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Vrio framework about IKEA...

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VRIO framework VRIO stands for value of the resource, rareness of the resource, inimitable, and organization. The framework is a strategy tool that helps the organizations identify the resources and capabilities to give them a sustained competitive advantage. It’s structured in a series of four questions to be asked about the business activities of a firm.

Valuable The first one in the vrio framework is valuable. IKEA differentiate itself from competitors because it is an innovation of business model and value chain, which allows the firm to produce democratic design. IKEAs sustainable strategy is built on successful innovation and localization of their products.

The IKEA brand represent trust and honest. Its unique and contains high brand integrity because they have been developed over a long time, and through continuous quality production and effort. They have a defined corporate social responsibility function and regularly engages in different CSR actions. Their engagement in CSR activities allows them to build a non-substitutable competency as engagement and strategies for CSR are integrated with the broader business goals and developed strategically. Another valuable resource for IKEA is their relationship with suppliers. Its particularly string and based on strictly followed standards and criteria, and that allows IKEA to further exploit opportunities in different countries globally.

IKEA is highly innovative in their services and products offerings, and their innovation also expands into other functional areas of the company, such as marketing. That allows IKEA to lower its operational costs because its making the process more effective for the company. It’s a valuable resource because it helps IKEA to navigate environmental threats effectively, and benefit from the opportunities presented in the environment.

Rarity In this industry, none of the other competitors of IKEA have manage to design such easy processes. It is very rare to find such a good combination of quality, price, and design in any other competitor’s store, as well as the whole shopping experience.

IKEA has a global presence, and they operate in multiple countries and regions. Their global presence has allowed IKEA to build an expanded consumer base and earn revenue through multiple regions. This has given the company higher financial strength, and higher cultural exposure and international recognition. Their global experience is a rare resource that allowes IKEA to enhance.

A rare competency for the company that allows it to steer away from potential threats, and benefit from opportunities is how much IKEA value their organizational culture. IKEA encourage an organizational culture of problem solving amongst its employees and management. They value the effort of their workers and empower them to grow as individuals which allows higher teamwork, creativity, and innovation in the company. The innovation leads to higher competitiveness, which again leads to competitive advantage and benefit for the company.

IKEA has a high exposure to global cultures and different societal norms and values. Being global, the company has shown high adaptability to different cultures through for example engaging in localization activities and marketing communication. This localization is important for the company to gain thrusting in different local markets, but the localization is often guided by a standardized global strategy to help different managerial functions perform ideally. The ability to adapt to different external environmental and regional cultures is a rare resource that has allowed IKEA higher penetration, improved accessibility, stronger brand recall, and greater visibility.

Inimitability Inimitable competencies help in adding value to the competitive advantage, and long-term sustainability for an organization.

IKEA has made use of marketing communications strategically to induce higher consumption. The strategic focus of the business is enveloped by the organizational culture, and the business vision under the strategic leadership – which in turn is inimitable. The marketing communications for the IKEA are an inimitable resource that have allowed the brand to maintain long term competitive advantage internationally.

They also have efficient production capacities that operate at economies of scale. IKEA has controlled operational costs that have been achieved through expansion, and a consistent demand. IKEA has also integrated technology to minimize the costs and improve the processes and operational internally. This cost saving function allows them to continuously maintain competitive pricing in comparison to their competitors.

IKEA provides a unique customer experience to their customers. They offer high brand engagement with the experience that is significant, and relevant for the target groups. IKEA engages with the customers at multiple touchpoints and offers an experience that leads to customers wanting to repeat purchases. IKEA has also expanded beyond the basic product offering and evolved into offering and engaging consumers that allows the brand to increase its equity.

Organization IKEA has been in the market for a long time, and therefore have a strong presence and brand recognition which has helped the company to be successful in many countries.

They make substantial investments in research and development. The research and development function at IKEA enables them to stay in alignment of market trends and consumer behavior. With knowledge of changing consumer tastes and preferences, IKEA company can make use of its research and development function to develop offerings that meet the changing tastes and demands.

One of the greatest strengths and resources by IKEA is their control over, and development of distribution channels. The company’s distribution system, and the supply chain comprises of several different distribution channels. The mix of distribution channels allows them to have access to, and infiltrate different markets, as well as increase the number of sales and consumption of its products.

IKEA invests substantially in its human resources. The human resource function of the brand is very important in building the competitive advantage for the company by providing it with

improved talent. It is responsible for all employee related activities, from recruiting to compensation management to succession planning and training. The human resource function is also important for maintaining the supportive organizational culture and develop further. IKEA enjoys a supportive and innovative organizational culture that allows growth and development of not only the business at large, but also of individual employees. The organizational culture is free sharing in information and supports teamwork and synergy. This is an important competency and resource for IKEA which allows them to grow internationally and support various diversifications as well....