Internal Factors Important for Successful Strategy Implementation - Case Study Example

Applying the VRIO framework on Business Software Alliance

Abstract

In an age of technological advancement by each turn of the day, organizations that deal with technological devices such as computers and smartphones have always had to deal with fiery competition as well as remaining relevant. In order to do this, it is imperative for an organization to identify their VRIO resources which offers them a competitive advantage as well as making them remain relevant to their customers. Therefore, the purpose of this research paper is to review the resources of Business software Alliance, an organization formed by the Microsoft corporation to protect against infringement of copyright among the member companies in order to establish their VRIO resources. It is hoped that the recommendations of this paper will be important to the board of the Business Software Alliance as they strategize on their next business ventures in the industry.

Introduction

A resource refers to anything that is under a firm control with has the capability of giving the firm a competitive advantage over similar rivals and competitors within the same industry. Therefore, a resource can either be an asset, personnel or skill within the organization. The VRIO framework is an abbreviation of four framework questions that a management consultant can ask with regards to a firm’s capabilities and resources in order to ascertain the firm’s competitive edge. The four questions are the questions of value, rarity, imitability and organization. In relation to the question of value, the management consultant is trying to establish whether the firm, using the resources at their disposal, is able to exploit an opportunity or to neutralize a threat. Therefore, the question of value looks at how viable the resources of the firm are in achieving the goals and objectives of the firm. In determining the value of a resource, a consultant will ascertain the significance of the resource in increasing the customer base of the organization (Cummings & Angwin, 2015).

The question of rarity looks at how available the resource is to the competitors and how readily the resource can be accessed. A rare resource will be valuable in giving an organization a competitive advantage over its rivals. However, even common resources are also valuable to an organization since the organization can use them to create competitive parity with the competitors (Cummings & Angwin, 2015).

On the other hand, the question of imitability establishes how easy a particular resource of the firm can be imitated or copied by the competitors. The question tries to look at the cost implication a competitor can incur while trying to imitate a particular resource under the control of the firm. Imitation is twofold, that is, imitation by way of a direct duplication of the resource or imitation by substitution with a capable product or resource. A product that is difficult to imitate gives the organization a good competitive edge over their competitors. Barney gives three reasons why it may be hard to imitate a resource. These are historical conditions, that is, if the resource was occasioned by a specific historical event; causal ambiguity, where the competitors are unable to identify the specific resource that is giving the organization competitive edge and social complexities, where the resource is as a result of the organization’s culture and inside relations (Cummings & Angwin, 2015).

The question of organization is concerned with establishing how well a firm is organized in order to utilize the available resources at their disposal.

Applying the tool

Identifying resources that are valuable, rare and difficult to imitate within the organization

Resources are separated into two key categories of tangible and intangible resources. Tangible resources have a physical nature and can be seen and felt. They include structures and buildings, land and equipment. Tangible resources are readily available and can be bought easily by an organization. Therefore, tangible resources do not offer a significant competitive edge to an organization. Intangible resources refer to resources that an organization controls even though they cannot be physically seen. They include patents and trademarks, brand and business reputation, a unique skill or a unique way of doing business. Intangible resources do not come cheap and their acquisition is not cheap either (Cummings & Angwin, 2015).

Therefore, they are very valuable in offering an organization a long term competitive edge over its competitors. In ascertaining the competitive advantage of an organization, one must look at the disposal of the organization’s intangible resources. In finding out an organization’s valuable resources, a person ought to look at the resources that are capable of decreasing the cost of production without lowering known customer expectations. Resources that increase or are capable of increasing production differentiation and the expectations of customers are also valuable resources to an organization (Knott, 2015).

Additionally, in identifying valuable resources, one should include resources that have led to the organization being acknowledged and feted for being outstanding in a specific field. In relation to these pointers therefore, the Business Software alliance, which also known as the Software Alliance have a variety of valuable resources in their fold. The most valuable resources that the Software Alliance possesses are strong membership comprising most of the largest software companies in the United States, corporation with various governments and highly qualified legal personnel to protect the interests of its members. Various authoritative electronics review magazine such as PC magazine have been identified of highly reviewing the Software Alliance due to their professionalism and recognition by the market as being aggressive in protecting its members from infringement of their IP products and meeting the expectations of its members. The human personnel of the Software Alliance have also been noted of being among the most accomplished brains in the industry which has results in the company having a constant competitive edge against other organizations offering protection of copyright (Knott, 2015).

