Essay on V.R.I.O. Analysis

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A FRAMEWORK FOR ANALYSIS : VRIO • Resource-based analysis of the firm determines which resources and capabilities result in which strengths or weaknesses • Strategies are to be implemented which exploit (or build) strengths and avoid (or eliminate) weaknesses • What constitutes a strength or weakness is partially a function of the external environment • Framework for analysis: VRIO - resources and capabilities should be o Valuable o Rare o Inimitable o Organization can effectively exploit them VALUE of resources and capabilities • A VALUABLE resource or capability (or a combination thereof) must o Contribute to fulfillment of customer's needs o At a price the consumer is willing to pay, which is determined by …show more content…
Montgomery, "Resources: The essence of Corporate Advantage", Harvard Business School Case N1-792-064. • Cannot be imitated : Patents, unique assets, unique locations • Difficult to imitate : Brand loyalty, employee satisfaction, reputation for fairness • Can be imitated (but may not be) Capacity

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