A VRIO strategy is an analysis tool to help organizations uncover the competitive nature of their resources and capabilities. The implementation of this strategy assists companies with achieving their vision, long-term goals, and objectives. The strategic framework has been written using information from our VRIO guide.
This template has been designed to incorporate 4 key elements of a good VRIO strategy: value, rarity, imitation, and organization. This template can be used by a range of professionals, some of whom are in HR and finance. Additionally, the VRIO framework template can be downsized to retail stores like supermarkets to identify the value in their resources and seek a competitive advantage.
Implementation of the VRIO framework includes a range of examples of projects and ways of achieving high levels of performance through an analysis of the company’s internal characteristics.
Begin by asking yourself: What is it that I am trying to achieve? Why would this area be an important area to focus on?
The next step would be to brainstorm some focus areas and narrow them down to 4-5 important ones. For example, the focus areas for a VRIO strategy could be divided into the four sectors of the acronym: value, rarity, imitation, and organization. But it could also be divided into different areas within an organization i.e. monetary value, people, performance.
A Strategic Objective is a high-level statement that outlines what exactly you want to achieve, with a clearly stated deadline. The importance of an objective is to set a measurable goal that you and other members of your team can strive to accomplish. The objectives should be relevant to the focus area of choice.
For example, Create a USP through marketing tactics for the organization is an objective that could be used under the focus area: create value.
A KPI is a key performance indicator that is measurable and evaluates the success rate of an organization in relation to the task at hand. KPI’s can be very specific to the industry is focused on (read more about KPIs and their relevance to the strategy/ industry of choice). With reference to the VRIO strategy template, the KPI’s have to tie to achieving sustained competitive advantage to drive the company performance.
An example of a KPI to achieve the above USP objectives is: Grow Brand Recall by 20% by 3rd March 2022.
The above KPI is one of the many that can be used to specifically target the given objective at hand.
Projects fall under objectives too but are more closely related to KPIs. A project's main function is to achieve the measurable target. It is important when looking at the VRIO strategy to be narrow and well defined with projects that specifically relate to the objective and KPI at hand.
For example, a project to address the brand recall KPI would be the use of above-the-line marketing to develop a stronger brand image.
This KPI is specific to a VRIO strategy for the retail industry as it can be defined as achieving the focus area of creating value through marketing and sales-driven projects. However, if focused on a financial institute i.e. a bank, the project associated with the brand recall KPI could drastically change as a bank may want to increase its brand recall for a more global presence and thus focus on a survey as a tactical project instead.