VRIN Framework

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Applying Barney's (1991) VRIN framework can determine if a resource is a source of sustainable competitive advantage. To serve as a basis for sustainable competitive advantage, resources must be --

  • valuable -- meaning that they must be a source of greater value, in terms of relative costs and benefits, than similar resources in competing firms
  • rare -- rareness implies that the resource must be rare in the sense that it is scarce relative to demand for its use or what it produces
  • inimitable -- it is difficult to imitate
  • nonsubstitutable -- other different types of resources cannot be functional substitutes

The criteria of the VRIN Framework clearly rules out best practices as a source of competitive advantage. If other firms can easily understand and copy a capability, it is not a source of advantage.