VRIO Framework

ü VRIO is a model which allows insight into whether

the organisation’s resources and capabilities
translate to the potential for sustained
competitive advantages
♦ The question of Value
♦ The question of Rarity
♦ The question of Imitability
♦ The question of Organisation
 V (value)

R (Rare)
VRIO framework
(Barney 1991, 2005)
I (Inimitable)

O (organised)
The question of value
ü Do a firm’s resources and capabilities enable the
firm to respond to environmental threats or
opportunities?
ü Does the organisation have the capacity to deliver
what the customer values?
ü Examples:
● Highly recognised brands
● Best locations
The question of rarity
ü How many competing firms already possess
particular valuable resources and capabilities?
ü Examples:
● Patents and copyrights
● Access to the best raw materials
The question of imitability
ü Are the resources or capabilities easy to imitate
which means easy to transfer or to replicate?
ü Who owns the competence and how easily
transferable is it?
ü Examples:
§ Easy to transfer: finance and raw materials
§ Not easy to transfer: geographical immobility of
natural resources and complementarity between
resources
Criteria for the inimitability of strategic capabilities

Johnson, Scholes and Whittington 2011

The question of organisation
ü Is a firm organised to exploit the full competitive
potential of its resources and capabilities?
ü Example: The firm is using the resources effectively
8
VRIO Framework