VRIO Model: The Resource-Based View Of Strategic Management

Resource based view of strategic management and how it adds to strategic management.

Resource-based view (RBV) is a design or strategy, which gives priority to resources as a firm identifies distinctive competence in realising sustainable competitive advantage. These resources are either tangible or intangible in nature. tangible resources are those that have physical attributes, such as land, capital, equipment, plant, and machinery. contrary, intangible resources have no physical appearance, however, the company still owns them. for instance, intellectual property, brand reputation and trademarks (Stone, 2011).

this strategy bring in light two critical assumptions; that they are, immobile and are heterogeneous in nature. the fact that the firms resources are heterogeneous in nature defines that they are different and unique in every organization or industry. For instance, operations in the Kenya Airways may differ to that of Fly Emirates, even though they offer the same services (Stone, 2011). The main reason may be to add efficiency in the system

Using the VRIO framework is effective in ensuring that the internal matters of the organisation run parallel with the organization’s available resources to ensure competitiveness. Therefore, application of resource-based strategies in the firm is important and firms should test their performance and give solution using this process.

References

Lean enterprise institute. (2009). What is Lean - History. Retrieved from http://www.lean.org/WhatsLean/History.cfm

Ovidijus, J. (2013, October 14). Strategic Management Insight: Resource Based View. Retrieved November 6, 2014, from http://www.strategicmanagementinsight.com/topics/resource-based-view.html

Rothaermel, F. T. (2013). Strategic management: Concepts. New York: McGraw-Hill