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Gazprom 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 Gazprom to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Gazprom? Defining Valuable in VRIO
A resource or capability is considered valuable for Gazprom , if it allows the
Gazprom to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Gazprom to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Gazprom.
What are Rare Resources for Gazprom? Defining Rare in VRIO
In an industry that Gazprom operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Gazprom require rare resources to compete in the industry. If Gazprom don’t have rare resources that are required to succeed in the industry then Gazprom won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Gazprom competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Gazprom? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Gazprom 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. Gazprom 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 Gazprom
What is a Organization for Gazprom? Defining Organization in VRIO
Even if the Gazprom 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 Gazprom 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 |
---|---|---|---|---|---|
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Gazprom to thwart competition | Yes, IPR and other rights are rare and competition of Gazprom 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 |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Gazprom operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Gazprom 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 |
Supply Chain Network Flexibility of Gazprom | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Gazprom organizational structure and capabilities | Keeps the business running |
Financial Resources of Gazprom | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Gazprom has reasonably sound financial position | Gazprom has relatively sustainable Competitive Advantage |
Opportunities in the E-Commerce Space for Gazprom - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Gazprom 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 |
Customer Community of Gazprom | Yes, as customers are co-creating products | Yes, the Gazprom has able to build a special relationship with its customers | It is very difficult for Gazprom competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Gazprom customers community ecosystem | Providing Strong Competitive Advantage |
Pricing Strategies of Gazprom | Yes, Gazprom has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Gazprom with a Temporary Competitive Advantage |
Gazprom 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 Gazprom | Gazprom is leveraging the customer loyalty to good effect | Provide Gazprom medium term competitive advantage |
Track Record of Leadership Team at Gazprom | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Brand awareness of Gazprom products and services | Yes, the brand awareness of Gazprom products are high | Yes, Gazprom has one of the leading brand in the industry | No | Gazprom has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Position among Retailers and Wholesalers – Gazprom retail strategy | Yes, Gazprom has strong relationship with retailers and wholesalers | Yes, Gazprom has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Gazprom | 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 |
Brand Positioning of Gazprom 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 |
Gazprom 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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