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Spectra 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 Spectra Energy to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Spectra Energy? Defining Valuable in VRIO
A resource or capability is considered valuable for Spectra Energy , if it allows the
Spectra 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 Spectra Energy to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Spectra Energy.
What are Rare Resources for Spectra Energy? Defining Rare in VRIO
In an industry that Spectra Energy operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Spectra Energy require rare resources to compete in the industry. If Spectra Energy don’t have rare resources that are required to succeed in the industry then Spectra Energy won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Spectra 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 Spectra Energy? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Spectra 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. Spectra 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 Spectra Energy
What is a Organization for Spectra Energy? Defining Organization in VRIO
Even if the Spectra 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 Spectra 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, Spectra 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 Spectra Energy | To a large extent yes | Providing Strong Competitive Advantage |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Spectra Energy | Not based on information provided in the case | Can Lead to 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 Spectra Energy operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Spectra Energy is successful at it | Providing Strong Competitive Advantage |
Distribution and Logistics Costs Competitiveness | Yes, as it helps Spectra Energy in delivering lower costs | No | Can be imitated by competitors of Spectra Energy but it is difficult | Yes | Medium to Long Term Competitive Advantage |
Supply Chain Network Flexibility of Spectra Energy | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Spectra Energy organizational structure and capabilities | Keeps the business running |
Opportunities in the E-Commerce Space for Spectra Energy - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Spectra 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 |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Spectra Energy dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Brand awareness of Spectra Energy products and services | Yes, the brand awareness of Spectra Energy products are high | Yes, Spectra Energy has one of the leading brand in the industry | No | Spectra Energy has utilized its leading brand position in various segments | Sustainable Competitive Advantage |
Spectra Energy 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 Spectra Energy | Spectra Energy is leveraging the customer loyalty to good effect | Provide Spectra Energy medium term competitive advantage |
Customer Community of Spectra Energy | Yes, as customers are co-creating products | Yes, the Spectra Energy has able to build a special relationship with its customers | It is very difficult for Spectra Energy competitors to imitate the culture and community dedication | Going by the data, there is still a lot of upside in building on Spectra Energy customers community ecosystem | Providing Strong Competitive Advantage |
Successful Implementation of Digital Strategy at Spectra 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 |
Sales Force and Channel Management of Spectra Energy | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Spectra Energy sustainable competitive advantage. Potential is certainly there. |
Marketing Expertise within Spectra 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 Spectra Energy are often matched by competitors | Yes, Spectra Energy is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Alignment of Activities with Spectra Energy 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 |
Spectra 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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