Question

A consumer electronics company is in the process of evaluating whether it should pursue an internal development strategy or an external growth strategy. To make this decision, the management needs to assess whether the company's internal resources are superior to those of competitors in the targeted area. Which of the following strategic management models would be most useful in this assessment?

a. the core competence matrix.
b. the Boston Consulting Group (BCG) matrix.
c. the transaction-cost economics model.
d. the VRIO framework.

Answer 1

Option d: The VRIO framework

Step-by-step explanation:

The VRIO Framework?

This simply talks about (explains) and tells (predicts) firm-level competitive advantage. It is said to uncovers sustained competitive advantage.

VRIO is an acronym for a four-question framework which makes up the 4 components of the VRIO Framework. It includes;

1. Valuable

2. Rare

3. Costly to Imitate

4. Organized to Capture.

VRIO as Valuable means it has attractive features and has low cost and price in its design and build.

VRIO as Rare means only a few firms posses it.

VRIO as Costly to Imitate means that it is difficult to be developed or bought at a reasonable price.

VRIO as Organized to Capture means it exploit competitive potential.