A firm's performance relative to industry peers is likely to vary according to the level to which resources, capabilities, and ultimately core competences satisfy VRIO criteria.

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When a firm's resources, capabilities, and core competences satisfy VRIO criteria (valuable, rare, inimitable, and organized), it will have a sustained competitive advantage over industry peers, leading to superior performance. However, if these criteria are not met, the firm may struggle to compete and may perform worse than its peers. Therefore, a firm's performance relative to industry peers depends on how well its resources, capabilities, and core competences satisfy VRIO criteria.

A Firm's Performance Relative to Industry Peers Is Likely to Vary