Professional Documents
Culture Documents
The VRIO Framework
The VRIO Framework
Amie Kusumawardhani
Core Competencies
Valuable
Valuable Rare
Rare
Core
Core
Competencies
Competencies
Nonsubstitutable
Nonsubstitutable Costly
Costlyto
toImitate
Imitate
How Resources and Capabilities Provide
Competitive Advantage
1) Tangible resources
2) Intangible resources
3) Organizational capabilities
Tangible Resources
Firm’s cash and cash equivalents
Financial Firm’s capacity to raise equity
Firm’s borrowing capacity
Trade secrets
Technological Innovative production processes
Patents, copyrights, trademarks
Examples
Above Normal
Temporary (at least for
Yes Yes No No Advantage some amount of
time)
A
No No No No Disadvanta Below
ge Normal
B
Parity
Yes No No No (equality) Normal
C
Above
Normal
Yes Yes No No Temporary (at least
Advantage for some
amount of
time)
D
Yes Yes Yes Yes Sustained Above
Advantage Normal
Organized properly
When a firm sustains profits that exceed the average for its
industry, the firm is said to possess a competitive advantage
over its rivals. The goal of much of business strategy is to
achieve a sustainable competitive advantage.
Resources
Capabilities
Resources