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KKR 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 KKR to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for KKR? Defining Valuable in VRIO
A resource or capability is considered valuable for KKR , if it allows the
KKR to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow KKR to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for KKR.
What are Rare Resources for KKR? Defining Rare in VRIO
In an industry that KKR operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. KKR require rare resources to compete in the industry. If KKR don’t have rare resources that are required to succeed in the industry then KKR won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide KKR competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for KKR? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to KKR 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. KKR 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 KKR
What is a Organization for KKR? Defining Organization in VRIO
Even if the KKR 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 KKR 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 |
---|---|---|---|---|---|
Track Record of Leadership Team at KKR | Yes | Yes | Can't be imitated by competitors | Yes | Providing Strong Competitive Advantage |
Position among Retailers and Wholesalers – KKR retail strategy | Yes, KKR has strong relationship with retailers and wholesalers | Yes, KKR has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with KKR dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
KKR 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 KKR | KKR is leveraging the customer loyalty to good effect | Provide KKR medium term competitive advantage |
Financial Resources of KKR | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | KKR has reasonably sound financial position | KKR has relatively sustainable Competitive Advantage |
Sales Force and Channel Management of KKR | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide KKR sustainable competitive advantage. Potential is certainly there. |
Distribution and Logistics Costs Competitiveness | Yes, as it helps KKR in delivering lower costs | No | Can be imitated by competitors of KKR but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Brand awareness of KKR products and services | Yes, the brand awareness of KKR products are high | Yes, KKR has one of the leading brand in the industry | No | KKR has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Opportunities for Brand Extensions for KKR 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 |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for KKR to thwart competition | Yes, IPR and other rights are rare and competition of KKR 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 |
Ability to Attract Talent in Various Local & Global Markets | Yes, KKR 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 KKR | To a large extent yes | Providing Strong Competitive Advantage |
Supply Chain Network Flexibility of KKR | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by KKR organizational structure and capabilities | Keeps the business running |
Pricing Strategies of KKR | Yes, KKR has sound pricing strategies | No | Pricing strategies are regularly imitated in the industry | Yes, firm has a pricing analytics engine | It can only provide KKR with a Temporary Competitive Advantage |
Brand Positioning of KKR 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 |
KKR 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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