For a resource to provide sustained competitive advantage, which VRIO criterion must be satisfied?

• A. Valuable, rare, hard to imitate, and organized to capture value
• B. Valuable, common, cheap to imitate, and flexible
• C. Rare, expensive to maintain, and legally compliant
• D. Easy to imitate, valuable, integrated

Answer: (A)

The main concept tested is that a resource can deliver a sustained competitive advantage only if it passes all four VRIO criteria: it is valuable, rare, hard to imitate, and the organization is structured to capture value from it. The best choice includes all four: it adds value, is not commonly possessed, is difficult for competitors to copy, and the firm has the right processes, structure, and culture to exploit it. When a resource is valuable and rare but easy to imitate, competitors can replicate it and the advantage won’t last. If it’s valuable and rare but the company isn’t organized to capture value, the potential benefit isn’t realized. And if a resource isn’t valuable, not rare, or not costly to imitate, the advantage cannot be sustained regardless of organization.