The Two Elements of Resource-Based View
Question 1: Describe the concept of strategic resource (Recourse-based View) and define each of the VRISO components. Explain them using your own words (using no more than 1-2 sentences).
The resource-based view of the strategic resource of the organization Under Armour combines two elements. These two elements are the external and internal analysis of the phenomenon of the organization. The two elements are competitive environment and market. The challenge, rarity, and significance of the competitors that duplicate the capital of the organization should be estimated (Collins, 2021). Otherwise, the organization can reach competitive equivalence. The resource-based can be the perfect way for finding out that the competitors are more capable and profitable than the other business.
The resource of the organization Under Armour should pose the four characteristics for providing the organization with the capacity for long-term strategic benefits.
- Valuable: When the tools of the organization will be the source of the competitiveadvantage then the organizational tools will be valuable. When the resource of the organization will enable the tools for developing as well as executing the plan, which increases productivity and performance, then the resources will be valuable (Eyada, 2020). The organization can boost their performance if they take the benefits from the resources.
- Rare:When the potential competitors or the current competitors will have the access to the same valuable resource, this will not be the source of strategic benefits and then both the businesses will be able to use the resource in a similar way (Gnyawali, D. R., & Ryan Charleton, 2018). Any organization will not be benefited from the techniques focused on the resources. This should be rare for the resource of the organization for having a strategic If any element of the organization is not rare, various organizations will be able to execute and formulate the methods. As a result, the resources will be very significant, and the methods will not have the strategic benefits.
- Inimitability:Inimitability of the organization may restrict competitiveness; this will be necessary for the organization for value creation (Agyabeng-Mensah & Tang, 2021). When the resource will be of one type, the profits of the organization will stay for a longer time. Getting the resource, which the competitors can replicate easily will have short-term.
- Non-substitutable:This is the last element for the resource of the organization, which is not comparable useful resource than Two forms of sustainability are there in this element, where the first element may be difficult for the organization for imitating the exact resource, which will be helpful for building as well as executing a similar approach (Tunn et al., 2019). The second form is the wide variety of resources of the company, which can be used as strategic substitutes.
Under Armour can easily leverage its resources and create exciting new products ansd services for its customers. Leveraging the resources is important at it allows Under Armour to create a brand image of excellence and strength to capitalize itself and strategically leverage its resources.
Question 2: Apply the VRISO framework to Under Armour. What resource leads to UA’s competitive advantage or disadvantage over rivals in the industry? What is UA’s unique positioning that gives them a favorable position with wholesale partners? Support your claim with an appropriate example/ story, citation from an article, etc. using Table 1.
In your answer, cite appropriate sources related to the company’s internal operations. Does the resource you have selected lead to a competitive advantage? Also, describe how the strategic resource you identified can be leveraged to create other strategic resources.
Some of the basic resources that lead to the competitive advance or disadvantage of the Under Armour organization are financial resources, superior intellectual property, and a high- quality workforce. When the company UA will have sufficient revenue, the revenue will support the developments of the new services and products. The revenue streams will have significant benefits every year. While discussing superior intellectual property, this can be said that this will be helpful for the organization for out-producing the competition. The intellectual property will add to the asset value and will make obtaining financing easier. If the company UA develops a more cost-effective and more efficient way of producing better products than the competition, the organization will be able to capture a strong market position (Loukil et al., 2020). A high-quality workforce is the other resource, which is also very valuable for the organization. If the organization is looking to replace the key employees, then this will lead to spending valuable time in training the new workers. This will present a vital opportunity cost as the production will also slow down. This will also help them to hire the workers, which will help in working in the peak season. Having skilled and experienced workers will lead the team towards success and will also improve the productivity of the workers.
