Alibaba is a group whose mission is to make the business easy and accessible everywhere. The company believes in enabling the businesses in transforming the way it sells, operate and market for improving their efficiencies. Alibaba provides the technology, infrastucture and marketing and reach to the brands, merchants and other businesses. The company maintains the operations, supply chain, and distribution network for the customers in efficient way (Alibaba, 2020).
VRIO analysis is a strategic tool used by companies to assess the value of their competitive advantages, resources, and capabilities. The acronym VRIO stands for Value, Rarity, Imitability, and Organization. Below is a comprehensive VRIO analysis of Alibaba, one of the world’s largest e-commerce companies.
Value
The first component of the VRIO analysis deals with the valuable resources and capabilities of the company which can contribute in the competitive advantage. Alibaba is one of a leading company with strong financial performance and operations. Its products are of good quality and differentiated from China. The company has developed efficient supply chain and distribution network which helps it in gaining the competitive advantage over other competitors.
Alibaba employees over 22,000 people across the globe. Its employees are highly skilled and trained. The company provides them a proper and friendly working environment which motivates them to work for the company. The appetent for Alibaba are valuable as the rivals will be unable to adopt the technology of Alibaba (Eddu, 2020).
Rarity
Rarity is the second component of the VRIO analysis which deals with determine how rare the resources of the company are. There are not many companies who can sustain the high liquidity levels while running the operations effectively like Alibaba. Up till now, the financial asset of Alibaba are rare. The motivational factors and practices for keeping the skilled and trained employees are rare, as many firms are unable to retain their skilled employees.
However, the product range in which Alibaba deals is not rare. The products are accessible to other competitors also. This creates tough competition. Regardless of this, Alibaba focused on product quality and distribution networks to make the operations efficient and effective. This helps the company in achieving the success (Eddu, 2020).
Imitability
This component of the VRIO framework deals with how difficult the resources of the company are to imitate. The more difficult will it be, more beneficial it will be for the company. It takes a lot of efforts and time for the company to establish an effective supply chain networks like Alibaba did. Its supply chain has helped in serving to customers across the globe.
Moreover, Alibaba is successful in achieving innovative capabilities which are not imitable as competitors have to invest lot in terms of money and time. However, the product categories are not at all difficult to imitate as many other companies are dealing in same categories (Case team, 2020).
Organization
The last component is how well the company is organized and managed. Aliabab is one of the successful company and famous across the globe. It has maintained its organizational structure very well. It has created a good working culture for its employees who are motivated to work with the company.
The inventory management of the company and warehouses are managed properly in order to avoid any inconvenience to the employee or customers. Furthermore, the company is successful enough in maintaining its e-commerce very well and become the good example for others (Edward, 2018).
Conclusion
The VRIO analysis of Alibaba shows that Alibaba resources, capabilities and operations to gain the competitive advantage. Alibaba is successful enough in managing the infrastructure and supply chain efficiently. The company handles its operations and distribution network very well.
| V | R | I | O | ||
| Supply Chain | ✓ | ✓ | ✓ | ✓ | Competitive advantage |
| Bargaining power | ✓ | ✓ | ✓ | Competitive Parity | |
| Inventory management | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Brand Equity | ✓ | ✓ | ✓ | ✓ | Sustainable competitive advantage |
| Marketing | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Product quality | ✓ | ✓ | ✓ | Competitive parity | |
| Product range | ✓ | ✓ | ✓ | Competitive Parity | |
| Talented HR | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
References
- Alibaba, 2020. About us. [Online], Available at: https://www.alibabagroup.com/en/about/overview, [Accessed on: 18th March, 2020].
- Case team, 2020, Alibaba com case study solution. [Online], Available at: https://casesteam.com/harvard/alibaba-com/vrio-analysis.php, [Accessed on: 18th March, 2020].
- Eddu, 2020. Alibaba Strategic analysis. [Online], Available at: https://www.eddusaver.com/alibaba-strategic-analysis/, [Accessed on: 18th March, 2020].
- Edwards, Z. 2018. VRIO analysis of Alibaba. [Online], Available at: https://www.case48.com/vrio-analysis/13652-Alibaba, [Accessed on: 18th March, 2020].