An analytical technique, which for each type of resource considers several evaluation dimensions. It considers Value, Rareness, Imitability, Organization.
1. Define your key resources.
2. Define if the resources are valuable. Enable firms to exploit opportunities or defend against threats, help organisations to increase perceived customer value by increasing differentiation and/or decreasing the price of the product?
3. Define the resources’ rarity. Only acquired by one or few companies? Otherwise firms can use identical resources to implement same strategies and no superior performance can be achieved (competitive parity).
3. Define how costly it is to imitate resources. Directly imitating (duplicating) the resource or providing comparable product/service (substituting)? It is hard to imitate – a) resources developed due to historical events or over a long period, b) if particular resources can’t be identified, c) if resources are based on a company’s culture or interpersonal relationships.
4. Define if they are organised to capture value. Are management systems, processes, policies, organisational structure and culture able to fully realize the potential of resources & capabilities?
Anytime, mostly in the beginning.
Find out if your resources can be a source of sustained competitive advantage.
Know your product and market.
Discover value and potential of resources.
Define strategy and find market.