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Enterprise Products Partners VRIO / VRIN Analysis | Assignment Help
What is VRIO / VRIN Analysis ?
VRIO stands for – Value of the resource, Rareness of the resource, Imitation Risk, and Organizational Competence.
VRIO is a resource focused strategic analysis tool.
To build a sustainable competitive advantage the resources that –casename— needs to be valuable, rare, and difficult to imitate. Secondly the –casename— needs to possess capabilities, organizational structure, and culture to optimize the available resources usage. VRIO analysis can help organizations such as Enterprise Products Partners to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Enterprise Products Partners? Defining Valuable in VRIO
A resource or capability is considered valuable for Enterprise Products Partners , if it allows the
Enterprise Products Partners to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Enterprise Products Partners to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Enterprise Products Partners.
What are Rare Resources for Enterprise Products Partners? Defining Rare in VRIO
In an industry that Enterprise Products Partners operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Enterprise Products Partners require rare resources to compete in the industry. If Enterprise Products Partners don’t have rare resources that are required to succeed in the industry then Enterprise Products Partners won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Enterprise Products Partners competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Enterprise Products Partners? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Enterprise Products Partners for certain period of time as all the competitors are going to try to imitate or replicate that resource. A sustained competitive advantage emerges, if the resource is difficult to imitate by the competitors. Enterprise Products Partners can create inmitability by innovating on the product side, reducing pain points on service delivery, and having an effective post sales servicing strategy.
Check out the SWOT analysis of Enterprise Products Partners
What is a Organization for Enterprise Products Partners? Defining Organization in VRIO
Even if the Enterprise Products Partners has all the valuable resources that are both rare and difficult to imitate, it won’t automatically result into a sustainable competitive advantage. The key to build the sustainable competitive advantage is to have organizational capabilities, expertise, and structure to exploit the resources. If Enterprise Products Partners is not organized based on its strengths then it won’t able to exploit all the resources that it possesses.
Resources | Value | Rare | Imitation | Organization | Competitive Advantage |
---|---|---|---|---|---|
Enterprise Products Partners Customer Network and Loyalty | Yes, 23% of the customers contribute to more than 84% of the sales revenue | Yes, firm has invested to build a strong customer loyalty | Has been tried by competitors but none of them are as successful as Enterprise Products Partners | Enterprise Products Partners is leveraging the customer loyalty to good effect | Provide Enterprise Products Partners medium term competitive advantage |
Pricing Strategies of Enterprise Products Partners | Yes, Enterprise Products Partners has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Enterprise Products Partners with a Temporary Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Enterprise Products Partners dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Supply Chain Network Flexibility of Enterprise Products Partners | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Enterprise Products Partners organizational structure and capabilities | Keeps the business running |
Access to Cheap Capital for Enterprise Products Partners | Yes, as a leading player in the industry and current macro economic conditions, Enterprise Products Partners has access to cheap capital | No | Can be imitated by the competitors of Enterprise Products Partners | Not been totally exploited | Not significant in creating competitive advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Enterprise Products Partners | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Opportunities in the Adjacent Industries that Enterprise Products Partners can exploit & New Resources Required to Enter those Industries | Can be valuable as they will create new revenue streams | No | Can be imitated by competitors | All the capabilities of the organization are not fully utilized yet | Has potential |
Marketing Expertise within Enterprise Products Partners | Yes, firms are competing based on differentiation in the industry | No, as most of the competitors also have good marketing departments and expertise | Pricing strategies of Enterprise Products Partners are often matched by competitors | Yes, Enterprise Products Partners is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Global and Local Presence of Enterprise Products Partners | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Enterprise Products Partners but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Brand awareness of Enterprise Products Partners products and services | Yes, the brand awareness of Enterprise Products Partners products are high | Yes, Enterprise Products Partners has one of the leading brand in the industry | No | Enterprise Products Partners has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Enterprise Products Partners operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Enterprise Products Partners is successful at it | Providing Strong Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Opportunities in the E-Commerce Space for Enterprise Products Partners - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Enterprise Products Partners can exploit the emerging opportunities | No, most of the competitors are investing in IT to enter the space | The AI and inhouse analytics can be difficult to imitate | It is just the start for the organization | In the long run it can provide sustainable competitive advantage |
Sales Force and Channel Management of Enterprise Products Partners | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Enterprise Products Partners sustainable competitive advantage. Potential is certainly there. |
Books and References
Ahir Gopaldas and Anton Siebert (2022 July August) "What You’re Getting Wrong About Customer Journeys",
Harvard Business Review , 92
Linda A. Hill, Emily Tedards, and Taran Swan (2021) "Drive Innovation with Better Decision-Making", Harvard Business Review 86
Dyer, J. H., & Hatch, N. (2004). Using Supplier Networks to Learn Faster. Sloan Management Review, 45(3), 57–63
Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17, 99–120
Dyer, J. H., Kale, P., & Singh, H. (2004, July–August). When to ally and when to acquire. Harvard Business Review, 109–115
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