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Duke Energy 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 Duke Energy to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Duke Energy? Defining Valuable in VRIO
A resource or capability is considered valuable for Duke Energy , if it allows the
Duke Energy to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Duke Energy to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Duke Energy.
What are Rare Resources for Duke Energy? Defining Rare in VRIO
In an industry that Duke Energy operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Duke Energy require rare resources to compete in the industry. If Duke Energy don’t have rare resources that are required to succeed in the industry then Duke Energy won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Duke Energy competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Duke Energy? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Duke Energy 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. Duke Energy 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 Duke Energy
What is a Organization for Duke Energy? Defining Organization in VRIO
Even if the Duke Energy 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 Duke Energy 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 |
---|---|---|---|---|---|
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 Duke Energy - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Duke Energy 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 |
Track Record of Leadership Team at Duke Energy | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – Duke Energy retail strategy | Yes, Duke Energy has strong relationship with retailers and wholesalers | Yes, Duke Energy has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Global and Local Presence of Duke Energy | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Duke Energy but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Supply Chain Network Flexibility of Duke Energy | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Duke Energy organizational structure and capabilities | Keeps the business running |
Alignment of Activities with Duke Energy Corporate Strategy | Yes | No | Each of the firm has its own strategy | Yes, company has organizational skills to extract the maximum out of it. | Still lots of potential to build on it |
Financial Resources of Duke Energy | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Duke Energy has reasonably sound financial position | Duke Energy has relatively sustainable Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Duke Energy | Yes, it is valuable in the industry given the various segmentations & consumer preferences. | Most of the competitors are trying to enter the lucrative segments | Can be imitated by the competitors | The firm has used it to good effect, details can be found in case exhibit | Provide short term competitive advantage but requires constant innovation to sustain |
Duke Energy 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 Duke Energy | Duke Energy is leveraging the customer loyalty to good effect | Provide Duke Energy medium term competitive advantage |
Opportunities in the Adjacent Industries that Duke Energy 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 |
Brand Positioning of Duke Energy 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Duke Energy in delivering lower costs | No | Can be imitated by competitors of Duke Energy but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Access to Cheap Capital for Duke Energy | Yes, as a leading player in the industry and current macro economic conditions, Duke Energy has access to cheap capital | No | Can be imitated by the competitors of Duke Energy | Not been totally exploited | Not significant in creating competitive advantage |
Duke Energy 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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