Question: For a resource to provide competitive advantage, it must simultaneously meet all four conditions of the VRIO framework. This is well illustrated by a consideration
For a resource to provide competitive advantage, it must simultaneously meet all four conditions of the VRIO framework. This is well illustrated by a consideration of the personal computer industry. In IBM introduced the IBM Personal Computer, better known as the IBM PC Initially aimed at business users, the IBM PC reached neariconic proportions within the market. But this dominance would be shortlived. In first Columbia Data Products and then Compaq introduced models that were completely compatible, but cheaper, than the IBM PC Eventually, these and other clones would erode IBMs control of the market, such that in it abandoned the very market that it had helped create by selling its personal computing division to the Chinese firm Lenovo.
A primary reason for IBMs loss of dominance was imitability. For a variety of reasons, IBM engineers decided to build the PC using nonproprietary hardware and software components. Technicians at other firms were able to take advantage of this and, along with some creative reverse engineering, were able to produce their own models that were identical to the IBM PC IBMs later attempts to recapture the market through proprietary hardware and software failed miserably. Thus, while the PC proved to be a valuable, rare, and organized resource that brought great advantage to IBM, to the extent that an entire class of computers came to be known as IBM PCcompatibles, the absence of inimitability led to IBMs downfall.
What steps would you, as the manager of a firm, take to preserve the imitability of your resources? Conversely, how would you neutralize the inimitable advantage that your competitors have? If you knew that your competitive advantage was based on imitable resources, as was the case with IBM, how would you insure the sustainability of that advantage?
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