Resources and competences of Rocket Internet outlined in the case
Discuss about the Case Study for Business Strategy of Rocket Internet.
The report depicts the importance of Rocket Internet in recent business strategies of Rocket Internet Company (Rocket Internet 2016). The company is headquartered in Berlin and it provides valid platforms to builds online startup businesses. The company is founded in the year of 2007, and the founders of the company are Marc, Oliver and Alexander Samwer. The number of employees currently working for the company is around 30,000. It gives office space to new companies.
The resources used by the company and the other competences outlined in the given case study will be discussed in this report additionally, the threshold of the company and in a parallel manner the distinct and dynamic capabilities of the company are also going to be discussed in this report brief. The report will also provide a VRIO analysis for Rocket internet. The company is maintaining their traditional business strategic model but currently the organization is trying to improve their business framework.
From the detail analysis of the case study it has been defined that, though Rocket internet has enough financial skills for their venture capital firm but still they are trying to obtain promising technical platform in order to gain development.
Resources of Rocket Internet: There are several expert teams that play a supportive role for the company (Wilson and Boldeman 2012). The expert team is not only in the sector of marketing management but also exists in customer management team, business intelligence and operation team. Rocket internet does not recruit only regular staffs but also for global venture development expert team is also recruited (Matthews and Brueggemann 2015). The employees generally recruited by the company have analytical skills along with entrepreneurship management ideas. Based on the structure of Silicon Valley entrepreneurial support and head of the Human Resource department are selected. The co founder and the managing director of the company are collaboratively working for the business development. Due to financial development they generally recruits extraordinary and MBA level knowledgeable people for their company. Not only this, but also the company uses best of the business models. The founders of the company were inspired from the entrepreneurial culture and especially from eBay (Wilson and Boldeman 2012). However from the critic’s point of view it has been defined that the company is a complete copycat that does not have any innovative ideas rather it only steals ideas from other business organizations.
Threshold, distinctive and dynamic capabilities of Rocket Internet
Competences of Rocket Internet: Though, Rocket internet is referred to as one of the successful companies, but the concept of the business is just a revolution of previously planned business models used by other organizations. The business strategy of the company is framed at the head office of the company (Mitchell 2013). Apart from this, they launched an internal novel business model. Additionally, the distributive business model framed by the company support multiplying business models and also it has been illustrated rapidly for online business models. It provides a combination of talented employee and high standard approaches in terms of systemized platform.
Being world’s largest internet platform outside United States and China it has the capability to identify the basic need o the consumers. On the other hand, the company also copies a proven model of business for the financial scale up (Schildhauer 2016). Four basic factors that come under consideration for Rocket internet are- rocket network of the companies, technology maintains by the company and the process with infrastructure of the company. There are many organizations that are determined to be the tough competitors of Rocket Internet. As, the vision of Rocket internet is to be the biggest builder outside Chin and United States thus, they everyday they are proofing to be the market leaders. In Berlin project venture and HUT group of UK are known to be the tough competitors to Rocket internet (Keeton et al. 2012). The global reach of the company covers the largest internet and mobile audiences.
Threshold capability is referred to as the resource capability and survival power of Rocket internet. The threshold competency is the state of art technology and the skills that has been developed by the employees of Rocket Internet (Eckard et al. 2015). From the distinctive resource perspective it has been defined that, the values and norms of Rocket internet is completely based on its dominant brand reputation.
Threshold resources: The Company is headquartered in Berlin with more than 700 employees and the network operates by the company for above 25 international Rocket offices (Keeton et al. 2012). The number of employees in the Rocket internet portfolio companies is above 15,000. Apart from this it also provides a strong financial backup to the startup companies. For the operating department of the company more than 250 specialists are recruited.
Threshold capabilities: The skills for website development adopted by Rocket Internet Company is very high as the product serves by them are based on high quality. Additionally, specialization in IT software, programming and web design skills helps the organization to develop the quality of the products (Schildhauer 2016). Current emerging technologies and IT diagnostic tools utilization support Rocket Internet to reach the ultimate goal preset for the company. However, proper execution of other company’s ideas in appropriate market with the emerging technical help is another capability of the company.
VRIO analysis for Rocket Internet
Distinctive capabilities: The distinctive resource competencies states that the founder of the company is Sarnwer brothers. The brand name and the reputation of the company are very powerful. The strategies and decision making capability on the basis of the centralized models developed by Rocket internet helps it to improve the entrepreneurial working culture (Yoden 2014). The infrastructure and network distribution method maintains by the company helps them to create ventures on international scale (Rocket Internet 2016). The resource of the company is Global venture development team. The decisions and overall business strategies are largely shaped and the speed of new strategic business model launching is very high. The entrepreneurial culture adopted by the company leads the employees to work for a long time under huge pressure. In addition to this, recruitment benchmark has also setup for the company due to the presence of these distinctive competencies (Mitchell 2013).
