Based on the VRIO framework, a resource can be considered a source of competitive advantage if it:
A) is shared by most companies in an industry.
B) is rare, valuable, difficult to imitate, and organized or managed by the company.
C) is the foundation of a company's strategic plan.
D) is kept as a trade secret rather than as a patent.
E) increases the cost of producing the product and, therefore, the price charged to customers.

Question

Quizplus · Accepted Answer

According to the VRIO framework, a resource can be considered a source of competitive advantage if it is rare, valuable, difficult to imitate, and organized or managed by the company. A resource that is shared by most companies in an industry would not be rare and is unlikely to give a company a competitive advantage. Similarly, a resource that increases the cost of producing the product and, therefore, the price charged to customers is not necessarily rare, valuable, or difficult to imitate. A resource that is the foundation of a company's strategic plan is important, but it still needs to meet the criteria of being rare, valuable, and difficult to imitate to be a source of competitive advantage. Keeping a resource as a trade secret rather than as a patent may provide some temporary protection, but it does not guarantee a sustainable competitive advantage.

Based on the VRIO Framework, a Resource Can Be Considered