#vrio

A firm’s organizational strengths and weaknesses can help to provide a sort of star chart for the c-suite. Using their current coordinates, can they successfully navigate themselves into new territories and financial gains? Can they successfully steer themselves from operational icebergs and competitive hyenas? What are the most important attributes that can help organize a course to success? 

VRIO is a framework that “builds most directly on the resource based view of the firm and on two critical assumptions: that firms have different resources and capabilities (the assumption of resource heterogeneity) and that these differences can persist over time (the assumption of resource immobility)” (Barney, pg.146). This framework utilizes four questions that can help determine the competitive potential of the organization. See the table below from Barney for the questions that make up the framework:

Based on these questions, let’s answer for Kroger:

1. Yes. As seen most recently with COVID-19, Kroger was able to swiftly react to (literal) environmental threats and create varied shopping opportunities for customers.

2. No. From a US perspective, grocery stores are not a rare commodity. This is from a macro perspective - if getting into particulars of cities or neighborhoods, that answer can change due to food deserts and remote areas.

3. Yes. If Kroger had not been able to implement click-list style shopping where consumers can order online and have their groceries available for pick-up or delivery, they would lose a significant market share.

4. Yes. All Kroger policy and procedures are designed to push products and to entice shoppers. However, a serious process improvement inquiry may find weak spots to be improved.

Based on these answers, Kroger has competitive parity in the larger grocery store market. VRIO can help to translate prophecies into profits. 

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