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Targa Resources 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 Targa Resources to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Targa Resources? Defining Valuable in VRIO
A resource or capability is considered valuable for Targa Resources , if it allows the
Targa Resources to exploit opportunities or negate threats
emerging out of both the micro business environment and the macro environment. If a resource does not allow Targa Resources to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Targa Resources.
What are Rare Resources for Targa Resources? Defining Rare in VRIO
In an industry that Targa Resources operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Targa Resources require rare resources to compete in the industry. If Targa Resources don’t have rare resources that are required to succeed in the industry then Targa Resources won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Targa Resources competitive advantage against players that don’t have those rare resources. HBR Case Study Solution
What is a Inimitable (Difficult to Immitate) Resource for Targa Resources? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Targa Resources 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. Targa Resources 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 Targa Resources
What is a Organization for Targa Resources? Defining Organization in VRIO
Even if the Targa Resources 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 Targa Resources 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 in the E-Commerce Space for Targa Resources - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Targa Resources 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 |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Targa Resources | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Position among Retailers and Wholesalers – Targa Resources retail strategy | Yes, Targa Resources has strong relationship with retailers and wholesalers | Yes, Targa Resources 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 Targa Resources dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Global and Local Presence of Targa Resources | Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles | Yes | Can be imitated by competitors of Targa Resources 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 Targa Resources | 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 |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Targa Resources in delivering lower costs | No | Can be imitated by competitors of Targa Resources but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Supply Chain Network Flexibility of Targa Resources | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Targa Resources organizational structure and capabilities | Keeps the business running |
Access to Cheap Capital for Targa Resources | Yes, as a leading player in the industry and current macro economic conditions, Targa Resources has access to cheap capital | No | Can be imitated by the competitors of Targa Resources | Not been totally exploited | Not significant in creating competitive advantage |
Opportunities in the Adjacent Industries that Targa Resources 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 |
Alignment of Activities with Targa Resources 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 |
Sales Force and Channel Management of Targa Resources | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Targa Resources sustainable competitive advantage. Potential is certainly there. |
Ability to Attract Talent in Various Local & Global Markets | Yes, Targa Resources 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 Targa Resources | To a large extent yes | Providing Strong Competitive Advantage |
Intellectual Property Rights, Copyrights, and Trademarks | Yes, they are extremely valuable for Targa Resources to thwart competition | Yes, IPR and other rights are rare and competition of Targa Resources 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 |
Targa Resources 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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