Answer to Question #218841 in Management for Callymoa

Question

Use examples from the case study of city lodge Hotel group to explain the acronym VRIO

Answer 1

RIO is a four-part business analysis framework used to determine a business’ competitive potential.

The dimensions (value, rarity, imitability, and organization) ask whether the business in question’s resources and capabilities are valuable if they’re unique, if they’re easily replicable, and if the business itself has the right systems and processes in place is ready to capture value truly.

The first section, value, prompt businesses into considering the value of their resources and capabilities. This, in layman’s terms, means asking:

The main question: Is the resource or capability valuable to consumers/customers?

Can the business exploit an opportunity such as technological change or cultural change with the resource or capability (thereby increasing revenues)?

Can an external threat – such as the threat of rivalry, substitutes, or entry – be neutralized with the resource or capability (thereby decreasing costs)?

If the answer to the question of value is “no,” then the framework determines that the business has a competitive disadvantage.