of his company and seeing what works and what doesn’t and also learning from his competitors as well.
