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Devon 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 Devon Energy to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Devon Energy? Defining Valuable in VRIO
A resource or capability is considered valuable for Devon Energy , if it allows the
Devon 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 Devon Energy to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Devon Energy.
What are Rare Resources for Devon Energy? Defining Rare in VRIO
In an industry that Devon Energy operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Devon Energy require rare resources to compete in the industry. If Devon Energy don’t have rare resources that are required to succeed in the industry then Devon Energy won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Devon 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 Devon Energy? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Devon 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. Devon 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 Devon Energy
What is a Organization for Devon Energy? Defining Organization in VRIO
Even if the Devon 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 Devon 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 |
---|---|---|---|---|---|
Ability to Attract Talent in Various Local & Global Markets | Yes, Devon 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 Devon Energy | To a large extent yes | Providing Strong Competitive Advantage |
Access to Cheap Capital for Devon Energy | Yes, as a leading player in the industry and current macro economic conditions, Devon Energy has access to cheap capital | No | Can be imitated by the competitors of Devon Energy | Not been totally exploited | Not significant in creating competitive advantage |
Position among Retailers and Wholesalers – Devon Energy retail strategy | Yes, Devon Energy has strong relationship with retailers and wholesalers | Yes, Devon Energy 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 Devon 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 |
Successful Implementation of Digital Strategy at Devon Energy | 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 |
Supply Chain Network Flexibility of Devon Energy | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Devon Energy organizational structure and capabilities | Keeps the business running |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Marketing Expertise within Devon Energy | 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 Devon Energy are often matched by competitors | Yes, Devon Energy is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Pricing Strategies of Devon Energy | Yes, Devon Energy has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide Devon Energy with a Temporary Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Devon Energy to thwart competition | Yes, IPR and other rights are rare and competition of Devon 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 |
Opportunities for Brand Extensions for Devon 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 |
Opportunities in the E-Commerce Space for Devon Energy - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Devon Energy 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 |
Brand awareness of Devon Energy products and services | Yes, the brand awareness of Devon Energy products are high | Yes, Devon Energy has one of the leading brand in the industry | No | Devon Energy has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Devon Energy operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Devon Energy is successful at it | Providing Strong Competitive Advantage |
Devon 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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