National Oilwell Varco 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 National Oilwell Varco to do better resource allocation and build a defensible value and supply chain.

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What is a Valuable Resource for National Oilwell Varco? Defining Valuable in VRIO

A resource or capability is considered valuable for National Oilwell Varco , if it allows the National Oilwell Varco to exploit opportunities or negate threats emerging out of both the micro business environment and the macro environment. If a resource does not allow National Oilwell Varco to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for National Oilwell Varco.

What are Rare Resources for National Oilwell Varco? Defining Rare in VRIO

In an industry that National Oilwell Varco operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. National Oilwell Varco require rare resources to compete in the industry. If National Oilwell Varco don’t have rare resources that are required to succeed in the industry then National Oilwell Varco won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide National Oilwell Varco competitive advantage against players that don’t have those rare resources. HBR Case Study Solution

What is a Inimitable (Difficult to Immitate) Resource for National Oilwell Varco? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to National Oilwell Varco 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. National Oilwell Varco 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 National Oilwell Varco

What is a Organization for National Oilwell Varco? Defining Organization in VRIO

Even if the National Oilwell Varco 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 National Oilwell Varco 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
Access to Cheap Capital for National Oilwell Varco	Yes, as a leading player in the industry and current macro economic conditions, National Oilwell Varco has access to cheap capital	No	Can be imitated by the competitors of National Oilwell Varco	Not been totally exploited	Not significant in creating competitive advantage
Track Record of Leadership Team at National Oilwell Varco	Yes	Yes	Can't be imitated by competitors	Yes	Providing Strong Competitive Advantage
Intellectual Property Rights, Copyrights, and Trademarks	Yes, they are extremely valuable for National Oilwell Varco to thwart competition	Yes, IPR and other rights are rare and competition of National Oilwell Varco 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
Financial Resources of National Oilwell Varco	Yes	No	Financial instruments and market liquidity are available to all the nearest competitors	National Oilwell Varco has reasonably sound financial position	National Oilwell Varco has relatively sustainable Competitive Advantage
Ability to Attract Talent in Various Local & Global Markets	Yes, National Oilwell Varco 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 National Oilwell Varco	To a large extent yes	Providing Strong Competitive Advantage
Distribution and Logistics Costs Competitiveness	Yes, as it helps National Oilwell Varco in delivering lower costs	No	Can be imitated by competitors of National Oilwell Varco but it is difficult	Yes	Medium to Long Term Competitive Advantage
Customer Community of National Oilwell Varco	Yes, as customers are co-creating products	Yes, the National Oilwell Varco has able to build a special relationship with its customers	It is very difficult for National Oilwell Varco competitors to imitate the culture and community dedication	Going by the data, there is still a lot of upside in building on National Oilwell Varco customers community ecosystem	Providing Strong Competitive Advantage
Opportunities in the E-Commerce Space for National Oilwell Varco - using Present IT Capabilities	Yes, the e-commerce space is rapidly growing and National Oilwell Varco 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
Sales Force and Channel Management of National Oilwell Varco	Yes	No	Can be imitated by competitors	Still there is lot of potential to utilize the excellent sales force	Can provide National Oilwell Varco sustainable competitive advantage. Potential is certainly there.
Talent to Manage Regulatory and Legal Obligations	Yes	No	Can be imitated by competitors	Yes	Not critical factor
Global and Local Presence of National Oilwell Varco	Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles	Yes	Can be imitated by competitors of National Oilwell Varco 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 National Oilwell Varco 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
Marketing Expertise within National Oilwell Varco	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 National Oilwell Varco are often matched by competitors	Yes, National Oilwell Varco is leveraging both its inhouse marketing department and external expertise	Temporary Competitive Advantage
National Oilwell Varco 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 National Oilwell Varco	National Oilwell Varco is leveraging the customer loyalty to good effect	Provide National Oilwell Varco medium term competitive advantage

National Oilwell Varco SWOT Analysis, SWOT Matrix, Weighted SWOT Case Study Solution & Analysis

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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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