List of The Three Strategic Resources
One Cent Apparel possesses strategic resources that will provide quality products at affordable prices to all customer segments. These resources fall under three major categories, including the following:
- Land: One Cent Apparel owns land in a strategic location, a few kilometers from the city center. This vital resource houses the warehouse and factory and saves money by eliminating the need to pay rent or incur high transportation costs. The resource can also generate some income as owners can rent out extra space.
- Labor: The company’s owners and top employees possess essential trade secrets, knowledge, skills, and experiences that allow One Cent Apparel to reduce its operating costs significantly. The employees are a source of competitive advantage because they possess trade secrets and special apparel production with related knowledge, skills, and experiences.
- Capital: The company has access to enough financial resources, ranging from owner goodwill to family and friend contributions and commercial bank loans. The company owners are willing and able to inject money into the company to increase its efficiency and make it more profitable.
Tangible and Intangible Resources
Of the three resources listed above, some are tangible while others are intangible. The tangible resources are land and capital, while the trade secrets are intangible resources (Bartley, 2018). Land is a “tangible” resource because it is a physical asset that one can feel, see, and touch. It also possesses a residual value, and the company executives can use it as collateral to secure a development loan. Most importantly, the resource is at the center of the company’s daily operations. Similarly, capital, which includes money, has physical characteristics making it a tangible resource (Rothaermel, 2021). Trade secrets possessed by the company employees are intangible resources because they do not possess a physical form and are difficult to quantify.
How the Strategic Resources Meet the Criteria of Providing a Sustainable Competitive Advantage Based on VRIO
Land meets the criteria of providing a sustainable competitive advantage based on VRIO because of its location. It is a strategic place that is a short distance from a busy city, making it easy to transport finished goods to the market and raw materials to the factory. Thus, the location is valuable, rare, inimitable, and organized. Some of the company employees possess trade secrets that are valuable, rare, inimitable, and organized. These resources ensure the company’s smooth running daily and the attainment of set objectives. Capital offers a competitive advantage by only being valuable and organized.
Capabilities Available from the Selected Strategic Resources and How They Can Provide a Competitive Advantage
The location of the land is capable of saving the company money in rents and other operational costs such as transportation. Since rents in cities and their environs can be high, One Cent Apparel is lucky to have premises next to town, meaning there are no rent payments. Additionally, if the premise is not fully utilized, One Cent Apparel can rent out some space, earning additional income. Also, it is cheap transporting goods to and from the city, where the market is, due to the short distance. Trade secrets that the company’s top employees possess will enable One Cent Apparel to manufacture high-quality products at reduced prices and sell finished goods at competitive prices. Lastly, capital gives the company a competitive advantage because it facilitates smooth daily operations and enables investment decisions.
Company Market Mix Definition
The company will offer a high-quality product at affordable prices and convenient locations and create awareness through extensive promotion advertising and sales promotion. One Cent Apparel will focus on product quality and price to encourage sales because both Ps offer unique propositional combinations. Traditionally, high-quality products retail expensively; however, One Cent Apparel’s high-quality products will retail at affordable prices due to the application of trade secrets that allow the company to cut its operational costs by 70 percent of market averages.
References
Bartley, T. (2018). Rules without Rights: Land, labor, and private authority in the global economy. Oxford University Press.
Rothaermel, F. T. (2021). Strategic management (5th ed.). McGraw-Hill.