VRIO

VRIO (value, rarity, imitability, and organization) is a business analysis framework for strategic management. As a form of internal analysis, VRIO evaluates all the resources and capabilities of a firm. VRIO is an initialism for the four question framework asked about a resource or capability to determine its competitive potential: *The question of value: Is this resource or capability valuable to the firm? *The question of rarity: Is control of the resource or capability limited? *The question of imitability: Is there a significant cost disadvantage to a firm obtaining or developing the resource or capability? *The question of organization (ability to exploit the resource or capability): "Is the firm organized, ready, and able to exploit the resource/capability?" "Is the firm organized to capture value?" An earlier version of this framework used the acronym VRIN: value, rarity, imitability and (non)-substitutability. The VRIN format was first proposed by Jay Barney in 1991 and made available as VRIO in 1995.

VRIO (value, rarity, imitability, and organization) is a business analysis framework for strategic management. As a form of internal analysis, VRIO evaluates all the resources and capabilities of a firm. VRIO is an initialism for the four question framework asked about a resource or capability to determine its competitive potential: The question of value: Is this resource or capability valuable to the firm? The question of rarity: Is control of the resource or capability limited? The question of imitability: Is there a significant cost disadvantage to a firm obtaining or developing the resource or capability? The question of organization (ability to exploit the resource or capability): "Is the firm organized, ready, and able to exploit the resource/capability?" "Is the firm organized to capture value?" An earlier version of this framework used the acronym VRIN: value, rarity, imitability and (non)-substitutability. The VRIN format was first proposed by Jay Barney in 1991 and made available as VRIO in 1995. Six common examples of opportunities firms could attempt to exploit are: technological change, demographic change, cultural change, economic climate, specific international events, legal and political conditions. Furthermore, five threats that a resource or capability could mitigate are: the threat of buyers, threat of suppliers, threat of entry, threat of rivalry, threat of substitutes. The identification of possibly valuable resources or capabilities can be done by looking into a company's value chain, and whether a company's assets allows it to operate more effectively in parts of the value chain.

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