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SU190264W
Make a list of your resources and abilities before you begin. These can be material, financial,
or human resources such as patents, machines, people talents, cost advantages, or anything
else. They can be tangible or intangible assets. Most long-lasting competitive advantages
come from intangible assets, although that isn't always the case. Applying the VRIO
framework, consider each item on this list from the four perspectives listed below:
Value: Do you provide a resource that benefits your clients? Do you have the internal
resources necessary to seize an opportunity or crush a rival?
No: you are at a competitive disadvantage and must re-evaluate your competencies
and resources to find value.
Yes: if value has been determined, go on to rarity in your VRIO analysis.
Rarity: Are there limited resources or talents within your control? Have you acquired a
sought-after yet difficult-to-find item?
No: your organization is in a position of competitive parity since you offer value but
lack novelty. Because your resources are valued but plentiful, it is more difficult for
you to compete in the market (but not impossible). Reassessing after going back a
step is advised.
Yes: once worth and rarity have been determined, imitation becomes the next
obstacle.
No: you have a brief competitive edge if your resource is economical or simple to
reproduce yet has value and rarity. Go back and re-evaluate because it will take a lot
of work to separate your services from those of your rivals and maintain an edge over
them.
Yes: your company is presently in the spotlight because you provide a useful,
uncommon, and difficult-to-copy service.
No: it won't be possible to completely utilize the potential of your valuable, rare, and
expensive-to-imitate resources without the internal organization and assistance. Your
MILFORD KUDAKWASHE MOYANA
SU190264W
business will possess an untapped competitive edge, so you'll need to reconsider how
to build the required structure.
Yes: when all four elements of the VRIO framework have been successfully
recognized, your organization has attained its ultimate goal of continuous competitive
advantage.
Few businesses spend the time to examine their core capabilities to discover what sets them
apart. We think it's a fruitful exercise because: