EVEN though the Jamaican economy has begun to grow again and many sectors have begun to see demand rebound, the reality on the ground is that consumer spending continues to be muted, and many small businesses are now considering whether it will be possible to continue.

Company or individual savings which were accumulated up to 2020 may now be running out and you may be sincerely considering closing down. However, this week, we are suggesting you scan resources within your possession or accessible to you to determine if new demand can be found for your goods and services, despite the downturn.

In advance of doing this, one tool of assessment to use is the VRIO analysis which allows you to determine the competitive strength of your business and its services, or resources within it. VRIO refers to resources which are valuable, rare, inimitable and capable of organisation.

Value

This refers to the benefits and opportunities which are associated with the internal resources of the business which is being reviewed. With these resources or skills in your possession, you are able to reduce competitive threats. The community benefits from the existence of the service and its use has resulted in multiple referrals in the past. Yet, if the good or service is too expensive this might somewhat reduce its value in the context of reduced consumer spending power. Changes in pricing, within the confines of production costs, will not reduce value but might, instead, reposition your goods or service for sustained competitive advantage. Cut the price and promote the value.

Rarity

Ask the question, how rare is what you have to offer? If your resource is hard to find or to source, it will indeed provide competitive strength in relation to your ability to survive. Rarity refers to supply and access. Do you have access to resources which are not easily available and yet are highly desired? This is another positive indicator for competitive strength. However, ensure your rare skill or product is targeting the right consumer segment. When demand falls among your usual targets it might be time to take a wider look at the environment to find other segments in which the resource might be beneficial, to the point of even convincing new clients that use of your services will increase their own competitive advantage. Sometimes you will have to act in combination with others to create increased demand in this context. For example, a joint venture to buy and upgrade dilapidated properties, in the context of strong demand for affordable rentals or homes for sale, might open a new pipeline of opportunities for both partners in this collaboration. What you are considering can place you in a strong position if what you are contemplating remains rare. If the resource you are thinking of re-engineering is easily duplicated, think twice, as what you have to offer would no longer be considered rare.

Inimitable

The resource you are looking at is indeed hard to achieve or access, but other companies or people have developed substitutes which are easily accessed or can more easily do what you are planning because of their resource base.Value and rarity can be reduced as competitive advantages if there are imitation products or copycat initiatives which have attracted the attention of consumers. Your resource/service/ offering must be one which cannot be imitated in order to deliver true competitive advantage.

Organisation

So, you have encountered this resource which is potentially valuable, rare and inimitable, but can it be controlled or organised? If not, this would be a weakness. For instance, you might have encountered highly talented and skilled individuals who together could bring a competitive advantage in markets you are considering. However, one or more may suffer from addictions or be otherwise unable to conform to systems and behaviours that will allow management to organise them into a business unit and offer their service. If training might change the behaviour, though, organisation is possible. If all factors are in place under the VRIO analysis, the resource being examined will provide competitive advantage. Now you can look into how your business can use the resource to full advantage. This might require additional research into who needs the service or product you are offering most.

When this is decided, look into how marketing, advertising and distribution can be synchronised or how they can work together to increase sales.