Dynamic capabilities: Inspirational leadership and determination of the employees helps the organization to reach the top (Schildhauer 2016). Rocket Internet is looking for strong leadership along with internal motivation and influence, analytical and conceptual skills.
VRIO analysis is one of the most effective analytical tools, used to determine the competitors of the company considering various evaluation dimensions. VRIO analysis considers the resource or capabilities and core competencies. Some of the resources meet all the four basic requirements to gain sustainability in the competitive business marketplace.
Valuable: The strategic capabilities adopted by the company are able to generate the needs of the consumers in terms of product quality and the services served by the organization. Rocket internet avails rare and unique resources or capabilities (Lee 2015). The uniqueness of the organization helps it perform in a much better way to compete other rivalries. For Rocket Internet all the resources such as ability to raise capita amount, employee compensations, human resource management team and the core competencies include relationship with other companies, presence of innovation, experiences of the consumers and the corporate leadership and vision (Mitchell 2013). All these resources are valuable for Rocket Internet.
Rare: From resource analysis it has been determined that some of the resources such as expert team and the financial risk management team are rare resources. These resources provide temporary competitive advantages.
Imitate: As the company do not possesses it own business model for evaluation therefore, imitation on the business models of other companies charge cost to Rocket Internet. The capabilities and competitiveness of the company are so much vast that imitation or simulations of the capabilities are not possible (Matthews and Brueggemann 2015). Though, Rocket Internet cannot identify the particular resources still, it is able to provide comparable products to the competitive market.
Org support: The main tool used by Rocket internet group is cash that is available for sale financial assess. Credit risk is another risk comes under consideration while comprises with the direct risks. Organizational support in terms of investment helps Rocket Internet to create more competitive advantages throughout the world. The organizational gained support from Groupon, eBay, Linkedin, Zynga and Facebook.
Figure 1: VRIO analysis of Rocket Internet
(Source: Mitchell 2013, pp-340)
From the overall discussion it can be concluded that, Rocket Internet is one of the largest ecommerce investor of Germen. It also shares 43 percent focus on the other organizations. The company is continuing to its innovations and evaluations for private funding and other alternatives. The report has discussed the distinctive resources and general competencies adopted by rocket internet. In addition to this, it also illustrated the distinctive, dynamic and threshold capabilities of the company. Finally, from the VRIO analysis of Rocket Internet is has come to focus that all the resources used by the company are valuable. The HR management team and risk management team is rare it means does not used by any other organizations. the analysis states that, the competitive advantages are not valuable.
Eckard, K., Eaton, H., de Giacomo Araujo, M. and Smith, S., 2015. Rocket Internet: Clone Factory or Long-Term Stakeholder
Keeton, K.E., Schmidt, L.L., Slack, K.J. and Malka, A.A., 2012. The rocket science of teams. Industrial and Organizational Psychology, 5(1), pp.32-35.
Lee, C.M., 2015. THE EFFECTIVE SECURITY MEASURES AGAINTS INTERNET FRAUD.
Matthews, C.H. and Brueggemann, R., 2015. Innovation and entrepreneurship: A competency framework. Routledge.
Mitchell, S.T., 2013. Space, Sovereignty, Inequality: Interpreting the Explosion of Brazil's VLS Rocket. The Journal of Latin American and Caribbean Anthropology, 18(3), pp.395-412.
Muhammad, L.J., Ali, A.G. and Iliya, I.S., 2015. Security Challenges for Building Knowledge-Based Economy in Nigeria. International Journal of Security and its applications, 9(1), pp.119-124.
Rocket Internet, (2016). Rocket Internet. [online] Available at: https://en.wikipedia.org/wiki/Rocket_Internet [Accessed 24 Aug. 2016].
Schildhauer, T., 2016. OPEN INNOVATION FROM AN ORGANISATIONAL PERSPECTIVE (Doctoral dissertation, University of Arts, Berlin).
Scott, M., 2013. Technology Start-Ups Take Root in Berlin. Technology, 9, p.06.
Wilson, K.L. and Boldeman, S.U., 2012. Exploring ICT integration as a tool to engage young people at a Flexible Learning Centre. Journal of Science Education and Technology, 21(6), pp.661-668.
Yoden, M., 2014. Global expansion strategies for software firms (Doctoral dissertation, Massachusetts Institute of Technology).
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