The Resource-based approach has been in the field of Management since the earlier researchers such as Penrose, Selznick and Coase, however it was Birger Wernerfelt in his 1984 article who supplemented the best explanation of its principles (Wernerfelt, 1984). The theory focuses on the importance of resources and their implications on a company’s performance. This methodology remained unchanged until Moser mentioned that the theory should focus on the idea that companies are groups of tangible and intangible resources, where some are given significance in the procedure of creating a competitive advantage and enables the competitors (Moser, 2007).
Continuing I am going to analyze the Rio Tinto Group based on the resource approach. Rio Tinto is
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Rio Tinto’s strength lies in their advance research and development strategy, reputable brand and that they are number one producer of bauxite and second largest producer of Iron ore. Their main weakness are that they lack of long term objectives, they do not maximizing their shot term cash flow and some environmental damage has been caused by Rio Tinto.
We all are aware how the VRIO framework in the resource-based analysis has surpass the long-established SWOT analysis. The VRIO framework gives us wider scope in the resource-based view and it stands for value, rarity, imitability and organization. Rio Tinto’s VRIO analysis is:
• Value – In some aspects Rio Tinto is able to neutralize an external threat. Those are: new technology, service and number one producer in bauxite.
• Rarity – Since they are mostly mining company they do not have rare products. Only they can provide that other companies do not have is new technology and service.
• Imitability – It is very hard to imitate their way of working with the countries. They have established the trust over a century of being on the market.
• Organization – The firm is very organized and ready to exploit the
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All of those approaches complement each other so we could see the full picture of Rio Tinto. Industry-based approach emphasis mostly on opportunities and threats of Rio Tinto. Their main competitors are BHP Billiton and Glencore Xtrata and main opportunity is the huge demand for the products. Resource-based approach is focusing on Rio Tinto’s strengths and weaknesses. Their major strength is that they are the leader in the new technology and have diversified their business, however their weakness is high long-term debt. From the institution based approach we can understand that Rio Tinto is working closely with formal institutions and that they have some issues with norms in informal
For the government to overcome deficiencies efficiently in the sectors of industry, the private sector must have an active involvement in capital investment and creation of services. Brazil’s potential in a global market is set back by inefficiencies in infrastructure that turn away private investment.
Larry Rohter was a journalist in Brazil for 14 years and from his experiences he offers in this book some unique insights into Brazilian history, politics, culture and more. In 10 topical chapters Rohter’s easy-to-read book provides a look at Brazilian history and the extraordinary changes the country has undergone -- and is still undergoing. Rother covers many significant issues, but several stand out more than others. Namely: the country’s history, culture, politics, and finally its economy/natural wealth.
For decades, the steel industry has been one of the toughest markets on a global scale with most steel corporations ending up in bankruptcy. Foreign and domestic competitors, management issues, environmental issues, political agenda’s and technology have had much to do with the demise and more so of the success of the steel industry. The issues that this case focus on Nucor Corporation was of:
Rio Tinto, whose headquarters are situated in Europe; London, United Kingdom a developed country. The corporation Rio Tinto brought on a stamped loss of biodiversity in the region, both because of the formation of the mining regions themselves and by the unsustainable misuse of the area. When MNCs guides their globalization endeavors to ranges of moderately poor countries with rich land and rich biodiversity, a low environmental standard will inevitably lead to habitat destruction and species endangerment. Rio Tinto has perceived the need to execute changes as a reaction of government regulation expanding. Their key initiatives are developing climate change scenarios and business implications for key regions, Engaging in research partnerships that are analyzing climate change impacts and Building climate risk awareness and expertise among business units and staff (Center for Climate and Energy Solutions 84). Rio Tinto has implemented risk analysis and management process which has been categorized into classes, one through four, four needing immediate attention. The risk analysis and management must consider the accompanying five sorts of monetary outcomes capital expenditure, schedule, operating cost, production volumes, and revenue. It likewise incorporates the outcomes of health impacts, environmental impacts, community
There are still many problems occurring in Rio right now, from the Zika virus, to polluted waters and also a broken economy. President Obama has asked Congress for $1.8 billion in emergency funding for this epidemic. The Fords are a great place to live. The cost of moving to the Olympics this late in the year would hurt Brazil?s economy tremendously. They?ve already invested millions of dollars into these games.
