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The application of the two frameworks is rather similar, although the VRIO Analysis offers a more complete picture of the quality of available resources. The first thing to do is to identify and define the resources at the company’s disposal.
They can be classified into a couple of categories, such as tangible resources (land, buildings, cash, equipment, machinery), intangible resources (patents and licenses, brand reputation, trademarks), and organisational, human, and physical resources. Then, those resources are analysed along the VRIO chain and each site is evaluated based on all four criteria.
The result of the analysis of the resources should be classifying resources based on whether they deliver: competitive disadvantage, competitive parity, temporary competitive advantage, unused competitive advantage, or sustained competitive advantage.
After the analysis, the company can decide on its future strategy and whether certain resources should be kept, protected, or expanded. Also, this analysis should be performed periodically so the company can adapt to any changes in the internal or external environment.
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