BYD Company’s Internal Environment Analysis


The Resource-Based View (RBV) evaluates and explains its resources to comprehend how it builds a sustained competitive edge. The RBV emphasizes the principle of difficult-to-imitate business characteristics as elements of superior effectiveness and competitive efficiency (Assensoh-Kodua 143). Resources that are impossible to convert or acquire that involve a lengthy period of adjustment or a significant shift in the firm’s atmosphere and attitude are more significant to the corporation and thus more difficult for rivals to mimic.

RBV defines an institution as a confluence of physical, intellectual, and organizational assets. Company Organizational resources that are valued, scarce, imitable, and imperfectly replaceable are the primary source of persistent exceptional productivity. According to RBV, resources include capital, management systems, firm qualities, knowledge, and expertise managed by the entity and may be used to design and implement plans (Assensoh-Kodua 143). BYD has the following resources that enable it to create a robust competitive edge among its rival.

Organizational Capital Resources

A functional structure is, undoubtedly, the most prevalent institutional design kind. The goal of the majority of small firms is to organize their employees by sector as their firms expand, and organizing employees by multiple tasks frequently makes the most sense. BYD reengineered its operations to address the presented market concerns due to its expansion. A significant hurdle for BYD at the moment is China’s policy change of encouraging the use of high power density per unit renewable battery technology in home industries. The firm’s LFP li-ion batteries cannot match the increased demand, compelling the firm to invent new tripartite li-ion battery features (Ding et al. 20). New capacity is now being added to reach 10GWh ternary lithium-ion batteries by 2017 (Ding et al. 20). The division specializes in producing Lithium Iron Phosphate and ternary Li-ion electrodes (Ding et al. 20). BYD’s managerial adjustment would make it the most excellent vendor for all automobile manufacturers in this market (Liu et al. 118). Furthermore, the adjustment enabled it to minimize the number of suppliers in its distribution network, resulting in lower EV production costs.

Human Capital Resources

BYD employs a variety of human capacity tactics during its development. Since China’s domestic vehicle manufacturing innovation lags behind industrialized economies, BYD first replaced mechanical operation with manual effort and encouraged workers to replicate and build on other good car makers (Wang et al. 206). Simultaneously, to compensate for its technological deficiency, it reserved many technical talents throughout the early stages of its growth. Following the country’s success, it focuses on optimizing the corporation’s structural features.

BYD has consistently adhered to an employee-centric recruitment policy, respected personnel rights, prioritized talent advancement, encouraged employees to pursue modernization and worked to create an equitable, just, and open functioning and growth workplace for staff. In addition, BYD adheres to the principle of putting tasks first and individuals first, places a premium on staff training, enhances members’ excellence and capabilities through training, and develops coworkers’ professional competency and aptitude through activities and assignments in a research application.

Value Chain, Resources, and Capabilities

BYD, as a typical standalone corporation, is also a frontrunner of alternative energy cars. It offers significant advantages upfront in the value chain, particularly in the R&D connections. BYD’s most excellent edge is in the battery industry, and it is entirely self-sufficient in terms of R&D, design, and manufacturing (Putri and Maula 256). With over two decades of constant improvements, the company’s commodities have expanded to include household 3C cells, energy capacitors, and photovoltaic panels (Putri and Maula 256). Moreover, storage technology capacitors, and other disciplines, forming a comprehensive battery industrial chain, also form the firm’s goods.

Additionally, BYD’s three-electric technology and automotive architecture evolved independently, and the degree of compatibility is higher than that of most automakers, including Tesla. BYD has already indicated that it will expand its three-power network and begin offering its E-platform to other automakers, demonstrating its trust in its innovation (Sarkar et al. 2453). BYD lags behind multinational companies in the supply chain, driven by scale and sophistication, regardless of cost or efficiency. However, being a well-known national brand, BYD’s manufacturing connection is not a drawback. By and large, BYD’s competitive edge in the principal value chain is self-evident.

The RBV has been significant in elucidating the mechanism through which a company’s resources and abilities contribute to long-term competitive advantage. To give a competitive edge and long-term effectiveness, a resource must meet the ‘VRIN’ criteria. BYD possesses tangible and intangible resources and expertise that provide it with a significant competitive edge over other automakers. Due to the diverse resources and competencies have a strategic advantage due to achieving the VRIN criteria stated below.


