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Kia Motors 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 Kia Motors to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Kia Motors? Defining Valuable in VRIO
A resource or capability is considered valuable for Kia Motors , if it allows the
Kia Motors to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Kia Motors to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Kia Motors.
What are Rare Resources for Kia Motors? Defining Rare in VRIO
In an industry that Kia Motors operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Kia Motors require rare resources to compete in the industry. If Kia Motors don’t have rare resources that are required to succeed in the industry then Kia Motors won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Kia Motors competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Kia Motors? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Kia Motors 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. Kia Motors 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 Kia Motors
What is a Organization for Kia Motors? Defining Organization in VRIO
Even if the Kia Motors 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 Kia Motors 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 |
---|---|---|---|---|---|
Kia Motors 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 Kia Motors | Kia Motors is leveraging the customer loyalty to good effect | Provide Kia Motors medium term competitive advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Opportunities for Brand Extensions for Kia Motors 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 Kia Motors 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 |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Kia Motors dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Global and Local Presence of Kia Motors | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Kia Motors but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Kia Motors to thwart competition | Yes, IPR and other rights are rare and competition of Kia Motors 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 |
Marketing Expertise within Kia Motors | 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 Kia Motors are often matched by competitors | Yes, Kia Motors is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Brand awareness of Kia Motors products and services | Yes, the brand awareness of Kia Motors products are high | Yes, Kia Motors has one of the leading brand in the industry | No | Kia Motors has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Brand Positioning of Kia Motors 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 |
Pricing Strategies of Kia Motors | Yes, Kia Motors has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Kia Motors with a 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 Kia Motors operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Kia Motors is successful at it | Providing Strong Competitive Advantage |
Customer Community of Kia Motors | Yes, as customers are co-creating products | Yes, the Kia Motors has able to build a special relationship with its customers | It is very difficult for Kia Motors competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Kia Motors customers community ecosystem | Providing Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Kia Motors in delivering lower costs | No | Can be imitated by competitors of Kia Motors but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Kia Motors 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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