Strategy and Competitive Advantage Case Study

Strategy and Competitive Advantage Case Study

Creativity is the most vital component behind any firm achieving consistent profits in a highly competitive business environment. Coolburst is a fictional company based in Miami which has been a market leader in the fruit juices segment of the food industry for over a decade. Recent times have seen the company stagnate at $30 million in revenues for four consecutive years. The contents of this paper attempt to identify the problems behind the lack of improvement inproceeds realized by Coolburst, analyze those problems and offer appropriate recommendations towards remedying the situation. This case study will, therefore, draw from the resource-based framework to investigate internal issues facing the business using the VRIO model of Valuable, Rare, Inimitable, and Organizationally usable resources to solve the predicament of lack of creativity at the Miami-based firm.

Identifying the Problem

The main issue behind the low performance of the fruit juice company is a lack of creativity among the staff.  The traditions of the company seem to encourage the employees to master the production of drinks using the same old methods they used in the 70s without an urge to be innovative or creative. Velez, a dejected worker at Coolburst, exemplifies this observation by observing that urging fellow employees to do things differently would only leave them clueless, owing to the rigid traditions they are accustomed to(Wetlaufer). Jenkins, the only creative person in the group, is visibly frustrated by the lack of dynamism in production methods adopted by his fellow workmates(Wetlaufer). He is keen to encourage the company management and his colleagues to consider innovation, rightly observing that the reason main behind the past successes of the firm is the sheer lack of competition in the market. The competitive advantage previously enjoyed by Coolburst has since changed owing to new entrants in the fruit juice industry. The reluctance of the company to infuse creativity and innovation has therefore translated to reduced fortunes after a decade of dominance in the fruit juice market in the U.S.

Analysis of the Problem at Coolburst

The problem of diminished revenues at the company stems from under-utilization of the internal capabilities which Coolburst is endowed with. From the case study, it is evident that the company and its employees have been in the fruit juice industry for over a decade. The wealth of experience they have accumulated is underutilized by the company’s management. The fruit juice makers struggle to attract creative talent within its workforce.  Unfortunately, the management seems clueless regarding harnessing the rare creative talent among the employees like Jenkins and Velez (Wetlaufer). It appears that those involved in top decision making at the company are visibly uncomfortable at the possibility of introducing innovative ideas in the production and marketing processes used by Coolburst(Wetlaufer). The stifling of creative talent, coupled with the inability of the company to attract innovative individuals seems the principal reason behind the stagnation of profits.

Recommendations to Solve the Problem

The basis of recommending the possible actions to improve revenues at Coolburst is based on using the VRIO model of Valuable, Rare, Inimitable, and Organizationally usable resources to identify competitive advantage that arises from features internal to the firm. The VRIO model uses the firm’s routines and processes to determine the possible areas of improvement (Bensoussan et al. 54).Employee engagement refers to the degree to which employees have involved and the strength of their work (Noe). A higher degree of employee engagement boosts the productivity of the firm. In the case of Coolburst, it is evident that the only creative people in the workforce feel unwanted and undervalued, which in turn suppresses their output. Poor engagement of the workforce by the management is, therefore, the core reason for the continued plateauing revenues. Based on the VRIO model of the resource-based framework, Coolburst needs to make its employees feel valued and create an environment which fosters creativity and innovation.

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