Resource-Based Competitive Strategy for Oil Palm Seedling Business: a VRIO Framework Analysis

Abstract

Background: The oil palm seedling business represents a critical segment within Indonesia's agribusiness sector. Competition among seedling suppliers in Riau Province has intensified, driven by the proliferation of counterfeit seedlings and expanding smallholder plantation areas, creating substantial demand for certified seedlings.
Purpose: This study examines the sources of competitive advantage in a state-owned enterprise's oil palm seedling business unit using the VRIO framework to identify sustainable competitive advantages and develop strategic recommendations.
Design/methodology/approach: A qualitative single-case study design was employed, combining semi-structured, in-depth interviews with three key internal informants purposively selected based on their roles in the seedling value chain, direct field observations, and internal document analysis. Value chain mapping identified 19 internal resources and capabilities, evaluated in two rounds using a structured VRIO checklist and a focus group discussion to resolve scoring differences across eight contested elements. Consistent with the single case, informant-based approaches to theory elaboration in strategic management research, the design prioritizes analytic depth and internal validity over statistical generalizability.
Findings/Results: Seven elements constitute sustainable competitive advantages: technology utilization in seedling maintenance (CCTV, water sprinkler, sprayer drone), superior seedling quality, standard operating procedures, external network management, online ordering website, corporate reputation, and learning organization. Six elements provide temporary competitive advantage, while the other six represent competitive parity.
Conclusion: Sustainable advantages primarily derive from intangible resources and organizational capabilities rather than physical assets. Six strategic recommendations are proposed: strengthening R&D, enhancing quality monitoring, developing website features, establishing vertical alliances, implementing community programs, and optimizing learning organization practices.
Originality/value: This research demonstrates the application of the VRIO framework in agricultural input markets with credence quality attributes, highlighting how state-owned enterprises can develop sustainable competitive advantages through systematic resource management in quality-sensitive supply chains. The findings are interpreted as organizationally embedded assessments of resource-based competitive position within a single case, intended to elaborate rather than test existing RBV and VRIO propositions.

Keywords: competitive advantage, oil palm seedlings, resource-based view, strategic management, VRIO framework