Netflix VRIO

VRIO framework can be used to determine the return potential associated with the rm’s resources and capabilities.

Capabilit ies

DVD Rental Physical Distribut ion Online Streamin g itle Variety Convenie nce

Valuabl e?

Rare?

 Yes  Yes

No

Difcult to Imitate ? No

Supporte d by Organizat ion? No

Competit ive Implicati ons? Temporary

 Yes  Yes

Yes

Yes

Yes

Temporary

 Yes  Yes

Yes

Yes

Yes

ustainabl e

 Yes  Yes

Yes

No

Yes

 Yes  Yes

Yes

Yes

Yes

ustainabl e ustainabl e

In case the resource is not !aluable" that particular resource mi#ht hinder the rm from e$ploitin# opportunities or neutrali%e threats. &y e$ploitin# a resource sometimes" the cost may increase and willin#ness to pay will decrease. uch resources are weaknesses. Valuable resources that are rare are considered stren#ths. ' company should e$ploit a resource which is !aluable and rare but not costly to imitate at the same time in order to #ain a temporary ed#e. (eadin# to rst mo!er ad!anta#e. To To #ain a sustained ad!anta#e" company should e$ploit a resource which is !aluable and rare at the same time costly to imitate. This will cause a se!ere disad!anta#e for its competitors. )hen VRIO is applied for Net*i$" it can be seen that the rm’s bi##est opportunity was its ability to stream mo!ies o!er the internet throu#h !arious electronic de!ices. This capability was !aluable" rare and costly to imitate. Net*i$ e$ploited this ad!anta#e #ainin# !aluable rst mo!er ad!anta#e.