Additionally, the registration of the Alliance Software products for patents and trademarks has made them rare to the competitors since they cannot be legally duplicated or imitated without the express consent of the organization. the personnel of the organization have also been identified as comprising a rare resource since not many organizations have skilled in house lawyers to rival the software alliance. It is noted that very few organizations can comfortably match the pay package offered by The Software Alliance to their employees which thus makes it difficult for the competitors to lure Business Software Alliance employees to their organizations. Additionally, due to their exceptional recruitment policy of finding and recruiting the very best and talented personnel, there are no future threats with regards to the competitors having more legally competent personnel than the software alliance (Cummings & Angwin, 2015).

Establishing how well Penlo Manufacturers is organized to use resources

In establishing how efficient an organization is organized, a consultant should review the management process of the organization. Additionally, establishing how well an organization keeps their personnel motivated as well availability of awards for the outstanding employees is also important. One should also look at how well the organization’s culture is suited to the management of its valuable and rare resources as well as how institutional structures are placed in order to get the most out of the resource. It is also vital to look at any organizational controls that are in place in order to guard such resource from wastefulness. Therefore, employing the above guidelines with a view of establishing the organization of the software alliance, it was evident that the organization of Business software alliance has been centered on the identified resources which form the strength of the company (Hoskisson & Hoskisson, 2013).

The management process of Penlo Manufacturers was identified as comprising of five tier divisions starting with a chief executive officer who is the president of the company to divisional heads who run a specific legal division. However, these levels of organization were also seen as a clog especially in relation to making vital decisions that touch on the welfare of the personnel. For instance, due to the reporting procedure put in place where an employee is only authorized to speak to their immediate supervisor, the personnel down at the division level have been reported as being alienated from the decision making process of the organization even on matters that touch on their affairs. Therefore, such discomfort has the capability of lowering the productivity of the affected employees or even losing them to competitors (Cummings & Angwin, 2015).

Additionally, the habit of the organization of rewarding only individual people without recognizing the corporate contribution of maybe a division has led to some employees feeling demotivated and left out of the award system of the organization. The organizational controls of maintaining a strict sense of confidentiality which also makes up the culture of the organization has been lauded of ensuring that the trade secrets of their members do not leak to the competitors (Cummings & Angwin, 2015).

Recommendations

Having established that Business Software alliance possess vital resources that meet the VRIO test, it is recommended that the company should do everything legally and institutionally possible to protect these resources. The reason for protecting these resources is because they are the ones which have been identified as offering the organization a constant competitive edge over their competitors in the industry. In doing this, there is need to communicate the same to the top organizational structure of the organization and make them familiar with such resources and advise them on how these resources can be used to differentiate the products of their members in the market. Additionally, the management should come up with more ways of making such resources highly difficult to legally imitate in order to make sure that they remain rare for the foreseeable future (Peng & Peng, 2014).

Additionally, it is recommended that the management of the software alliance should keep on constantly reviewing their resources especially legislations and statutes to ascertain whether they are still valuable due to the dynamic changes that have been witnessed to occur in the legal arena as pertains protection of software. Additionally, since the competitors will not relent in their pursuit of realizing similar competitive edge, the organization should keep on coming with novel VRIO resources due to the constant replication of the existing resources by competitors (Peng & Peng, 2014)

Moreover, it is also recommended that the need to be a review and a systematic change in relation to the organization structure of the organization. The current five tier organizational structure in place has been noted of being unfriendly to some of the personnel who view it with suspicion and hostility. This has the potential of negatively affecting the attitude of the employees as well as lowering their productivity and rebelling against the organization. The organization should therefore think of reducing these levels of organization to at most three tier organization structures that is highly accessible to the division employees. The award structure should also be reviewed to include additional categories such as division awards in order to ensure many more employees are awarded and therefore boosting the motivation levels of all the employees (Hoskisson & Hoskisson, 2013).

Additionally, the organization needs to carry more public awareness campaigns to sensitize the public on the need to protect against infringement of software and to reveal the objectives of the organization to the public with a view of creating public confidence of the organization (Hoskisson & Hoskisson, 2013).

Conclusion

In conclusion, the Software Alliance is lauded for its ability to safeguard the rights and interests of its members in an industry that is full of infringement of software and piracy as a consequence of insurmountable competition in the technological industry. However, the organization should keep on coming with more ways of protecting its members in order to ensure that they remain relevant with their members.