Cardial Antonio

African Journal of Business Management Vol. 6(37), pp. 10159-10170, 19 September, 2012
Available online at http://www.academicjournals.org/AJBM
DOI: 10.5897/AJBM12.295
ISSN 1993-8233 ©2012 Academic Journals

Full Length Research Paper

Valuable, rare, inimitable resources and organization
(VRIO) resources or valuable, rare, inimitable resources
(VRI) capabilities: What leads to competitive advantage? Nuno Cardeal1* and Nelson António2
1

Católica-Lisbon School of Business Economics, Universidade Católica Portuguesa, Palma de Cima, Lisbon, Portugal.
2
ISCTE-IUL Lisbon, Av. Forças Armadas, Lisbon, Portugal.
Accepted 13 July, 2012

The resource-based view (RBV) argues that valuable, rare, inimitable resources and organization (VRIO) lead to competitive advantage. Dynamic capabilities (DC) are a comparatively new field and the related literature is mainly conceptual. Capabilities can be considered as the firm’s routines and processes. We argue that the “O” in VRIO refers to DC. DCs are the “organization” needed to transform bundles of resources into competitive advantage. Consequently, does competitive advantage stem from VRIO resources or from VRI capabilities? Through a case study we analyzed the development of one capability in a medium-sized Portuguese footwear manufacturer. After reviewing the process of development of the capability, we performed a VRIO test for each of the resources it exploits and a VRI test of the capability. We can conclude that none of the resources contributing to the capability are
VRIO, but the capability is VRI.
Key words: Competitive advantage, dynamic capabilities, footwear, resource-based view.

INTRODUCTION
The resource based view (RBV) focuses on specific resources and highlights that competitive advantage is based on valuable, rare, inimitable resources and organization (VRIO) (Barney, 1997). Dynamic capabilities
(DC), which represent the firm’s behavioral orientation towards constant

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