BHP Billiton is the most successful company throughout the world by using unchanged strategies in their business. They have a strategy to operate large, low cost, expandable, and upstream commodities by using raw materials, geography, different assets and market, which give them a superior marginal costs throughout economic and commodity cycles for several years. They put the security of their workers first and supporting them by providing various facilities (see appendix 1). Their diversification makes the easy cash flow system by reducing the exposure to any one commodity and give for more identifiable and great financial performances. To become more successful BHP have heaps of human resources or workforce which reflect their values and communities. They have aim to recruit and attract other people who make their organization successful and thrive on working in teams and going to their extra miles to give their best. Moreover, they are committed to meet the changing needs of their customers. They have world class portfolio of growth option that will make them able to plan for a short term and long term goals and continuing them to create value for their shareholders which BHP more powerful (BHP Billiton, 2014). By using these all measures BHP Billiton kept its solid position in the nine month period till the end of March 2014 with the record of production attained for four items and at 10 operations. In aggregate, processing expanded by 10% for throughout the period what's more is required to develop by 16% over the two years to the end of the 2015 fiscal year. For further development BHP having a plan to start new projects where they pursuing a higher rate of returns on incremental investment and increasing inter...
The company has a very good information systems support in being able to make strategic and routine decisions. They research and look into every available option prior to committing to purchasing or contracting with the companies in making sure that they are able to make the best quality product at the lowest costs.
Peter Munk, the founder of American Barrick had after experience and past failures come to the belief that high liquidity and low leverage were key tenets in a successful business. The increased flexibility obtained by following these guidelines should provide the company with opportunities that less hedged companies did not have. If gold prices were to fall then the company would not be affected by the distress costs that other competing companies would experience, giving the company an edge during times of low prices. During this time they would have additional cash reserves available to invest while other companies might be struggling to gain expensive debt financing. This is one of the major competitive advantages a gold company can have because the major costs in this industry is exploration and acquisition costs. Because of their strong financials and stability the company was also more likely to enter into more favorable contracts. The risk management program was meant to provide in...
While the the mine itself has generated a lot of tax revenue for Peru’s underfunded central government. The problems this mine generates are on an environmental level. The surrounding villages are left to deal with the environmental damages while the companies that own the mine, such as the world bank, are profiting. In the province of Cajamarca, where the mine is located, more than half of the people live under the national poverty line of approximately $100USD a month (Hallman & Olivera, 2015).
Pitts and Koufopoulos (2012) argue that resources and capability are highly important internal factors that should be taken into account by the organization in order to obtain the successful performance in the long run.
It is also perhaps not feasible to evaluate the attractiveness of an industry independent of the resources a firm brings to that industry. It is thus argued that this theory be coupled with the Resource-Based View (RBV) in order for the firm to develop a much more sound strategy. It provides a simple perspective for accessing and analysing the competitive strength and position of a corporation, business or organisation.
However you define the activities of management, and whatever the organisational processes are, an essential part of the process of management is that proper attention be given to the Human Resource function. The human element provides a major part in the overall success of the organisation. Therefore there must be an effective human resource function. In the past, most organisations viewed Human Resource Management (HRM) as an element function, that is an activity that is supportive of the task functions and does not normally have any accountability for the performance of a specific end task. Because of the emphasis on analysis and precision there is a tendency for strategists to concentrate on economic data and ignore the way in which human elements and values can influence the implementation of a strategy. 'Economic analysis of strategy fails to recognise the complex role which people play in the evolution of strategy - strategy is also a product of what people want an organisation to do or what they feel the organisation should be like.?(1).
Acedo F.J 2006, ‘The Resource Based Theory: Dissemination and main trends’, Strategic Management Journal, Vol. 27, pp. 621-636.
This strategy emphasizes the use of an organization’s resources and capabilities to achieve a core competence that cannot be imitated by competitors. Furthermore, the resource based school argues that if an organization distinctively improves its internal capability; that is being able to have effective inside machinery to deliver products and services to customers, the organization will enjoy a massive advantage in the market. This school also argues that in order to have a competitive advantage, an organization must have resource and capabilities that are sophisticated to those of competitors (QuickMBA, 2010).
...ials to make their products rather than using materials that carries hazardous materials. There widespread of products help expand the company all around the world, and inspire the world with great performance and design.