BYD’s financial resources have enabled it to conduct extensive research on innovative methods to manufacture better environmentally-friendly vehicles. Therefore, the necessity of reducing carbon emissions and increasing energy efficiency is a continuing focus of BYD in the automotive industry, particularly in China. Its primary strength is its patented iron phosphate battery, which is ecologically benign, safe, dependable, and entirely recyclable. After 10,000 charging cycles, it retains more than 70% of its capacity and is subjected to challenging testing such as flames, short circuits, prodding, hitting, excessive temperatures, expansion, and overload (Song et al. 3). BYD presently operates 20 plants worldwide, 14 in China and six in Russia, Syria, Egypt, Sudan, the United States of America, and Brazil (Song et al. 3). Therefore, market expansion has made BYD a problematic force in the automotive business, boosting its sales and profit margin.


Resources must be scarce among the company’s current and potential competitors. As a result, resources must be scarce or distinctive to provide competitiveness. BYD Auto is the most self-sufficient national brand and a market leader in electric cars due to its innovations. BYD has pioneered the development of environmentally friendly commodities such as solar farms, cell energy storage stations, e – mobility, and LED lighting. The unique technology innovations have offered it a competitive edge since customers prefer their vehicles to others. Multiple firms cannot achieve a competitive advantage because they cannot design and implement a unique organizational approach concerning BYD’s competition.

Imperfect Imitability

Imperfect imitability precludes the possibility of copying or imitating the resources. BYD makes it extremely difficult for opponents to reproduce it by owning a large number of patents. Additionally, it has set aside a sizable fund for research and innovation. By growing R&D expenses, competitors will find it increasingly difficult to duplicate BYD. The company’s intangible assets and talents, particularly its highly successful management team and entrepreneurial CEO, have enabled it to establish a non-impeachable competitive position in the industry.


Non-substitutability of resources means that another alternate material can’t replace resources. The BYD Company has electrified the planet’s automotive industry by its comprehensive conventional strategic emphasis for its advertising scheme and operations. This more extensive approach is tailored at various national stages and modified for nations depending on different target organizations and communities. This personalization has helped BYD to boost its prominence and build strong brand recognition.


BYD’s commitment to transforming the global automotive market has been enhanced through attractive and supportive company culture. The firm’s corporate culture fosters learning and success for the business as a whole and staff members. The company culture encourages an open communication process and encourages participation and cooperation. Thus, this is a critical capability and tool for the BYD Company since it enables it to expand abroad and support numerous diversifications. Additionally, its financial capabilities have enabled it to invest more in research and development, thus giving it a competitive advantage.

Works Cited

Assensoh-Kodua, Akwesi. “The Resource-Based View: A Tool of Key Competency for Competitive Advantage.” Problems and Perspectives in Management, vol. 17, no. 3, 2019, pp. 143-152.

Ding, Yuanli, et al. “Automotive Li-ion batteries: Current Status and Future Perspectives.” Electrochemical Energy Reviews, vol. 2, no. 1, 2019, pp. 1-28.

Liu, Zhixiang, et al. “China Progress on Renewable Energy Vehicles: Fuel Cells, Hydrogen and Battery Hybrid Vehicles.” Energies, vol. 12, no. 1, 2019, pp. 117-127.

Putri, Rizky Anggia, and Maula Hudaya. “Reimaging Post COVID-19 Global Value Chain: Case Study of Automotive and Electronic Companies in China.” Global Strategies, vol. 15, no. 2, 2021, pp. 255-286.

Sarkar, Epica Mandal, et al. “Lithium-ion Battery Supply Chain: Enabling National Electric Vehicle and Renewables Targets.” Curriculum Science, vol. 114, 2018, pp. 2453-2458.

Song, Yuan, et al. “Sustainable Strategy for Corporate Governance Based on the Sentiment Analysis of Financial Reports with CSR.” Financial Innovation, vol. 4, no. 1, 2018, pp. 1-14.

Wang, Liwen, et al. “Resources, State Ownership and Innovation Capability: Evidence from Chinese Automakers.” Creativity and Innovation Management, vol. 28, no. 2, 2019, pp. 203-217.

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