CS Professional · Strategic Management and Corporate Finance · Managing the Multi-Business Firm and Analyzing Strategic Edge
Under the VRIO framework, a resource is valuable, rare and costly to imitate, but the firm has not set up processes, systems or a structure to exploit it. What is the most likely competitive outcome?
The outcome is a temporary competitive advantage. The resource is valuable, rare and costly to imitate, but without an organisation able to exploit it the firm cannot fully capture its value, so sustained advantage is not achieved under VRIO.
- ASustained competitive advantage
- BCompetitive parity
- CTemporary competitive advantageCorrect
- DCompetitive disadvantage
Explanation
In VRIO, a resource that is valuable, rare and costly to imitate but not exploited by the organisation yields only a temporary (unrealised) advantage. Sustained advantage needs all four conditions, including organisation to capture the value. Parity arises when the resource is valuable but not rare.
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