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VRIO Analysis Tool
Test each capability with four questions, at home and in each market you could enter, to see which advantages travel, which become gaps, and which market they favour.
This tool also runs as a stage in a playbook, which takes you through several tools in order:
- Expand into a new market Stage 3 of 6: what do we have that would still be an advantage there? Start at stage 1
Not following the playbook?
Where you want to compete
Every question is asked about each market, not about home. A strength at home can be ordinary there, and one market can differ from another.
Your capabilities
Real things the company can do or has, specific enough to test: "packing lines that make small packs cheaply", not "quality".
Add capabilities
Your notes never leave your browser
Capabilities, answers and notes stay on your computer and in your progress file. To write the diagnosis, only the results for each place in your list are sent to our server. How it works
Ask the four questions
Answer in order. A No ends it: the later questions no longer apply.
- Valuable?
- Does it help win customers or cut costs there?
- Rare?
- Do few rivals there have it?
- Hard to copy?
- Would it take rivals years or a lot of money?
- Organized to use it?
- People, processes and budget to use it there.
Stage 2's conditions
Stage 2 said the market is worth it only if these are met. Who would meet each one?
Which market your advantages favour
What travels
Each capability, asked twice
Stage 2's conditions
One-page SWOT (optional)
A summary for a board, before the choice of route. It adds no new facts: strengths and weaknesses come from this stage, opportunities and threats from stages 1 and 2.
Save your progress
Download your progress file to continue from this point any time, on any computer: choose it under "Coming back?" at the start of the tool. Each new file includes everything so far, including the earlier stages when they are connected, so keep the latest one. Your work stays in this browser only until you close it.
Not saved yet.
Take your results with you
A PDF of what travels, each capability asked twice, the one-page SWOT and the diagnosis.
About the tool
Why it exists
A strength at home can be ordinary abroad
VRIO tests each capability with four questions: is it valuable, rare, hard to imitate, and is the company organized to use it? Only a capability that passes all four is a lasting advantage. This tool asks them twice, at home and in the market you want to enter, because the answers often change.
It works on its own, and as stage 3 of our playbook for expanding into a new market, where it picks up the market and its conditions from Five Forces in stage 2, and adds an optional one-page SWOT. For the method, see our guide to VRIO.
The method
How the tool works
Four questions, in order. A No ends it: not valuable = no advantage; valuable but common = on par with rivals; rare but easy to copy = a short-lived edge; hard to copy but not organized = an edge not used yet; all four = a lasting advantage.
Asked at home and in each market. Up to three markets are tested side by side; in the playbook, the markets that went forward in stage 2. Travels: lasting at home and there. An advantage only there: lasting there, not at home. Partly: a short-lived or unused edge there. Doesn't travel: an edge at home, none there. Those are the gaps a partner would have to fill. The market the advantages favour gets two points for each lasting advantage and one for each partial one.
The one-page SWOT. Strengths are the advantages that hold there; weaknesses are the gaps; opportunities and threats are the medium and high forces from stage 1 and the pressures from stage 2. It adds no new facts.
What leaves your computer. Capabilities and notes stay in your browser and your progress file. To write the diagnosis, the page sends our server only the result for each place in your list, and the server keeps nothing.