Kansas City Southern 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 Kansas City Southern to do better resource allocation and build a defensible value and supply chain.

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What is a Valuable Resource for Kansas City Southern? Defining Valuable in VRIO

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

What are Rare Resources for Kansas City Southern? Defining Rare in VRIO

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

What is a Inimitable (Difficult to Immitate) Resource for Kansas City Southern? Defining Inimitable in VRIO

A valuable and rare resource can provide a competitive advantage to Kansas City Southern 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. Kansas City Southern 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 Kansas City Southern

What is a Organization for Kansas City Southern? Defining Organization in VRIO

Even if the Kansas City Southern 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 Kansas City Southern 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
Pricing Strategies of Kansas City Southern	Yes, Kansas City Southern has sound pricing strategies	No	Pricing strategies are regularly imitated in the industry	Yes, firm has a pricing analytics engine	It can only provide Kansas City Southern with a Temporary Competitive Advantage
Track Record of Leadership Team at Kansas City Southern	Yes	Yes	Can't be imitated by competitors	Yes	Providing Strong Competitive Advantage
Ability to Attract Talent in Various Local & Global Markets	Yes, Kansas City Southern 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 Kansas City Southern	To a large extent yes	Providing Strong Competitive Advantage
Alignment of Activities with Kansas City Southern 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
Track Record of Project Execution	Yes, especially in an industry where there are frequent cost overun	Yes, especially in the segment that Kansas City Southern operates in	No, none of the competitors so far has able to imitate this expertise	Yes, Kansas City Southern is successful at it	Providing Strong Competitive Advantage
Sales Force and Channel Management of Kansas City Southern	Yes	No	Can be imitated by competitors	Still there is lot of potential to utilize the excellent sales force	Can provide Kansas City Southern sustainable competitive advantage. Potential is certainly there.
Supply Chain Network Flexibility of Kansas City Southern	Yes	Yes	Near competitors also have flexible supply chain and share some of the suppliers	Fully utilized by Kansas City Southern organizational structure and capabilities	Keeps the business running
Access to Cheap Capital for Kansas City Southern	Yes, as a leading player in the industry and current macro economic conditions, Kansas City Southern has access to cheap capital	No	Can be imitated by the competitors of Kansas City Southern	Not been totally exploited	Not significant in creating competitive advantage
Brand awareness of Kansas City Southern products and services	Yes, the brand awareness of Kansas City Southern products are high	Yes, Kansas City Southern has one of the leading brand in the industry	No	Kansas City Southern has utilized its leading brand position in various segments	Sustainable Competitive Advantage
Financial Resources of Kansas City Southern	Yes	No	Financial instruments and market liquidity are available to all the nearest competitors	Kansas City Southern has reasonably sound financial position	Kansas City Southern has relatively sustainable Competitive Advantage
Vision of the Leadership for Next Set of Challenges	Yes	No	Can't be imitated by competitors of Kansas City Southern	Not based on information provided in the case	Can Lead to Strong Competitive Advantage
Kansas City Southern 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 Kansas City Southern	Kansas City Southern is leveraging the customer loyalty to good effect	Provide Kansas City Southern medium term competitive advantage
Opportunities for Brand Extensions for Kansas City Southern 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
Talent to Manage Regulatory and Legal Obligations	Yes	No	Can be imitated by competitors	Yes	Not critical factor

Kansas City Southern 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