Occidental Petroleum 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 Occidental Petroleum to do better resource allocation and build a defensible value and supply chain.

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What is a Valuable Resource for Occidental Petroleum? Defining Valuable in VRIO

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

What are Rare Resources for Occidental Petroleum? Defining Rare in VRIO

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

What is a Inimitable (Difficult to Immitate) Resource for Occidental Petroleum? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to Occidental Petroleum 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. Occidental Petroleum 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 Occidental Petroleum

What is a Organization for Occidental Petroleum? Defining Organization in VRIO

Even if the Occidental Petroleum 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 Occidental Petroleum 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
Position among Retailers and Wholesalers – Occidental Petroleum retail strategy	Yes, Occidental Petroleum has strong relationship with retailers and wholesalers	Yes, Occidental Petroleum has dedicated channel partners	Difficult to imitate though not impossible	Yes, over the years company has used it successfully	Sustainable Competitive Advantage
Global and Local Presence of Occidental Petroleum	Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles	Yes	Can be imitated by competitors of Occidental Petroleum but at a relatively high cost	Yes, it is one of the most diversified companies in its industry	Providing Strong Competitive Advantage
Distribution and Logistics Costs Competitiveness	Yes, as it helps Occidental Petroleum in delivering lower costs	No	Can be imitated by competitors of Occidental Petroleum but it is difficult	Yes	Medium to Long Term Competitive Advantage
Customer Community of Occidental Petroleum	Yes, as customers are co-creating products	Yes, the Occidental Petroleum has able to build a special relationship with its customers	It is very difficult for Occidental Petroleum competitors to imitate the culture and community dedication	Going by the data, there is still a lot of upside in building on Occidental Petroleum customers community ecosystem	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 Occidental Petroleum operates in	No, none of the competitors so far has able to imitate this expertise	Yes, Occidental Petroleum is successful at it	Providing Strong Competitive Advantage
Supply Chain Network Flexibility of Occidental Petroleum	Yes	Yes	Near competitors also have flexible supply chain and share some of the suppliers	Fully utilized by Occidental Petroleum organizational structure and capabilities	Keeps the business running
Opportunities in the Adjacent Industries that Occidental Petroleum 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
Access to Critical Raw Material for Successful Execution	Yes	Yes, as other competitors have to come to terms with Occidental Petroleum dominant market position	Can be imitated by competitors	Yes	Providing Sustainable Competitive Advantage
Access to Cheap Capital for Occidental Petroleum	Yes, as a leading player in the industry and current macro economic conditions, Occidental Petroleum has access to cheap capital	No	Can be imitated by the competitors of Occidental Petroleum	Not been totally exploited	Not significant in creating competitive advantage
Successful Implementation of Digital Strategy at Occidental Petroleum	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
Brand Positioning of Occidental Petroleum 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
Vision of the Leadership for Next Set of Challenges	Yes	No	Can't be imitated by competitors of Occidental Petroleum	Not based on information provided in the case	Can Lead to Strong Competitive Advantage
Product Portfolio and Synergy among Various Product Lines of Occidental Petroleum	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
Talent to Manage Regulatory and Legal Obligations	Yes	No	Can be imitated by competitors	Yes	Not critical factor

Occidental Petroleum 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