When would a company use a VRIO analysis?

When would a company use a VRIO analysis?

1: When analyzing current market share among competing brands

2:When determining manufacturing work schedules

3:When reorganizing staff

4:When deciding whether or not a new product might work in the marketplace

Answer: 4:When deciding whether or not a new product might work in the marketplace

Valuable, Rare, Inimitable, and Organized analysis or VRIO plan is a strategic management tool that can be used to assess the firm’s resources and capability appropriately supporting possible sustainable competitive advantage. This analysis is more useful in situations where a firm is contemplating the development of a new product or a venture into a new segment of an industry.

It refers to value, commodity, rarity, imitation, and organization of the resources and capabilities needed for the new product or new market to deduce whether the company has the competitive advantage necessary to succeed. Utilizing VRIO analysis one can pinpoint which resources and capabilities are likely to generate a long-term competitive advantage and which indeed can be easily mimicked by the competitors.