- Explain VIRO framework (see Week 3 session), and apply the VRIO Framework in the following settings. Will the actions described be a source of competitive disadvantage, parity, temporary advantage, or sustained competitive advantage? Explain your answers.
a. Procter and Gamble introduces new smaller packaging for its laundry detergent, Tide.
b. American Airlines announces a 5% across-the-board reduction in airfares.
c. The New York Yankees sign All-Star pitcher Randy Johnson to a long-term contract.
d. Michael Dell uses the money he has made from Dell Computers to purchase the Dallas Cowboys football team.
- Your friend calls you and asks to borrow $15,000 so the he can open a pizza restaurant in his hometown. He acknowledges that there is a high degree of direct competition in this market, that the cost of entry is low, and that there are numerous substitutes for pizza, but he believes that his pizza restaurant will have some sustained competitive advantages. For example, he is going to have sawdust on his floor, a variety of imported beers, and a late-night delivery service. Would you like to lend your friend the money? What are the risks in lending him the money? (In terms of VRIO criteria)