barney's article about VRIO Flashcards
no† failing
VRIO
Not Barney’s theory but he supports it
are the resources and capabilities valuable?
are they Rare
are they Imitable
are they organized
Which are the two components of VRIO (not what VRIO means)
internal environment and external environment
internal environment
internal resources and capabilities of a firm
external environment
business and societal trends
industry conditions
competitive environment
its only half the story
Bareney’s article, what does it do?
Looks inside organization with respect to creating competitive advantage
provides a tool to assess internal resources and capabilities
Barney’s major claims
analyzing firm’s external environment is not enough to understand strategic success
analysis of competitive implications of firm’s internal strengths and weaknesses needed
firm will have a sustained competitive advantage is resources and abilities and valuable, rare, inimitable and organized
value of ressources
useful to exploit opportunities and neutralize threats?
if so then it equal in competitions and not disadvantage
can be valuable in different ways, depending of the firm
rareness of ressources
how many firms have them?
if its valuable and rare, its a temporary competitive advantage
imitability of ressources
are they costly to get?
how much history and reputation do they have or does the company have?
if they are valuable, rare and costly to imitate, then they are sustained competitive advantage
organization of firm
is the firm organized to exploit these resources?
if VRIO all in place, very gyu sustained competitive advantage
if company is not organized, they can miss opportunities
what do the resources and capabilities include?
financial assets
physical assets
human assets
organizational assets
financial assets
debt
equity
retained earnings
etc
physical ressources
machines
manufacturing facilities
buildings
etc
human assets
experience
knowledge
judgement
risk taking
propensity
organizational assets
history
relationships
trust
organizational culture of groups of individuals associated with a firm
firms’ formal reporting structure
explicit management control systems
compensation policies
Importance of history in imitability of resources and capabilities
unique personalities
experiences
relationships
history can greatly affect the reputation and influence of a firm
ex: government support
importance of small decisions when imitating resources
frequently, competitive advantage depends on numerous successful small decisions
success is doing a lot of small things right
ex: The Mailbox being able to manage finance, accounting, HR, production, etc. so efficiently is hard to imitate
socially complex resources
organasitonal Phenomenon embedded in company
like the idea of friendships, teamwork, culture, trust, etc
they put emphasis on it and represents them, its hard to imitate
what can affect the value of a resource
technology ,customer taste and industry structure
making investment nearly can add value while not investing hinders opportunities
what do resource managers have to check about the company’s ressources
they have to see if they still have value after changes in the industry
what aspect of history makes resources hard to imitate
when getting rare and valuable resources depends on unique historical circumstances
why are numerous successful small decisions a successful advantage
they are invisible to firms trying to imitate their resources and abilities
what are complementary resources part of the organization of a firm that affects the value of overall resources?
formal reporting structure
explicit management and control systems
compensation policies
why are complementary ressources in a company’s organization important?
applied together they be gyu affff
Generates almost no competitive advantage alone
can allow organizations to exploit opportunities but if not organized, they can miss them
