INSTRUCTIONS: Please RESPOND to this answer from the Point of view as a student. Use credible sources and respond as if you are a manager of a marketing agency. Tell this student what your agency would think of each of these answers:
Internal Context of Strategy and the Firm’s Resources and Capabilities
Gaining competitive advantage against other firms is something that is not done easily or without strategy. Competitive advantage can come in different forms, whether tangible or intangible. The internal drivers of strategy and competitive advantage are the resources and capabilities of the organization. The book outlined an example with Intel and how they were able to create a competitive advantage through their abilities to enter and dominate a market. Intel’s competitive advantage was their internal resources and capabilities that their competitors did not have. Intel was very capable of making innovations in chip design and get new products to market faster than their competitors.
Like Intel, Gigasavvy’s competitive advantage is their internal resources and capabilities. As mentioned before, Gigasavvy is a marketing agency unlike any other. The company is a end-to-end marketing agency that includes website development, photography, and videography. Their internal resources provide the company the ability to pitch new ideas to new and existing clients very quickly and to act on them even faster. Some of their competitors outsource many initiatives to smaller agencies, which slow down the process significantly.
As Gigasavvy’s core foundation was being developed, it was imperative that in order to find our internal and external advantage and disadvantages, we developed a SWOT analysis. The SWOT analysis provided the level of insight from an internal perspective (Strengths & Weaknesses) and an understanding of the external industry (Opportunities & Threats). The biggest outlier was the fact that the industry was pretty scarce when you looked at third party agencies that did everything in-house. This is not only a competitive advantage, but one of our core mottos during the sales pitch process.
According to Carpenter and Sanders (2008), “The VRINE model helps managers systematically test the importance of particular resources and capabilities and the desirability of acquiring new resources and capabilities” (p. 66). My goal is to outline Gigasavvy’s capabilities with the VRINE model.
Value is a resource or capability if it enables a firm to take advantage of opportunities or to fend off threats in the environment (Carpenter & Sanders, 2008, p.73). Considering Gigasavvy is a service organization, they do not own any intellectual property. The value that Gigasavvy provides is the integrated group of exports to solve problems for organizations. Gigasavvy’s dynamic capabilities provide competitive advantage in the market for our clients everything is done in house and not outsourced.
Rarity: The technology that we utilize is not rare, but the experts behind the creation of the technology and the strategy is.
Inimitability: Well, this is tricky because the platforms and technology that is used can be substituted and/or used by other organizations. However, as mentioned, the advantage is our internal resources.
Nonsubstitutability: This information criterion is satisfied if a competitor cannot achieve the same benefit using different combinations of resources and capabilities. Our products do not fall under these categories because of the service component.
Exploitability: The mere possession of control over a resource or capability is necessary but not sufficient to gain a competitive advantage. For service companies, it’s difficult to exploit a specific product or technology as the industry is constantly changing. Our resource (people) are exploitable to an extent by which they are still with the organization.
Overall, the VRINE model will be an extremely useful tool for our SSM project. As we begin to identify competitive advantages, we will be able to comprehend our firm’s capabilities and performance period over period.
Carpenter, M., Sanders, W. (2008). Strategic Management: A Dynamic Perspective. Upper Saddle River, N.J: Prentice Hall.