The Full Form of VRIO is‍ Value, Rareness, Imitability, Organization.

VRIO is an acronym for a four-question framework of value, rarity, imitability, and organization. It is used to uncover “sustained competitive advantage.” The four components of VRIO analysis are typically approached in the style of a decision tree:

• Value: Do you offer a resource that adds value for customers? Are you able to exploit an opportunity or neutralize competition with an internal capability?
  • No: You are at a competitive disadvantage and need to reassess your resources and capabilities to uncover value.
  • Yes: If value is established, move on in your VRIO analysis to rarity.

• Rarity: Do you control scarce resources or capabilities? Do you own something that’s hard to find yet in demand?
  • No: You have value but lack rarity, putting your company in a position of competitive parity. Your resources are valuable but common, which makes competing in the marketplace more challenging (but not impossible). It’s recommended to go back one step and reassess.
  • Yes: With value and rarity identified, your next hurdle is imitability.

• Imitability: Is it expensive to duplicate your organization’s resource or capability? Is it difficult to find an equivalent substitute to compete with your offerings?
  • No: If your resource has value and rarity, but is affordable or easy to copy, you have a temporary competitive advantage. It will require considerable effort to stay ahead of competitors and differentiate your services—go back one step and reassess.
  • Yes: You offer something that’s valuable, rare, and hard to imitate—now the focus is on your organization.

• Organization: Does your company have organized management systems, processes, structures, and culture to capitalize on resources and capabilities?
  • No: Without the internal organization and support, it will be difficult to fully realize the potential of your valuable, rare, and costly-to-imitate resources. Your company will have a unused competitive advantage and will need to reassess how to attain the needed organization.
  • Yes: Your company has achieved the ultimate goal of sustained competitive advantage when it has successfully identified all four components of the VRIO framework.