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Capabilities VRIN Essay

The firm is a bundle of resources. A firm can be differentiated by their resources and the way they are combined.

Internal environment of the organization
Resources: All assets, capabilities, organizational processes, firm attributes, information and knowledge  inputs that facilitate the firm to perform its activities. All resources may not have strategic relevance, only certain ones are capable of creating valuable competitive advantage.

Valuable: to bring value to the firm and to be a source of competitive advantage Rare: the resource has to be rare, it can’t be used by the competitors as well, if the resources are existing in the competitor firm, there is no competitive advantage. Inimitable: competing firms cannot obtain resources which give sustained competitive advantage. Non-substitutable: there are no other strategically equivalent valuable resources. When two resources can be utilized separately to implement the same strategy, they are strategically equivalent.

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