Individual assignment (1) - Resource-based view
There are many resources that we can analyze using VRIO framework for a company such as brand, user scale, enterprise culture, technology...etc. We can measure these resources whether they are Valuable, Rare, costly to Imitate, and can be Organized to capture value. The VRIO framework is a good tool to analyze company’s internal environment and to judge whether company can gain and sustain a competitive advantage.
In my point of view, the four measures are interdependent. To be exact, these measures have an order which is one after another. The latter element is dependent on the former one.
Firstly, managers must analyze whether resources can help a firm to increase the perceived value in the eyes of consumers or adding attractive features. If resources cannot fulfill ‘Valuable’ standard, all of other three measures will be meaningless.
Secondly, a resource which can be defined as rare only under the condition that it is valuable. A firm is on the path to competitive advantage only if it possesses a valuable resource that is also rare.
Thirdly, ‘costly to imitate’ is very important in the four measures. If the firm’s competitors fail to duplicate the strategy based on the valuable and rare resource, then the firm can achieve a temporary competitive advantage. Instead, then other competitors will want to imitate the resource. So ‘costly to imitate’ is dependent on ‘’valuable’ and ‘rare’. If competitors can easily imitate the valuable and rare resources, temporary competitive advantage will disappear soon.
Finally, whether a company has a sustained competitive advantage depends on the firm’s organizing ability to capture the resource’s value. If a firm is not effectively organized to maintain a valuable, rare, and costly-to-imitate (VRI) resource, it will lose this temporary competitive advantage. So ‘organized to capture value’ is the last step to have a sustained competitive advantage and...