Comparison between SWOT Analysis and VRIO Model

Table of Content

The SWOT analysis is used to depict the Strength. Weaknesses. Opportunities and Menaces that face a corporation. The principle of this analysis is to detect the peculiar competences that the corporation has every bit good as to place the chances that they are confronting. but unable to work due to the deficiency of the indispensable resources. Harmonizing to Hunger and Wheelen ( 2002 ) . directors use this analysis to do critical determinations of whether to put their resources to beef up their strengths or to do their failings more competitory by directing their resources to bettering their resources.

There are two chief advantages of SWOT analysis. One is that the analysis recognizes the consequence of external environment on a house. and secondly SWOT analysis is simpler compared to other theoretical accounts such as VRIO theoretical account. Among the disadvantages of SWOT analysis is that it does non stipulate the process that houses should follow in placing their specific strengths and failings. and besides their specific chances and menaces ( Wheelen & A ; Hunger. 2008 ) . Second. SWOT analysis is non accurate and precise. and normally it does non stress on the best precedences. and uses ill-defined words and phrases.

This essay could be plagiarized. Get your custom essay
“Dirty Pretty Things” Acts of Desperation: The State of Being Desperate
128 writers

ready to help you now

Get original paper

Without paying upfront

Another disadvantage is that some factors in this analysis can be placed in two classs at the same clip and it besides requires individual degree analysis since the analysis presents no duties. for the sentiments to be seconded by any statistics or analysis. Besides. it is said that this attack of analysis deficiencies rational nexus to scheme executing ( Pike. 2008 ) . The VRIO theoretical account is an appraisal of the resources that a company possesses. A resource can be defined as an “asset. competence. procedure. accomplishment. or knowledge controlled by the SWOT ANALYSIS AND VRIO MODEL corporation” ( Hunger & A ; Wheelen. 2002. p. 1 ) . This determines the value of a resource. its rarity. its inimitability and how the organisation can efficaciously work it. A valuable resource is must lend to clients satisfaction both in demands and monetary value that the client is willing to pay. This is determined by customers’ penchants. the available options and supply of related goods. This indicates that in portion. value is map of external environment such as merchandise market and demand forces ( Pike. 2008 ) . Dynamicss in consumer gustatory sensations. construction of industry. and engineering can ensue in alteration of value.

Second resources should be rare among rivals and hence resources should be analyzed in comparing to the competitory set of finish. Third resource should be dearly-won for rivals to copy and eventually the house must be good organized in a manner that it is able to take advantage of the market. The VRIO theoretical account determines which strengths should be included in the SWOT matrix ( Pike. 2008 ) . Harmonizing to Pike ( 2008 ) . resources can be a beginning of competitory advantage. competitory para and competitory disadvantage depending on whether it follows the VRIO standards.

Unlike SWOT analysis. which is carried out on the house as a whole. VRIO analysis is done on each single resource. A nucleus competence in a house is merely a resource that is VRIO ( Wheelen et al. . 2008 ) . The SWORT analysis is broader than the VRIO analysis. VRIO analysis is more precise and gives a clear image of the firms’ existent challenges. Among the similarities between the two types of analysis. is that they are both aimed at set uping the laxness of a house. in spread outing its market and hence assist the policy shapers in those houses to get at sensible decisions based on this analysis ( Pike. 2008 ) .

Recommendations that are arrived at during this analysis assist the house to better the bringing of services or goods that it offers. Both of them are besides carried out on the firm’s assets so that a SWOT ANALYSIS AND VRIO MODEL nexus between hapless public presentation and the firms’ resources can be established and disciplinary steps undertaken. To invariably cognize the firms’ place in any market construction. the house should transport out the assorted analyses among them the SWORT analysis and do a verification of the findings utilizing the VRIO analysis ( Pike. 2008 ) . This is of importance in guaranting the success of any company or concern.

Cite this page

Comparison between SWOT Analysis and VRIO Model. (2017, Sep 12). Retrieved from

Remember! This essay was written by a student

You can get a custom paper by one of our expert writers

Order custom paper Without paying upfront