VRIO

Abstract

The purpose of VRIO analysis is to systematically identify resources and capabilities that may serve as a key source of competitive advantage. For a resource or capability to be the basis of a sustainable competitive advantage, it must be valuable (V), rare (R), and costly to imitate (I), and the firm must be organized (O) to capture the value from the resource or capability. This chapter discusses the underlying theory, core idea, depiction, process, insight or value created, and risks and limitations of VRIO analysis. Finally, the chapter continues the illustration of Harley-Davidson and applies the steps of VRIO analysis to this case.