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Plains GP Holdings 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 Plains GP Holdings to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Plains GP Holdings? Defining Valuable in VRIO
A resource or capability is considered valuable for Plains GP Holdings , if it allows the
Plains GP Holdings to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Plains GP Holdings to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Plains GP Holdings.
What are Rare Resources for Plains GP Holdings? Defining Rare in VRIO
In an industry that Plains GP Holdings operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Plains GP Holdings require rare resources to compete in the industry. If Plains GP Holdings don’t have rare resources that are required to succeed in the industry then Plains GP Holdings won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Plains GP Holdings competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Plains GP Holdings? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Plains GP Holdings 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. Plains GP Holdings 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 Plains GP Holdings
What is a Organization for Plains GP Holdings? Defining Organization in VRIO
Even if the Plains GP Holdings 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 Plains GP Holdings 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 |
---|---|---|---|---|---|
Customer Community of Plains GP Holdings | Yes, as customers are co-creating products | Yes, the Plains GP Holdings has able to build a special relationship with its customers | It is very difficult for Plains GP Holdings competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Plains GP Holdings customers community ecosystem | Providing Strong Competitive Advantage |
Brand Positioning of Plains GP Holdings 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 |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Plains GP Holdings operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Plains GP Holdings is successful at it | Providing Strong Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Plains GP Holdings to thwart competition | Yes, IPR and other rights are rare and competition of Plains GP Holdings 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 awareness of Plains GP Holdings products and services | Yes, the brand awareness of Plains GP Holdings products are high | Yes, Plains GP Holdings has one of the leading brand in the industry | No | Plains GP Holdings has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Marketing Expertise within Plains GP Holdings | 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 Plains GP Holdings are often matched by competitors | Yes, Plains GP Holdings is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Plains GP Holdings | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Plains GP Holdings in delivering lower costs | No | Can be imitated by competitors of Plains GP Holdings but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Plains GP Holdings dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Position among Retailers and Wholesalers – Plains GP Holdings retail strategy | Yes, Plains GP Holdings has strong relationship with retailers and wholesalers | Yes, Plains GP Holdings has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Opportunities for Brand Extensions for Plains GP Holdings products | Yes, new niches are emerging in the market | No, as most of the competitors are also targeting those niches | Yes can be imitated by the competitors | Brand extensions will require higher marketing budget | Temporary Competitive Advantage |
Opportunities in the Adjacent Industries that Plains GP Holdings 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 |
Track Record of Leadership Team at Plains GP Holdings | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Plains GP Holdings 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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