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Exxon 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 Exxon to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Exxon? Defining Valuable in VRIO
A resource or capability is considered valuable for Exxon , if it allows the
Exxon to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Exxon to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Exxon.
What are Rare Resources for Exxon? Defining Rare in VRIO
In an industry that Exxon operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Exxon require rare resources to compete in the industry. If Exxon don’t have rare resources that are required to succeed in the industry then Exxon won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Exxon competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Exxon? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Exxon 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. Exxon 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 Exxon
What is a Organization for Exxon? Defining Organization in VRIO
Even if the Exxon 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 Exxon 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 |
---|---|---|---|---|---|
Distribution and Logistics Costs Competitiveness | Yes, as it helps Exxon in delivering lower costs | No | Can be imitated by competitors of Exxon 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 Exxon dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Global and Local Presence of Exxon | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Exxon but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Brand Positioning of Exxon 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 |
Brand awareness of Exxon products and services | Yes, the brand awareness of Exxon products are high | Yes, Exxon has one of the leading brand in the industry | No | Exxon has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Exxon | 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 |
Opportunities in the Adjacent Industries that Exxon 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 |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Access to Cheap Capital for Exxon | Yes, as a leading player in the industry and current macro economic conditions, Exxon has access to cheap capital | No | Can be imitated by the competitors of Exxon | Not been totally exploited | Not significant in creating competitive advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Exxon to thwart competition | Yes, IPR and other rights are rare and competition of Exxon 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 |
Customer Community of Exxon | Yes, as customers are co-creating products | Yes, the Exxon has able to build a special relationship with its customers | It is very difficult for Exxon competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Exxon customers community ecosystem | Providing Strong Competitive Advantage |
Marketing Expertise within Exxon | 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 Exxon are often matched by competitors | Yes, Exxon is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, Exxon strategy is built on successful innovation and localization of products | Yes, as talent is critical to firm's growth | Difficult to imitate for the current competitors of Exxon | To a large extent yes | Providing Strong Competitive Advantage |
Track Record of Leadership Team at Exxon | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Exxon 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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