Resources & Capabilities

List what you have before you judge it, then test each item against four questions (valuable, rare, costly to copy, organized to exploit) and name the barrier that would keep a rival out.

Mixed research: the resource-based view has meta-analytic support for the link between strategic resources and performance (Crook et al., 2008) and a sustained critical literature (Kraaijenbrink et al., 2010). VRIO as a scored checklist (Barney, 1995) is a teaching device with little direct testing. Y and N answers are your judgment.

Use it when:

• You have mapped your activities in 7.4 Business Model & Value Chain and want to know which ones give lasting advantage.
• You prepare a SWOT, a major investment or an international expansion.
• You suspect you present table stakes as differentiators.

Skip it when:

• You do not know your activities or customers yet: start with 7.4 Business Model & Value Chain.
• Your question is whether an advantage travels abroad: use 7.15 VRIO FSA Finder.

The resource-based view turns strategy's gaze inward: sustained advantage comes not from market position alone but from what the firm has and can do that rivals cannot easily match. Wernerfelt (1984) framed firms as bundles of resources. Barney (1991) set out the core attributes, and Barney (1995) turned them into the test used here: a resource supports sustained advantage only if it is valuable, rare, costly to imitate and actually exploited by the organization.

The evidence is mixed in a specific way. The theory has independent support in a meta-analysis (Crook et al., 2008) and an equally substantial critical literature (Kraaijenbrink et al., 2010). Expect VRIO to structure an honest argument, not to compute an answer.

The steps follow the theory's discipline. Step 2 lists before judging, because teams who judge while they list write down flattering items. Step 3 moves one column at a time, and most things should fail: parity is a normal, useful verdict. Step 4 exists because "inimitable" is the easiest box to tick and the hardest to defend. Step 5 routes the results onward, since the most valuable finding is often an advantage you own but have not organized to use.

Strong answer: "Our prefab timber-house business in Småland, against the two builders and the national chain that bid on the same municipal tenders." Name rivals, not "the market".

Business or unit:

Market or context:

Benchmark rivals:

Illustrative example: the firm and all answers are made up.

A family-owned builder of prefabricated timber houses in Småland, Sweden, bids on municipal housing tenders against two regional builders and a national chain.

Barrier for the crew: built over many seasons and held in the people, so a rival would need years or a hire of the whole team.

Conclusion: the real advantages are the crew and the library. The library needs an owner and a yearly review before it can be used in bids. The personal tie is not a strategy: plan as if it ends.