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ACCA Strategic Professional · Strategic Business Leader · The internal resources, capabilities and competences of an organisation

Calder Foods has a patented fermentation process that is valuable, rare and costly for rivals to imitate. The company has a well-staffed R&D unit and licensing team that exploit the process fully. Using the VRIO framework, what does the resource imply for Calder?

The resource meets all four VRIO tests: it is valuable, rare, costly to imitate and properly exploited by the organisation. Therefore it provides a sustained competitive advantage for Calder, rather than temporary advantage or mere parity with rivals.

  1. AIt gives a sustained competitive advantageCorrect
  2. BIt gives only a temporary competitive advantage
  3. CIt gives competitive parity only
  4. DIt gives a competitive disadvantage

Explanation

A resource that is valuable, rare, costly to imitate and exploited by the organisation (the O element) yields sustained competitive advantage. Temporary advantage would apply if imitation were easy, and parity if the resource were not rare.

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