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Alon USA 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 Alon USA Energy to do better resource allocation and build a defensible value and supply chain.
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What is a Valuable Resource for Alon USA Energy? Defining Valuable in VRIO
A resource or capability is considered valuable for Alon USA Energy , if it allows the
Alon USA 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 Alon USA Energy to minimize threats or exploit opportunities, than it doesn't contribute signficantly to building a sustainable competitive advantage for Alon USA Energy.
What are Rare Resources for Alon USA Energy? Defining Rare in VRIO
In an industry that Alon USA Energy operates in, valuable resources are held by number of competitors. So valuable resources themselves don’t provide a sustainable competitive advantage. Alon USA Energy require rare resources to compete in the industry. If Alon USA Energy don’t have rare resources that are required to succeed in the industry then Alon USA Energy won’t be able to compete successfully in the marketplace. Secondly holding rare resources can provide Alon USA 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 Alon USA Energy? Defining Inimitable in VRIO
A valuable and rare resource can provide a competitive advantage to Alon USA 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. Alon USA 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 Alon USA Energy
What is a Organization for Alon USA Energy? Defining Organization in VRIO
Even if the Alon USA 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 Alon USA 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 |
---|---|---|---|---|---|
Alignment of Activities with Alon USA 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 |
Supply Chain Network Flexibility of Alon USA Energy | Yes | Yes | Near competitors also have flexible supply chain and share some of the suppliers | Fully utilized by Alon USA Energy organizational structure and capabilities | Keeps the business running |
Vision of the Leadership for Next Set of Challenges | Yes | No | Can't be imitated by competitors of Alon USA Energy | Not based on information provided in the case | Can Lead to Strong Competitive Advantage |
Opportunities in the Adjacent Industries that Alon USA Energy 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 |
Track Record of Project Execution | Yes, especially in an industry where there are frequent cost overun | Yes, especially in the segment that Alon USA Energy operates in | No, none of the competitors so far has able to imitate this expertise | Yes, Alon USA Energy is successful at it | Providing Strong Competitive Advantage |
Access to Cheap Capital for Alon USA Energy | Yes, as a leading player in the industry and current macro economic conditions, Alon USA Energy has access to cheap capital | No | Can be imitated by the competitors of Alon USA Energy | Not been totally exploited | Not significant in creating competitive advantage |
Financial Resources of Alon USA Energy | Yes | No | Financial instruments and market liquidity are available to all the nearest competitors | Alon USA Energy has reasonably sound financial position | Alon USA Energy has relatively sustainable Competitive Advantage |
Position among Retailers and Wholesalers – Alon USA Energy retail strategy | Yes, Alon USA Energy has strong relationship with retailers and wholesalers | Yes, Alon USA Energy has dedicated channel partners | Difficult to imitate though not impossible | Yes, over the years company has used it successfully | Sustainable Competitive Advantage |
Alon USA 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 Alon USA Energy | Alon USA Energy is leveraging the customer loyalty to good effect | Provide Alon USA Energy medium term competitive advantage |
Talent to Manage Regulatory and Legal Obligations | Yes | No | Can be imitated by competitors | Yes | Not critical factor |
Access to Critical Raw Material for Successful Execution | Yes | Yes, as other competitors have to come to terms with Alon USA Energy dominant market position | Can be imitated by competitors | Yes | Providing Sustainable Competitive Advantage |
Marketing Expertise within Alon USA 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 Alon USA Energy are often matched by competitors | Yes, Alon USA Energy is leveraging both its inhouse marketing department and external expertise | Temporary Competitive Advantage |
Sales Force and Channel Management of Alon USA Energy | Yes | No | Can be imitated by competitors | Still there is lot of potential to utilize the excellent sales force | Can provide Alon USA Energy sustainable competitive advantage. Potential is certainly there. |
Opportunities in the E-Commerce Space for Alon USA Energy - using Present IT Capabilities | Yes, the e-commerce space is rapidly growing and Alon USA 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 |
Alon USA 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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