Question

1. VRIN Resources/Internal Analysis

Skunge Inc. is an engineering firm which designs and manufactures industrial equipment. They have decided to expand their internship program where college juniors work on-site for a summer and then are given preferential treatment when applying for a full-time job after graduation. Former interns who then stay with the company, full-time, for at least two years are given a special bonus. Do you think this policy has the potential for creating a competitive advantage? Use VRIN characteristics when explaining your answer.

Answer 1

Yes, this policy has the potential for creating a competitive advantage.

College juniors who do their internship in the firm gain experience and knowledge about the process which benefits the students as well as the firm. By providing bonus to those who stay with the company for at least two years, the company is retaining employees with work experiences. By doing so, it has resources of more value more than its competitors. It also retains rare resources by providing incentives to the interns. This policy stops the experienced interns from moving to other firms, hence the characteristic '''inimitability' is fulfilled. Though there may be other valuable employees at other firms, these interns cannot be substituted.