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NextEra 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 NextEra Energy to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for NextEra Energy? Defining Valuable in VRIO
A resource or capability is considered valuable for NextEra Energy , if it allows the
NextEra 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 NextEra Energy to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for NextEra Energy.
What are Rare Resources for NextEra Energy? Defining Rare in VRIO
In an industry that NextEra Energy operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. NextEra Energy require rare resources to compete in the industry. If NextEra Energy don’t have rare resources that are required to succeed in the industry then NextEra Energy won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide NextEra 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 NextEra Energy? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to NextEra 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. NextEra 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 NextEra Energy
What is a Organization for NextEra Energy? Defining Organization in VRIO
Even if the NextEra 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 NextEra 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 |
---|---|---|---|---|---|
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for NextEra Energy to thwart competition | Yes, IPR and other rights are rare and competition of NextEra Energy 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 |
Product Portfolio and Synergy among Various Product Lines of NextEra 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 |
Opportunities in the Adjacent Industries that NextEra 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 |
Position among Retailers and Wholesalers – NextEra Energy retail strategy | Yes, NextEra Energy has strong relationship with retailers and wholesalers | Yes, NextEra Energy has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Track Record of Leadership Team at NextEra Energy | Yes | Yes | Can't be imitated by competitors | Yes | 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 NextEra Energy operates in | No, none of the competitors so far has able to imitate this expertise | Yes, NextEra Energy is successful at it | Providing Strong Competitive Advantage |
Customer Community of NextEra Energy | Yes, as customers are co-creating products | Yes, the NextEra Energy has able to build a special relationship with its customers | It is very difficult for NextEra Energy competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on NextEra Energy customers community ecosystem | Providing Strong Competitive Advantage |
Access to Cheap Capital for NextEra Energy | Yes, as a leading player in the industry and current macro economic conditions, NextEra Energy has access to cheap capital | No | Can be imitated by the competitors of NextEra Energy | Not been totally exploited | Not significant in creating competitive advantage |
Ability to Attract Talent in Various Local & Global Markets | Yes, NextEra Energy 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 NextEra Energy | To a large extent yes | Providing Strong Competitive Advantage |
Brand awareness of NextEra Energy products and services | Yes, the brand awareness of NextEra Energy products are high | Yes, NextEra Energy has one of the leading brand in the industry | No | NextEra Energy has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of NextEra Energy | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Opportunities for Brand Extensions for NextEra Energy 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 |
Financial Resources of NextEra Energy | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | NextEra Energy has reasonably sound financial position | NextEra Energy has relatively sustainable Competitive Advantage |
NextEra 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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