VRIO is a business analysis framework that forms part of a firm’s larger strategic scheme.

The basic strategic process that any firm goes through begins with a vision statement, and continues on through objectives, internal & external analysis, strategic choices (both business-level and corporate-level), and strategic implementation.

The firm will hope that this process results in a competitive advantage in the marketplace they operate in.

VRIO falls into the internal analysis step of these procedures, but is used as a framework in evaluating just about all resources and capabilities of a firm, regardless of what phase of the strategic model it falls under.

VRIO is an initialism for the four question framework asked about a resource or capability to determine its competitive potential: the question of Value, the question of Rarity, the question of Imitability (Ease/Difficulty to Imitate), and the question of Organization (ability to exploit the resource or capability).

The Question of Value: « Is the firm able to exploit an opportunity or neutralize an external threat with the resource/capability? »
The Question of Rarity: « Is control of the resource/capability in the hands of a relative few? »
The Question of Imitability: « Is it difficult to imitate, and will there be significant cost disadvantage to a firm trying to obtain, develop, or duplicate the resource/capability? »
The Question of Organization: « Is the firm organized, ready, and able to exploit the resource/capability? » « Is the firm organized to capture value? »