– MNG3701 ASSIGNMENT 02 –
by
Name Student number Contact details
Kefiloe Moatshe 42360854 0729476430
Unique no :714041
Date of submission:
2020-10-03
Submission date: 02/10/2020
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PLAGIARISM DECLARATION
Complete and sign the following declaration and submit it together with your assignment.
PLAGIARISM DECLARATION FORM
Name : Kefiloe Gladys Nanisi Moatshe
Student no. : 42360854
Module code : MNG3701
I declare that this assignment is my own work and that all sources quoted have been
acknowledged using appropriate references.
Signature : KGN Moatshe
Date : 18-09-2020
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1. INTRODUCTION
Takealot.com is an e-commerce business that specializes in online retail . In this
assignment we will analyse acronym VRIO of Takealot.com and explain the relationship
between resources ,capabilities and core competences that will determine the strength and
weakness of Takealot.com. Strengths are those resources and capabilities in the
organisation that can be utilised to gain and maintain a competitive advantage in the retail
industry while the weaknesses can be resources and capabilities that can be looked at on
how to improve the organisations product in order to avoid threats from other competitors
and achieve competitive advantage . The resource-based View (RBV) will be used to
analyse the internal environment of Takealot.com to determine its strength and weakness .
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1.1 STRATEGIES HAVE TO MATCH THE RESOURCES AND CAPABILITIES
WITHIN AN ORGANISATION WITH OPPORTUNITIES IN THE EXTERNAL
ENVIRONMENT TO FORMULATE SUCCESFUL STRATEGIES .
(a) The relationship between resources ,capabilities and core competencies
1.1 Jones and Hill (2013) state that organizations have a competitive advantage over its rivals
when its profitability is greater than the average of all the organisation in this industry. Takealot
.com Sustainable competitive advantage is to be able to maintain the above -average profitability
over several years.
The resources, capabilities and competencies of an organisation are linked and need to be fully
understood in the context of internal analysis. Jones and Hill (2013) states that the competitive
advantage is based on the core competencies which can be set out as follows, “an organisations
– specific strengths thar will allow the company to differentiate its products from those offered by
its competitor.
(a) Resources
Resources are the productive assets owned by an organization and can be grouped in to five
categories, namely financial capital resources, physical capital resources, human capital
resources, organizational capital resources and technological capital resources. Organizational
resources are further classified in to tangible and intangible resources which are explained below.
Tangible resources are the organization’s physical resources that include physical infrastructure,
land, plant, vehicles, manufacturing equipment, computer hardware, physical inventory and
money. Takealot.com business strategy holds a distinctive capability to design and develop its
own operating system, hardware and application of software that will allow them to provide its
customers with new products and solutions with excellent and innovative design.
Intangible resources are resources that cannot be touched, this could range from knowledge and
know-how of managers and employees gained through experience, the intellectual property of
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the organisation including patents, trademarks and copyrights, software, human capital brand
names and reputation of organizations. This indicates that there are three types of intangible
resources namely human resource, innovation resource and reputation resource.
Capabilities
Individual resources often have limited value, but a combination of resources can become
exceptionally valuable (Nieuwenhuizen,2019). A company’s capabilities are the product of is
organizational structure, process, control systems and hiring systems. Capabilities also involve
leadership attributes; the way decisions are made and how effectively the internal process are
managed in the organization in order to achieve its objectives. Capabilities are specific-clusters
within an organisation such business processes, routines and systems developed through
complex interactions between tangible and intangible resources over time .Takealot.com uses
capabilities as a basis that contribute to its success for example the inhouse logistics capabilities
such as acquiring Mr. Delivery which was rebranded as Mr. D foods and Mr. D Courier. This
allowed Takealot .com customers to collect their parcels at take a lot pick points this will also
allow the take a lot team to deliver parcel at the required time.
Core Competencies
Core Competencies distinguish an organization from others in the industry and form the basis of
its comparative, strategy and performance (Nieuwenhuzen,2019). these competencies are
difficult to imitate by competitors and therefore they form the basis of an organisation competitive
advantage which allows Takealot to differentiate itself from its competitors (Hall,1992).
Takealot.com is a customer -centric company this has been proven through the deployment of
resources and capabilities by introducing the Takealot delivery team and opening 55 branches
nationwide and employing over 2900 drivers Takealot.com was able to develop a cutting-edge
technology and innovation. Takealot.com has a high-ranking level of service and offers its
customers superior customer service to its customer by launching 25 new pick up points
customers across South Africa have an option of their orders being delivered to their offices this
will also allow shoppers to collect orders at their convenience.
