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Petronas 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 Petronas to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Petronas? Defining Valuable in VRIO
A resource or capability is considered valuable for Petronas , if it allows the
Petronas to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Petronas to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Petronas.
What are Rare Resources for Petronas? Defining Rare in VRIO
In an industry that Petronas operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Petronas require rare resources to compete in the industry. If Petronas don’t have rare resources that are required to succeed in the industry then Petronas won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Petronas competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Petronas? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Petronas 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. Petronas 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 Petronas
What is a Organization for Petronas? Defining Organization in VRIO
Even if the Petronas 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 Petronas 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 |
---|---|---|---|---|---|
Successful Implementation of Digital Strategy at Petronas | Yes, without a comprehensive digital strategy it is extremely difficult to compete | No, as most of the firms are investing into digitalizing operations | Can be imitated by competitors | One of the leading player in the industry | Digital strategy has become critical in the industry but it can't provide sustainable competitive advantage to |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Petronas | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Petronas dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Position among Retailers and Wholesalers – Petronas retail strategy | Yes, Petronas has strong relationship with retailers and wholesalers | Yes, Petronas has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Financial Resources of Petronas | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Petronas has reasonably sound financial position | Petronas has relatively sustainable Competitive Advantage |
Opportunities in the Adjacent Industries that Petronas 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Petronas in delivering lower costs | No | Can be imitated by competitors of Petronas but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Customer Community of Petronas | Yes, as customers are co-creating products | Yes, the Petronas has able to build a special relationship with its customers | It is very difficult for Petronas competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Petronas customers community ecosystem | Providing Strong Competitive Advantage |
Track Record of Leadership Team at Petronas | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Petronas to thwart competition | Yes, IPR and other rights are rare and competition of Petronas will find it extremely difficult to copy | Risk of imitation is low but given the margins in the industry disruption chances are high | So far the firm has not utilized the full extent of its IPR & other properties | Providing Strong Competitive Advantage |
Brand Positioning of Petronas in Comparison to the Competitors | Yes | No | Can be imitated by competitors but it will require big marketing budget | Yes, the firm has positioned its brands based on consumer behavior | Temporary Competitive Advantage |
Sales Force and Channel Management of Petronas | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Petronas sustainable competitive advantage. Potential is certainly there. |
Pricing Strategies of Petronas | Yes, Petronas has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Petronas with a Temporary Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Petronas SWOT Analysis, SWOT Matrix, Weighted SWOT Case Study Solution & Analysis
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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