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Kinder Morgan 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 Kinder Morgan to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Kinder Morgan? Defining Valuable in VRIO
A resource or capability is considered valuable for Kinder Morgan , if it allows the
Kinder Morgan to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Kinder Morgan to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Kinder Morgan.
What are Rare Resources for Kinder Morgan? Defining Rare in VRIO
In an industry that Kinder Morgan operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Kinder Morgan require rare resources to compete in the industry. If Kinder Morgan don’t have rare resources that are required to succeed in the industry then Kinder Morgan won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Kinder Morgan competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Kinder Morgan? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Kinder Morgan 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. Kinder Morgan 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 Kinder Morgan
What is a Organization for Kinder Morgan? Defining Organization in VRIO
Even if the Kinder Morgan 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 Kinder Morgan 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 |
---|---|---|---|---|---|
Opportunities for Brand Extensions for Kinder Morgan 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 |
Marketing Expertise within Kinder Morgan | 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 Kinder Morgan are often matched by competitors | Yes, Kinder Morgan is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Kinder Morgan in delivering lower costs | No | Can be imitated by competitors of Kinder Morgan but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Customer Community of Kinder Morgan | Yes, as customers are co-creating products | Yes, the Kinder Morgan has able to build a special relationship with its customers | It is very difficult for Kinder Morgan competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Kinder Morgan customers community ecosystem | Providing Strong Competitive Advantage |
Access to Cheap Capital for Kinder Morgan | Yes, as a leading player in the industry and current macro economic conditions, Kinder Morgan has access to cheap capital | No | Can be imitated by the competitors of Kinder Morgan | Not been totally exploited | Not significant in creating competitive advantage |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Kinder Morgan operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Kinder Morgan is successful at it | Providing Strong Competitive Advantage |
Alignment of Activities with Kinder Morgan Corporate Strategy | Yes | No | Each of the firm has its own strategy | Yes, company has organizational skills to extract the maximum out of it. | Still lots of potential to build on it |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Financial Resources of Kinder Morgan | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Kinder Morgan has reasonably sound financial position | Kinder Morgan has relatively sustainable Competitive Advantage |
Track Record of Leadership Team at Kinder Morgan | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Pricing Strategies of Kinder Morgan | Yes, Kinder Morgan has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Kinder Morgan with a Temporary Competitive Advantage |
Successful Implementation of Digital Strategy at Kinder Morgan | Yes, without a comprehensive digital strategy it is extremely difficult to compete | No, as most of the firms are investing into digitalizing operations | Can be imitated by competitors | One of the leading player in the industry | Digital strategy has become critical in the industry but it can't provide sustainable competitive advantage to |
Global and Local Presence of Kinder Morgan | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Kinder Morgan but at a relatively high cost | Yes, it is one of the most diversified companies in its industry | Providing Strong Competitive Advantage |
Product Portfolio and Synergy among Various Product Lines of Kinder Morgan | 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 |
Kinder Morgan 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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