Question

Complete a VRIO or Value Chain analysis, a PESTLE analysis, and a Five Forces model for an organization. Prepare a 3-6-page executive report that analyzes the internal and external environments of the organization and recommends a course of action based on the analysis.

Answer 1

VRIO Analysis is an analytical technique brilliant for the evaluation of company’s resources & thus the competitive advantage. VRIO is an acronym from the initials of names of evaluation dimensions: Value, Rareness, Limitability, & Organization.

VRIO Analysis was developed by Jay B. Barney as a way of evaluating the resources of an organization which are as follows:

• Financial resources
• Human resources
• Material resources
• Non-material resources

VRIO analysis is a complement to a PESTEL analysis. VRIO is used to assess the situation inside organization its resources, their competitive implication & possible potential for improvement in given area / for a given resource. Such an assessment is then used for example in strategic management of development in various areas / for decision making about advantage of an external / internal process & the securing service

It is a method of assessing your business' environment, & its possible impact on performance of your company. PESTLE is an acronym which stands for six external factors affecting your business: political, economic, sociological, technological, legal & environmental.

PESTLE is an acronym which stands for six external factors affecting your business

• duration of impact - short term or long term
• type of change - positive, negative or unknown
• rate of impact - increasing, decreasing, unchanged or unknown
• importance - critical, important, unimportant or unknown

The Advantages of PESTLE analysis

• determine their long-term effect on performance and activities of your business
• review any strategies you have in place
• work out a new direction, product / plan for your business
• identify solutions to problems
• gain strategic advantage on competitors
• evaluate the risks associated with markets you're interested in