Barney (1991) defines VRIO analysis as a strategic management tool used to analyze a firm’s internal resources and capabilities, in efforts to determine if they can be used to derive a competitive advantage for the firm. It entails asking and endeavoring to answer questions that ask if a resource is: Valuable; Rare; costly to Imitate; and whether a firm is well Organized to capture the value of the resources? Any resource that meets all four requirements can bring sustained competitive advantage for the company. The pictorial representation of the VRIO analysis tool is as shown below.
Rarity of Resources
Those resources that are accessible to one or only a limited number of firms ...view middle of the document...
Application of the VRIO Toolkit
1. Dubai Shopping Mall
The outstanding resource available to Dubai is its renowned reputation as the world’s largest shopping mall based on total area (Saxena, 2011). The amenities available within the mall include the Dubai Aquarium and Underwater Zoo, Dubai Ice Rink, Sega Republic Indoor Theme Park and several luxury hotels, restaurants, cafes and shops. These have exhibited the characteristics of experiential retailing and ‘retailtailment’, a rather recent concept in the modern large scale retail shopping phenomena. Because of these aspects, it has received a number of awards, accolades and acclaims such as Best Retail Development Scheme (Large) Award and Best use of Lighting in a retail environment Award.
Applying the VRIO toolkit shows that, Dubai Mall’s reputation is a valuable, rare and costly to imitate resource. It is valuable because it is by virtue of this reputation that the Dubai Mall is the most visited shopping and leisure destination in the world. Its close vicinity to the world’s tallest building, Burj Khalifa, further contributes to its fame and reputation. Its reputation is a rare resource since only a few retail shopping malls can be comparative to it, such as the South China Mall, SM City North Edsa and SM Mall of Asia. It is very costly to imitate because of the vast resources required to develop such a property in area and scope, making it the most ambitious retail launch in the UAE to date.
2. Masdar City Abu Dhabi
Masdar City Abu Dhabi has been developed along the reputational concept of building the most sustainable emerging clean technology community on the planet (Masdarcity.ae). It has been modeled along the precincts of green urban development, making it the world’s most eco-friendly urban development (Zerkel, (2014). Its reputation as a hub for renewable energy and clean technologies positions it as a premier business location in the global arena. It promises a business environment where firms can thrive on its reputation as the world’s first eco city.
Applying VRIO toolkit shows that Masdar City’s vital resource is its reputation as the world’s first...