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VRIO FRAMEWORK ANALYSIS: A Case of Saudi Aramco: (CITATION Ala07 /L 1033) (CITATION Ara20 /L 1033)

Saudi Aramco is the world's leading oil exploration, refining, production, marketing and distribution company. It was founded in 1933 through an agreement between Saudi Arabia and SOCAL. Saudi Aramco produces 10 million barrels of crude oil per day. The VRIO framework is used to analyze a firm's competitiveness based on the resources it possesses. Saudi Aramco's key resources are oil and natural gas reserves, which are valuable, rare, inimitable, but the company must continue to improve access to these resources to maintain a competitive advantage over time.

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408 views

VRIO FRAMEWORK ANALYSIS: A Case of Saudi Aramco: (CITATION Ala07 /L 1033) (CITATION Ara20 /L 1033)

Saudi Aramco is the world's leading oil exploration, refining, production, marketing and distribution company. It was founded in 1933 through an agreement between Saudi Arabia and SOCAL. Saudi Aramco produces 10 million barrels of crude oil per day. The VRIO framework is used to analyze a firm's competitiveness based on the resources it possesses. Saudi Aramco's key resources are oil and natural gas reserves, which are valuable, rare, inimitable, but the company must continue to improve access to these resources to maintain a competitive advantage over time.

Uploaded by

SyedaShagufta
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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VRIO FRAMEWORK ANALYSIS: A case of Saudi Aramco

The beginning of Saudi Aramco is rooted back in 1933 when agreement was signed between

SOCAL and Saudi Arabia[ CITATION Ala07 \l 1033 ]. The work was started almost immediately to

drill and explore oil, the first success was achieved in 1938[ CITATION Ara20 \l 1033 ]. Saudi

Aramco is the world’s leading exploring, refining, producing, marketing and distributing

hydrocarbon company that produces 10 million bpd crude oil[ CITATION Ahm18 \l 1033 ]. To

analyse competitiveness of a firm, a resource-based view is preferred according to which VRIO

framework such as valuable, rare, imitable and organised resources add to the competitive

advantage. The resource-based view of Saudi Aramco reveals that natural resources are valuable

using which the company generates its income. It is also valuable because it is among the major

sources of energy. It is also valuable to industries and other private firms. The resources used in

Saudi Aramco are from nature such as gas and oil and they are also rare because they are non-

renewable. These resources are becoming rarer because the era of exploration has matured and it

has become more challenging. Due to this, the production rate is also being affected. These

resources are not imitable implying that there are no easy substitutes for these natural resources.

The role of these resources in energy generation will continue to play a critical role. Lastly, the

question of organised reveals that Saudi Aramco has managed to keep these organised. The

natural resources like gas and oil are valuable, inimitable and rare but they should be aligned and

organised to boost competitive advantage to a firm. In conclusion, the resource-based view

reveal that even if the resources of Saudi Aramco are rare, valuable and inimitable and it aims to

organise the resources, it is less likely that it gives competitive advantage to Aramco over

competitors in having better access to these resources. The natural resources like oil and has are

available for all the organisation aiming to explore, refine and distribute these resources. Saudi
Aramco must improve its access to these resources to avoid competitive disadvantage in the long

run.

References
Ahmed, J. U., Sultana, H., & Khan, M. (2018). Saudi Aramco: A Blend between Profit and Politics. FIB
Business Review, 7(2), 88-99.

Alali, B. (2007). Corporate Competitive Advantage Through Information Technology: Saudi Aramco Case.
Portland International Conference on Management of Engineering and Technology (PICMET).
IEEE.

Aramco.com. (2020). Our history: Driven by the curiosity to explore. Retrieved from Aramco:
https://www.aramco.com/en/who-we-are/overview/our-history

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