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(b) Links that provide examples of resources, capabilities and core competencies
Resources: Takealot.com is one of the highest online retail markets in South Africa with an
online market share of 50% this means that Takealot.com is dominating and selling more products
than all its competitors combined this was published by IT news website May 2017
Takealot.com has entrenched a unique reputation in the online shopping industry which has
gained an advantage for them by retaining its loyal customer base. they offer better deals, great
delivery service and customer support.
1.2 Use examples related to Takealot.com to explain the acronym VRIO.
Resources and capabilities can possibly become core competencies that can bring in a
competitive advantage, given that specific conditions are met. The analysis of resources,
capabilities and competencies is drawn closer from a resource – based view of the organisation.
For resources and capabilities to become core competencies they need to be valuable (V), rare
(R), incomparable or non-substitutable (I), and exploitable by the organisation(O)this is “VRIO
framework for appraisal “. These criteria are used to assess the value of resources, capabilities
and core competencies (Venter,2014:155).
Valuable (V) Suggests the degree to which resources and capabilities can be changed to enable
the creation of higher incentives for the customers through differentiation or low cost. An example
would be that Takealot.com endeavors to expand market interest for its products through
differentiation, which entails making its products unique and alluring to customers. The company’s
products have always been designed to be ahead of the curve compared to its competitors.
Rare (R) is applied when organizations own valuable resources or posses a rare and valuable
capability that competitors do not have or is not available to them (Venter:2014). An example of
this would be Takealot.com collection points this gives their customers the option of being able to
collect or return parcels at their convenience.
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Inimitable (I) Venter (2014) states that resources and capabilities should in someway be
protected against imitation to be valuable. This could be difficult and costly to imitate, or there
should be a better substitute. As an e-commerce business Takealot.com has exceled in many
ways unlike its other competitors that charge large amounts for courier fees, Takealot .com has
a unique business model that is difficult for its competitors to imitate and yet still offer affordable
products and delivery fees.
Organizations (O) Takealot.com cannot exploit resources, capabilities and core competencies,
as they will be of little value. “Leadership organisation, culture, strategies, policies, systems and
procedures are displayed by Takealot should result in the optimal deployment of the organisation
resources, capabilities and core competencies that could lead to effective strategies, superior
customer value creation and prestigious performance.
1.3 The resources -based view (RBV) is a model used t o analyze the internal
environment of the organisation in order to identify its internal strengths and
weaknesses.
(a) Use the RBV to identify and discuss strength and weaknesses of Takealot.com
The resource, capabilities and core competencies of takealot.com can be analyzed by using the
Resource-based View (RBV).
The RBV is a model for analyzing the internal strengths and weaknesses of an organization in
terms of its resources and linking them to opportunities in the external environment. (Venter et
al,2014; Ehlers &Lazenby,2012).it determines where the organisation can build competitive
advantage, superior performance and customer value.
Resources and capabilities are determined by value chain activities of an organisation, including
Supply-chain and operational management, financial management, research and development,
people management, marketing management as well as intangible resources such as reputation,
patents, brand names and networks. According to Jones and Hill (2013:84-85) competitive
advantage is based on core competencies which can be described as an organisation strength
that allows the company to differentiate its products from those offered by its competitors and
achieve substantial lower cost than its competitors .
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Takealot.com has combination of tangible and intangible resources, the tangible resources
include money which was the capital injection of 960 million from Naspers and 100 million
investment from Tiger global. by launching over 25 pickup points across South Africa
Takealot.com can be accessed from anywhere which is also convenient for its customers as they
can purchase products from anywhere.
The Strengths and weaknesses of Takealot.com
STRENGTHS WEAKNESSES
Takealot.com aims to be customer centric by While Takealot.com is dominating the south
being the only online shopping destination in African market, it has become a challenge for
Africa that makes shopping seamless and the company to become profitable
easy
Takealot.com has over 25 pickup points which Several products that takealot.com sells
allows customers the convenience to pickup online tend to be out of stock which ends up
their packages at a convenient time delaying the delivery time or leads to
cancellation of order
With Naspers being one of the largest
technology investors in the world and investing
R960 million with in Takealot, Takealot .com
will be able to help and improve people’s daily
lives and entertain audiences with the best
local and global content
Acquiring MR D Courier and MR D Foods
allows takealot.com to deliver packages to
takealot.com pick up points.
