What is VRIO Analysis, and what are best practices, tools and online templates for teams and organizations?
Definition of VRIO Analysis
VRIO Analysis is an internal corporate investigation method used to identify and evaluate resources, with the goal of increasing competitive advantage. VRIO is an acronym for four criteria that are important for a company to consider: Value, Rarity, Imitability, and Organization.
Description of VRIO Analysis
- Value: Stakeholders determine whether the company’s resources are an asset or a liability. A helpful resource benefits the company, either internally, externally or both. This type of resource can be in the form of political, economic, social and technological advances. If a resource is not helpful, it must be eliminated, so that perhaps the funding used to obtain it can be used in a more efficient manner.
- Rarity: If a resource is considered rare or difficult to obtain, it can be considered an asset, especially if the company has ready access to it and the competition does not. If this changes, however, and the resource becomes difficult to obtain, a company’s dependence on it can become a liability. At this point it might be best to find an alternative.
- Imitability: A resource that is rare and difficult or impossible for the competition to obtain lacks imitability, which is an asset for the company who has it. This creates a competitive advantage and a higher likelihood for success. If a competitor decides it’s worthwhile to duplicate or find a substitute for the resource, and is successful, the competitive advantage decreases.
- Organization: This is the final step in the VRIO Analysis. It requires that the first three steps, Value, Rarity, and Imitability be done first, before moving on to Organization. In order to capitalize on existing resources, the company must be organized and able to take care of the resources at its disposal. A company which lacks Organization will lose track of important resources and could find itself without them.
After completing the VRIO Analysis, the company is ready to exploit their competitive advantage, because it has the knowledge of internal strengths in all departments, including marketing, sales, manufacturing and human resources.
Tools & Templates
Various types of Employee Surveys and Human Resource documents can be used to provide insights, data and additional support when using the VRIO Analysis method.
upBOARD's Online VRIO Analysis Tools & Templates
Unlike most traditional VRIO Analysis techniques, upBOARD’s online VRIO Analysis tools allow any team or organization to instantly begin working with our web templates and input forms. Our digital platform goes far beyond other software tools by including progress dashboards, data integration from existing documents or other SaaS software, elegant intuitive designs, and full access on any desktop or mobile device.
Learn more about upBOARD’s portfolio of other business strategy best practice tools and templates, including:
ADL Matrix, Affinity Diagrams, Baker’s 4 Strategies of Influence, Balanced Scorecard, Benchmarking, Blue Ocean Strategy, Bowman Strategy Clock, Build-Measure-Learn Feedback Loop, CAGE Distance Framework, Competitive Analysis, Competitive Landscape Analysis, Contingency Planning, Core Competence Analysis, Critical Success Factors, Discovery Driven Planning, Five Forces Model, Force Field Analysis, Gap Analysis, GE McKinsey 9-Box Matrix, Go To Market Strategy, Hambrick & Frederickson’s Strategy Diamond, Hedgehog Model, Hook Model of Behavioral Design, Hoshin Planning System, Kay’s Distinctive Capabilities Framework, Kotler’s Five Product Levels Model, Kotler’s Pricing Strategies, Lafley & Martin’s Five Step Strategy Model, McKinsey’s Seven Degrees of Freedom for Growth, Mission Statements, Mullin’s Seven Domains Model, OGSM Framework, Ohmae’s 3-C’s Model, PEST Analysis, Porter’s Diamond, Portfolio Management, Purpose Statements, Pyramid of Purpose, Scenario Planning, Simonson & Rosen’s Influence Mix, SOAR, Strategic Goals, Strategic Roadmap, Strategy Map, Strategy Roadmap, Strategy Uncertainty Map, SWOT Analysis, TOWS Matrix, Triple Bottom Line, USP Analysis, Value Chain Analysis, Value Disciplines Model, Value Net Model, Values Statement, Vision Statements, VRIO Analysis, and Weisbord’s Six-Box Model.