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1. Discuss in detail how the VRIO Framework can be used to evaluate a business’
competencies. Explain which of the VRIO factors would allow a firm to achieve a sustainable
advantage over its competitors, and why?
Solution
1. VRIO framework is the tool used to analyze firm's internal resources and capabilties to find
out if they can be sources of sustained competitivie advantage.
2. In order to understand the sources of competitve advantage firms are using many toools to
analyze their external and internal enviornment.
3. one of such tools that analyaze firms' internal resources is VRIO analysis.
4 . The tool was originally developed by Barney J.B in his work "Firm Resouces must posses in
order to become a sources of sustained competitive advantage".
5 . According to him , the resouces must be valuable, rare, imperfectly imitable and non-
substituable. His original framework was called VRIN.
6. Firm has valuable , rare and costly to imitate resouuces can 9but not necessarily will)
acheives sustained competitve advantage. Barney has idnetified three reasons why resourse
can be hard to imitate.
Historical Conditions: Resources that were developed due to historical events or over a lons
period usually are costly to imitate.
Casual ambiguity: companies can't identify the particular resurces that are the cause of
competitve advantage.
Social complexity . The resouces and capabilties that are based on company's culture or
interpersonal relationshipss.

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1.    Discuss in detail how the VRIO Framework can be used to evalua.pdf

  • 1. 1. Discuss in detail how the VRIO Framework can be used to evaluate a business’ competencies. Explain which of the VRIO factors would allow a firm to achieve a sustainable advantage over its competitors, and why? Solution 1. VRIO framework is the tool used to analyze firm's internal resources and capabilties to find out if they can be sources of sustained competitivie advantage. 2. In order to understand the sources of competitve advantage firms are using many toools to analyze their external and internal enviornment. 3. one of such tools that analyaze firms' internal resources is VRIO analysis. 4 . The tool was originally developed by Barney J.B in his work "Firm Resouces must posses in order to become a sources of sustained competitive advantage". 5 . According to him , the resouces must be valuable, rare, imperfectly imitable and non- substituable. His original framework was called VRIN. 6. Firm has valuable , rare and costly to imitate resouuces can 9but not necessarily will) acheives sustained competitve advantage. Barney has idnetified three reasons why resourse can be hard to imitate. Historical Conditions: Resources that were developed due to historical events or over a lons period usually are costly to imitate. Casual ambiguity: companies can't identify the particular resurces that are the cause of competitve advantage. Social complexity . The resouces and capabilties that are based on company's culture or interpersonal relationshipss.