Resources and capabilities - Distinctive resources and capabilities as a basis of competitive advantage

5 important questions on Resources and capabilities - Distinctive resources and capabilities as a basis of competitive advantage

What are the 4 key criteria by which resources and capabilities can be assessed in terms of providing a basis for achieving competitive advantage?

VRIO
  • Value
  • Rarity
  • Inimitability
  • Organisational support

What are rare resources?

Those that are possessed uniquely by one or few organizations.

What are inimitable resources and capabilities?

Those that competitors find difficult and costly to imitate or obtain or substitute.
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What are the 3 criteria for inimitability?

  • Complexity - internal or external linkages.
  • Culture and history - taken-for-granted activities or path dependency
  • Causal ambiguity - characteristic or linkage ambiguity

What does organisational support mean in VRIO?

That an organisation must be suitably organised to support the capabilities that have potential for competitive advantage.

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