increase in revenues or a decrease in costs (or both). A great way to identify possibly valuable resources or capabilities is by looking into the company's value chain. In the value chain, a business develops its products and services step-by-step, with each function along the way adding some sort of value to the product or service. The choices a firm makes regarding its value chain (including how to operate, and which steps to operate in) is closely tied to the firms resources and capabilities, therefore making it a valuable tool in identifying value in resources and capabilities. If some asset that the company has allows it to operate more effectively in a certain portion of the value chain, chances are that resource will be considered valuable by the VRIO framework. Question of Rarity Having rarity in a firm can lead to competitive advantage. Rarity is when a firm has a valuable resource or capability that is absolutely unique among a set of current and potential competitors. How to determine if the company's resource is rare and creates competitive advantage? A firm's resources and capabilities must be both short in supply and persist over time to be a source of sustained competitive advantage. If both elements (short supply and persistence over time) aren't met, then the resources and capabilities a firm has can't be a sustained competitive advantage. If a resource is not rare, then perfect competition dynamics are likely to be observed. Example of Rarity – A janitor who defines his/her job as helping the firm make and sell better products instead of just referring to their job as simply cleaning up facilities is quite unusual. Most individuals would agree that this firm has a source of competitive advantage over other firms in their industry because their objectives and strategies are transparent throughout the entire firm; unlike many other firms where only top tier management is the only group that believes in their objectives and strategies (Barney & Hesterly, 2011). this raity lead to fight in the competition. Question of Imitability The primary question of “imitability” asked in the VRIO framework in internal analysis is that “ Do firms without a resource or capability face a cost disadvantage in obtaining or developing it compared to firms that already possess it?” Firms with valuable and rare resources, which are hard to imitate by other firms, can gain the first-mover advantages in