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Naspers increased its investment in
Takealot.com to 96% and in October 2018
Superbalist.com and Spree merged with
Naspers this will allow customers to excess
the latest trends local and international
fashion.
(b) Recommendations of how Takealot.com can overcome the identified weaknesses
Take a lot is already a number one online shopping retailer in south Africa because of that
takealot.com is not obliged to have daily specials to attract customers as their products are
already selling them selves because of its customer service. By doing this takealot.com will be
able to become profitable. Takealot .com should introduce a more use friendly link that allows
customers to view on how many product items are available before purchasing a product.
1.4 Takealot.com has a wide range of products .one of the products that they sell
online is laptops. These laptops are positioned differently in the market. Their
organizations use various business level strategies for creating and sustaining
competitive advantage
Use laptop brands as examples to explain the various business level strategies for creating
and sustaining competitive advantage
Cost leadership strategy
The aim of this strategy is to underprice competitors by building and sustaining their competitive
advantage through the reduction of costs or keeping lower than those of competitors, while
providing products and services that customers want with higher quality than their
competitors(Louw & Venter ,2010). For example, Lenovo idea pad S130-11IGM Celtron (R4725),
Asus MB168B 15.6 USb 3.0 portable led (R3228.00) this can be considered as budget friendly
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laptops with basic features targeted at a broad section of customers. Customers in this market
are not looking for frills, they are not concerned about quality and are price survey.
Differentiation strategy
The aim of differentiation strategy is to produce products and services that are unique in the
industry for customers that are not price sensitive and are willing to pay a premium price for
products and services with unique , differentiated features that they desire (Louw &
Venter,2010).For example Dell Laptop 15-inspirion 5593 Core i5 (R16,999) ,Asus ZenBook pro
UX581GV i9-9980HK 32GB 512GB SSD RTX2060 15.6 Touch Screen -Blue (R64,999) this
laptops are expensive however customers are willing to pay premium price for their unique
features .
Focus low cost leadership and differentiation Strategies
An organisation may often find itself in a situation where a low-cost strategy nor a true
differentiation strategy is feasible across a board range of the market. One option is to identify
and serve a niche or focus market competitively (Jansen Van Rensburg ,2019). For example, the
focused low-cost strategy relies on reducing cost and increasing sales volumes Asus MB168B
15.6 USb 3.0 portable led (R3228.00) this is a low-cost laptop suitable for high school and
university students.
Focus differentiation strategy relies on achieving high profit margins for example Asus ZenBook
pro UX581GV i9-9980HK 32GB 512GB SSD RTX2060 15.6 Touch Screen -Blue (R64,999) this
laptop is unique and match the requirements and taste of the targeted customers. These
customers are not price survey and are willing to par premium for the unique features of the
laptops for example IT gurus.
Best-cost provider strategy
This strategy seeks to achieve a lower price than competitors while trying to keep the value of the
product or service at the same levels as its competitors or to provide greater value at the same
price as competitors (Jansen Van Rensburg,2019). For example, HP notebook 255 G7-AMD A4-
9125 ,4 GB (R5,199), Dell Inspiron 3593 15.6 FHD (R7999) these laptops are affordable and offer
superior features at lower price therefor giving value for money.
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CONCLUSION
Organisations must regularly scan and monitor its internal environment as their competitiveness
and profitability depends on how effectively they manage the resources they have at their
disposal. it is therefore critical that Takealot.com identifies both its strength and weaknesses that
are elated to their internal environment. In order to stay competitive in the online retail market
Takaalot.com must use its strengths to increase their market share and profitability and continue
to outperform its competitors, at the same time, Takealot has to investigate the resources
identified as weaknesses. The internal analysis of Takealot internal environment indicates that
Takealot has countless number of strengths and fewer weaknesses. Their future strategy should
focus on eliminating their weaknesses and converting them into strengths as this will help them
to obtain a bigger market share in the online retail market industry.
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REFERENCES
Hall, R.1992.The strategic analysis of intangible resources. Strategic management
journal.13,135-144.
Jansen Van Rensburg, M.2019. The external context of strategy. In: Venter p.(ed). Practicing
Strategy: A Southern African context. Cape Town: Juta.
Louw, L & Venter, P.2010.Strategic Management: Developing sustainability in Southern Africa
.2nd edition. Cape Town: Oxford.
Nieuwenhuizen, C.2019’strategic resources and capabilities, In: Venter P.(ed). Practicing
Strategy: A Southern African context. Cape Town: Juta
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