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CS Professional · Strategic Management and Corporate Finance · Analyzing the External and Internal Environment

In the resource-based view of strategy, which feature of a firm's resource is most essential for it to deliver a sustained competitive advantage?

A resource gives sustained competitive advantage when it is valuable, rare, costly to imitate and properly exploited by the organisation. Size on the balance sheet, recent purchase cost or equal availability to rivals does not create lasting advantage.

  1. AIt is valuable, rare, hard to imitate and supported by the organisationCorrect
  2. BIt is the largest asset on the balance sheet
  3. CIt was acquired recently at a high price
  4. DIt is shared equally with all industry rivals

Explanation

The VRIO logic says a resource must be valuable, rare, costly to imitate and exploited by the organisation to sustain advantage. Book size or purchase price does not create advantage, and a resource shared by all rivals gives only parity.

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