A FRAMEWORK FOR ANALYSIS : VRIO
Resource-based analysis of the firm determines which resources and capabilities result in which strengths or weaknesses
Strategies are to be implemented which exploit (or build) strengths and avoid (or eliminate) weaknesses
What constitutes a strength or weakness is partially a function of the external environment
Framework for analysis: VRIO - resources and capabilities should be
o Valuable
o Rare
o Inimitable
o Organization can effectively exploit them
VALUE of resources and capabilities
A VALUABLE resource or capability (or a combination thereof) must
o Contribute to fulfillment of customer's needs
o At a price the consumer is willing to pay, which is determined by
Customer preferences
Available alternatives (including substitute products)
Supply of related or supplementary goods
Thus, value is partially a function of external environment (product market, demand forces)
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