BMW stands for Bavarian Motor Works, is the German based multinational company. It operates in automobile industry and produces motorcycles and automobiles. BMW innovate the products and services by automating driving, on-demand mobility, electro-mobility, and the connectivity-mobility. BMW made the automobile experience advance which was not that exciting and promising before. Automobiles which are marketed under brand name of BMW are Rolls-Royce and Mini, and BMW Motorrad (BMW, 2020).
VRIO model is an analytical tool which is used for analyzing the internal capabilities and resources of the company for finding out the source of achieving sustained competitive advantage. There are four components of the model: Value, rarity, imitability and organization. Here is the detailed VRIO analysis of BMW.
Value
The first component of the VRIO analysis is identifying the valuable resources and capabilities of the company, which could help in gaining the competitive advantage. These valuable resources can help the company in availing more opportunities to strengthen the company’s position in the industry. It is necessary for the companies to evaluate the resources constantly to respond to the changing patterns of the market. BMW’s outstanding technological advancement and R&D is a valuable resource as it is continuously engage in growing the market for the company.
This brings more value to the company. Moreover, its goal of reducing the emission and increasing the performance of the vehicles is also valuable, as it focuses on the environmentally friendly products which is a good initiative (Google site, 2020).
Rarity
Resources and capabilities which are acquired by few companies are rare in the market. Valuable and rare resources grant the temporary competitive advantage to the company. If the resources and capabilities will be common and easily accessible, then every company will use it according to its own preference and benefits. The rare resource of BMW is its brand portfolio. It is rare for the manufacturer to have a diversified portfolio where it can charge premium across all its brands. BMW is one of a company who is doing it successfully. It becomes the threat for the rivals and challenging situation for them. Moreover, its innovation and creativity are also rare as the company stitch to its innovation and branding creatively (UK Essay, 2018).
Imitability
VRIO framework also put emphasis on making the resources and capabilities difficult to imitate. Either the resources should be costly so that no other competitors will try to copy it, or substitute should be difficult to find. This component along with valuable and rare resources helps the company in achieving competitive advantage. The efficient dynamics of BMW are difficult to imitate by the competitors. The BMW’s engineering largely derived from the history is unique and expensive to imitate. The company has successfully executed the resources and capabilities which makes it difficult for the rivals to replicate. Its distribution network is highly efficient which gives it edge over others (Kamal, 2017).
Organization
The last and fourth component of the analysis id organizing the resources and capabilities. It is beneficial for the company to organize the resources in order to capture the value. Companies will be able to achieve the sustained competitive advantage only if all the components of VRIO analysis will be achieved. BMW is one of a leading company in the automobile industry. The company is very well organized in its operations and organizational structure and culture. The company has highly talented and skilled staff which are motivated and work for the benefit of the company. This component along with all other components of the model help the company in achieving competitive advantage (Kamal, 2017).
Conclusion
BMW is the famous automobile company with its diverse and efficient product portfolio. The company is involved in providing the luxurious and promising drive experience to its customers. Because of its resource and capabilities, it has achieved the market share and growth in the industry.
| Resources/Capabilities | V | R | I | O | |
| Supply Chain and distribution network | ✓ | ✓ | ✓ | Temporary Competitive Advantage | |
| Talented Workforce | ✓ | ✓ | ✓ | Temporary Competitive Advantage | |
| Engineering excellence | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Product range | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
References
BMW, 2020. About the company. [Online], Available at: https://www.bmw.com/en/footer/about-bmw-com.html, [Accessed on: 26th March, 2020].
Google site, 2020. VRIO framework of BMW. [Online], Available at: https://sites.google.com/site/audibmwsarreport/vrio-analysis-2, [Accessed on: 26th March, 2020].
Kamal, S. 2017. In depth Corporate Strategy Analysis: Toyota vs BMW -65%. [Online], Available at: https://www.researchgate.net/publication/316147123_In_depth_Corporate_Strategy_Analysis_Toyota_vs_BMW_-65, [Accessed on: 26th March, 2020].
UK Essays, 2018. Analysis of automobile industry and BMW. [Online]. Available at: https://www.ukessays.com/essays/marketing/analysis-of-autombile-industry-and-bmw-marketing-essay.php?vref=1, [Accessed on: 26th March, 2020].