Pestel Analysis

Internal Analysis

A company’s internal environment includes its resource, capabilities, and activities. When managers make choices, the company’s own resources and capabilities determine what choice he/she should make. The observation and understanding of internal environment can help managers to allocate, reconfigure, and exploit what they have.

VRINE Analysis:

• Value: A resource or capability is valuable if it enables a company to take advantage of opportunities or to fend off threats in its environment.

The joint venture is highly valuable. In fact, Charles River Laboratories served customers in more than 15 countries worldwide so that its business was expanded worldwide. On the other hand, after being vaccinated, the SPF eggs can bring much more food safety to customer’s health. In each year, companies that produced influenza vaccines alone consumed more than 100 million eggs. In addition, the demand for SPF eggs had exceeded available supply by between 5 percent and 10 percent worldwide. Finally, according to the project, the joint adventure can improve the operation margin by 20 percent and the sales can be doubled in four years.

• Rarity: A scarcity relative to demand.

The rarity is quite high. For CRL, they still use standard farm-grade eggs to produce influenza vaccines. There are few franchises completely switch to SPF eggs because they used to produce cheaper farm-grade eggs in “old chicken farm”. In the same time, some competitors concern about the media that portrayed Mexico as a country plagued with endemic corruption and economic instability, so they show less interest to try new products in Mexico. However, SPAFAS took long time to do sufficient research on ALPES. Both of them form an “open relationship” and benefit from their affiliation, which is a particular advantage to them.

• Inimitability: A characteristic that make it hard for competitors to copy may also have detrimental consequences for the company....