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

Perrin Telecom compares its resources with rivals. Its customer database is hard to copy and unique, but it is poorly integrated and rarely used to shape offers. Applying the VRIO framework, what does this imply?

The database offers only unexploited potential advantage. It is rare and hard to imitate, but because Perrin is not organised to use it in shaping offers, the organisation criterion in VRIO fails, so the sustained competitive advantage is not yet realised.

  1. AThe resource is valuable, rare and inimitable, so it already gives sustained competitive advantage
  2. BThe resource is not rare, so only parity is achievable
  3. CThe resource has potential for advantage, but without the organisation exploiting it, the advantage is unrealisedCorrect
  4. DThe resource is a threshold resource and cannot give any advantage

Explanation

VRIO asks whether the organisation is organised to capture the value of the resource. The database is rare and costly to imitate, but poor integration and use mean the O condition fails, so advantage is only potential. Threshold classification ignores its rarity.

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