Most companies are always striving to find a competitive advantage that will boost them against other competitors. But even when competitive advantage is creat, oversaturat markets and technological advances give competitors little time to replicate this competitive advantage. Here, the VRIO analysis could function as a performance map. In this post we tell you what it is and how to do a VRIO analysis Do not miss it.
Origin Of Vrio Analysis
In order to understand the sources of competitive advantage , companies are using many tools to analyze their external ( Porter’s 5 Forces , PEST analysis) and internal (Value Chain Analysis, SWOT Analysis , CAME Analysis , Matrix Analysis) environments. BCG , Plague Analysis ).
One such tool that analyzes the internal resources of the company is the VRIO analysis . The tool was originally develop by Barney, JB (1991) in his work ‘Firm Resources and Sustain Competitive Advantage’, where the author identifi four attributes that firm resources must possess to become a source of sustain competitive advantage.
According to him, resources must be valuable, rare, imperfectly UAE Mobile Number List imitable and irreplaceable. The original framework of it was call VRIN . In 1995, in his later work “Looking Inside for Competitive Advantage”, Barney introduc the VRIO framework, which was the improvement of the VRIN model.
VRIO analysis is bas on four questions that ask whether a resource is valuable, rare, or expensive to imitate. Furthermore, they ask if a company is organiz to capture the value of resources, a resource or capability that meets all four requirements can provide a sustain competitive advantage for the company.
What Is Vrio Analysis
VRIO analysis is a strategic planning tool used by companies to make efficient business decisions. The analysis provides information and with it, the results are expect to provide a competitive advantage.
The VRIO framework or analysis is design to help organizations discover and protect the resources and capabilities that give them long-term competitive advantage.
The differentiators and advantages identifi by this analysis will determine how to approach the market and inform the strategic decisions that shape the destiny of the company.
The VRIO analysis is represent in a quadrant like the following in which the level of competitive advantage is evaluat depending on the characteristics of the company’s resources and how they are organiz.