Sustained Competitive Advantage through VRIO Framework

Organizations and individual resources can achieve sustained competitive advantage through VRIO framework. The below flow chart explains advantages and disadvantages of each parameter of VRIO framework.



VRIO framework examines if resources are valuable, rare, costly to imitate and non-substitutable. Let us examine these parameters below

Valuable: It is important that the resources add value to the offering of the organization. This can be in the form of increased quality, add-on features, decreased cost of production, increased differentiation. Basically, the product must provide competitive advantage to the firm.

Rarity: The resource must be rare in terms of their availability with the firms. These are important to achieve competitive parity.

Imitability: In order to have a sustained long-term advantage, the resource must be unique in terms of getting a substitution or imitation of that resource.

Organized: The firm / organization must be capable to exploit the valuable, rare and imitable resources to exploit them to their advantage.