Learn in the textbookFrameworks for Analyzing the Business Environment
DefinitionVRIO analysis (VRIO分析) is a method that uses four questions to judge whether the management resources a company holds can be a source of competitive advantage (競争優位).
ExplanationThe four questions match the initials V (Value: economic value), R (Rarity), I (Imitability: how hard it is to copy) and O (Organization: an organization to exploit it). The more a resource is valuable, rare, hard to imitate and backed by an organization that puts it to use, the more lasting the competitive advantage it brings.
AnalogyThink of a master craftsman's skill at a long-established shop: if customers love it, no other shop has it, it is hard to learn, and the shop has a way to pass it on, it keeps drawing customers for years.
Memory hookV, R, I, O are gates in order. A resource that fails an earlier question does not move on to the later ones.