|
Component |
Give an example of how this strategic resource creEaMtesEvNaTlue for UA from the digital fitness point of view |
Value of strength of the component Scale 1 to 5 (low to high) |
|
Valuable |
The financial resource of the organization UA is highly valuable. This service will provide significant investment opportunities and will assist in dealing with the potential challenges. The products of the organization for the customers are extremely desirable. Licensing and patent of the revenues will offer the organization a competitive advantage over the other distributors. |
4 |
|
Rare |
The professional staff and financial experience of the organization Under Armor are very rare. The patents of the products and the revenue of the organization are also rare in the marketplace (Campos, 2021). The organization can create strong distribution channels because of its strong financial position or place in the market. |
5 |
|
Imperfectly imitable |
The policies and the financial planning of the Under Armor organization are unique and difficult to make a copy of it. The workers of UA, who are experienced and well trained can be imitated readily. Other organizations can follow this strategy while creating a diverse workforce. This element makes the significant expenditure necessary and the delivery network of the organization can be duplicated. |
2 |
|
Non-substitutable |
The financial planning, network, executive preparation, and acquisition are organized highly. The expense structure and the trademark should be considered. For improved growth and productivity, the organization UA should coordinate the research and development activities. |
3 |
Question 3: What is the role of each wholesale partner in UA’s portfolio? How does this align with UA’s brand positioning and brand strategy?
The organization UA has over 2000 current wholesale partners, who focus on the direct-to-customer business (Thomas, 2021). The organization reported over 50% of the growth in the e-commerce business and a 17% increase in the direct-to-customer business. The wholesale revenue of the business has been decreased by about 7%. The wholesale partner of UA purchases large quality of sports equipment from the business directly and becomes the middleman between the retailer and the manufacturer. This aligns with the brand strategy and brand positioning of the organization Under Armor, where the wholesale partners focus on providing the products to the customers and serving the best of the business. As the wholesale partners are much familiar with the market niche or market segment, this helps in making the meaning and unique experiences as well as attributes of the brand UA.
The following recommendations can be made for its wholesale business in North America to capitalize on the market –
- It is important to note that the North American Market is extremely competitive with brands like Nike, Puma, and Adidas. It is important for Under Armour to realize this and plan its wholesale business accordingly. The wholesale business in the sports apparel, sportswear and equipment is popular and provides extreme supply chain benefits to the Companies like flexibility, autonomy and so on. The consumers also prefer this concept as they can pay a few bucks less to get the same quality product and services, with 100% guarantee of authenticity as the purchases are often on the “factory to customer” model. Under Armour can create a North America specific supply chain model that operates under the factory to customer model only. This will allow the Company to penetrate the market and gain leverage on the basis of ifs popularity and demand.
- Also, the wholesale business is capital intensive. Hence, it is important for Under Armour to gain equilibrium in its wholesale business and its “direct-to-consumer” model as well. The most preferred method will be to establish a robust “direct-to-consumer” model and generate adequate revenue to invest into its wholesale business model, because in the long run, keeping external and internal environmental uncertainties in mind, both these aspects may prove extremely helpful for Under Armour.
- Under Armour can change its wholesale partner networks to better suit its business in North America. For example, Under Armour can work with major wholesale partners only to boost its supply chain and wholesale network and establish strategic partnerships to gain economies of scale. There can be contracts in place to allow partners to operate freely and collaborate healthily with Under Armour. This will allow the business to gain valuable credit and resource requirements during times of duress.
References
Agyabeng- Mensah, Y., & Tang, L. (2021). The relationship among green human capital, green logistics practices, green competitiveness, social performance and financial performance. Journal of Manufacturing Technology Management.
Campos, H. (2021). The quest for innovation: Addressing user needs and value creation. In The Innovation Revolution in Agriculture (pp. 1-31). Springer, Cham.
Collins, C. J. (2021). Expanding the resource based view model of strategic human resource management. The International Journal of Human Resource Management, 32(2), 331- 358.
Eyada, B. (2020). Brand activism, the relation and impact on consumer perception: a case study on nike advertising. International Journal of Marketing Studies, 12(4), 30-42.
Gnyawali, D. R., & Ryan Charleton, T. (2018). Nuances in the interplay of competition and cooperation: Towards a theory of coopetition. Journal of Management, 44(7), 2511- 2534.
Loukil, K. (2020). Intellectual property rights, human capital and types of entrepreneurship in emerging and developing countries. Theoretical & Applied Economics, 27(1).
Thomas, L. (2021). Under Armour pursues plans to break ties with some retailers in push for more profitable sales. Retrieved 7 March 2022, from https://www.cnbc.com/2021/02/10/under-armour-reiterates-plans-to-break-ties-with- some-retailers-shares-rally.html
Tunn, V. S. C., Bocken, N. M. P., van den Hende, E. A., & Schoormans, J. P. L. (2019). Business models for sustainable consumption in the circular economy: An expert study. Journal of cleaner production, 212, 324-333.
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