How to determinate if you have ressources working as sustainable advantages ?
THE VRIN MODEL
By laurent DUSAUSOY
Applying Barney's (1991) VRIN framework can determine if a resource is a source of sustainable competitive advantage.
This analysis is useful when during the analytical process, you want to score your internal ressources (see scheme below - click to enlarge):
The VRIN matrix is an unusual matrix but very useful...In a few seconds, you can analyse by 4 items if you have sustainable core competencies (products, know how, assets, etc.) or not.
The VRIN matrix includes:
he important features for a resource to be strategically important are as below
- Valuable - When resources are able to bring value to the firm they can be a source of competitive advantage.
- Rare - Resources have to deliver a unique strategy to provide a competitive advantage to the firm as compared to the competing firms. Consider the case where a resource is valuable but it exists in the competitor firms as well. Such a resource is not rare to provide competitive advantage
- Inimitable - Resources can be sources of sustained competitive advantage if competing firms cannot obtain them. Consider the case where a resource is valuable and rare but the competing organizations can copy them easily. Such resources also cannot be sources of competitive advantage
- Non-substitutable - Resources should not be able to be replaced by any other strategically equivalent valuable resources. If two resources can be utilized separately to implement the same strategy then t
Take the example of a pencil:
Just imaging that you are about to launching an innovative pencil with an eraser...
You have in front of you 2 types of competitors:
- first'one are competitors providing pencil...
- second'one are competitors providing eraser...
The question is to analyse if (with your innovative pencil with eraser) you would have a sustainable competitive advantage...
Is your new pencil with eraser valuable ? For sure he is. He provides in one object, 2 importants functions (wrting and erasing) and he's new !
Is your new pencil with eraser is rareable? Unfortunately not because your competitors can find the raw materials like you, in an easy way.
Is your new pencil with eraser is inimitable? For sure not, by the way, I'm convinced he's already manufacturing at Zhejiang, China (Mainland).
Is your new pencil with eraser is Non-substitutable? One last time, unfortunately not...
So taking into account all these elements what kind of competitive advantage do you have ? short term?, long term ? What kind of strategy would you design (sales, marketing)?
TO BE CONTINUED