VRIO framework (formerly known as VRIN) is a business analysis tool that helps determining the internal sources of sustainable competitive advantage and is also part of the Resource-Based View (RBV).
According to this model, resources and skills should have four attributes that contribute to sustainable competitive advantage. Resources should be valuable, rare, inimitable and Organization-wide supported: VRIO
- Components of a VRIO Analysis
- What is a VRIO Analysis used for
- When to perform VRIO Analysis
- Using the Tool
- Example of VRIO Analysis
- VRIO Analysis tips
- Advantages and Disadvantages of a VRIO Analysis
The VRIO Framework or VRIO Model is part of the Resource-Based View (RBV), a perspective that explores the relation between the internal features of a business and its performance. In order to assess performance and benefit potential (e.g. Porter's Five Forces), RBV is also complementary to the Industrial Organization (I/O) viewpoints that look more at external factors such as competitiveness.
RBV's proponents argue that instead of looking at the global world, companies should look within the enterprise to identify the sources of competitive advantage.
Thus, Firm Resources and Sustainable Competitive Advantage are the main concepts in this view. All properties, skills, organizational processes, company characteristics, information and knowledge managed by a company that helps it to enhance its efficiency and effectiveness can be described as company resources.
Resources are often classified into categories such as tangible (e.g. equipment, machinery, land, buildings and cash) and intangible (e.g. trademarks, brand reputation, patents and licenses) or physical, human and organizational resources.
Resources must have four attributes that can be summarized in the VRIO framework in order for businesses to turn these resources into a sustainable competitive advantage.