BUSA

When the perceived value of a product increases

The firm's profitability increases

which of the following statements is correct

all accounting data is historical data and backward looking, accounting data focus mainly on tangible assets which are no longer most important, accounting data does not consider off balance sheet items

the _ uses multiple internal and external performance metrics to balance financial and strategic goals

balanced scorecard

In order to be successful, a firm must not only have a resource that is valuable, rare, costly to imitate, it must also

be organized to capture the resource's value

One of the most popular tools used by firms to evaluate their current situation and future prospect is

the SWOT analysis

shareholders are

the legal owners of public companies, individuals or organizations that own one or more shares of stock in a public company

According to the case, which one of these factors may not have contributed to Bill Gates' success?

the physical location of Seattle as the company's headquarter

T/F: Core competencies need to be refined and upgraded in order to increase the probability that they will continues to lead to competitive advatages

true

T?F the value chain concept can be applied to basically any firm

true

In order to avoid making a costly mistake due to the potential of shortcomings of the SWOT analysis, a manager should

use the SWOT analysis together with in-depth analysis of the internal and external environment before deriving strategic options for the firm

The VRIO framework refers to the resources

valuable, rare, costly to imitate, and organized

_ change with the level of consumer demand

variable costs

The four questions used in the balanced scorecard framework are

what core competencies do we need? how do shareholders view us? how do we create value? how to customers view us?

which of the following is a standard dimension for measuring competitive advatage

what is the firm's accounting profitability

Capabilities find their expression within all of the following except

A company's financial statements

standardized financial metrics derived from publicly available accounting data such as income statements and balance sheets can be used to assess competitive advantage from which perspective

Accounting profitability

Which of the following can help a firm extend its competitive advantage?

Better expectations of future resource value, causal ambiguity, path dependence

_ is more likely to spring from intangible resources rather than tangible resources

Competitive advatage

_ resources have physical attributes and are visible

tangible

Generally speaking, the resource-based view defines resources more _ than previously define

broadly

The translation of strategy into action takes place in the firm's _, which details the firm's competitive tactics and initiatives

business model

all of the following are examples of activities that create value except

closely monitoring the firm's stock price.... taking physical delivery of a product, taking an order from a customer, invoicing a customer DO create value

the advantages of using the balanced scorecard framework are that it helps managers

communicate and link strategic vision, implement feedback and organizational learning, translate the strategic vision into operational goals, design and plan business processes

In the dynamic capabilities perspective, _ is the outflow of the firm's capacity to leverage its resources

competitive advantage

in the dynamic capabilities perspective, _ is the outflow of the firm's capacity to leverage its resources

competitive advatage

According to the dynamic capabilities perspective, competitive advantage comes from

constantly changing the firm's resource base / capacity to modify and leverage its resource base to address the constantly changing environment

dynamic capabilities are most relevant in

constantly shifting markets

_ helps firms recognize and address society's expectations of the business enterprise at a given point in time

corporate social responsibility

The two factors critical to evaluating the economic value of a good or service

cost value

A resource is _ if firms are unable to develop or buy the resource at a reasonable price

costly to imitate

given that compared to the past the importance of intangibles has increased, the importance of the firm's book value has _ as part of a firm's total stock market valuation

decreased

_ describe a firm's ability to create and leverage its resources to gain competitive advantage

dynamic capabilities

the idea that all available information about a firm's past, current state, and expected performance is embedded in the market price of the firm's stock

efficient-market hypothesis

one way to determine the value of a good in the eyes of the consumer is to

examine a consumer's purchasing habits for their revealed prefernces

Intangible resources are built through

experience over time, continuous investments

T:F/ causal ambiguity describes a situation in which cause and effect are readily apparent

false

Groupon's initial success was largely due to the company's

first mover advatage

The purpose of a SWOT analysis is to

form a strategy that is tailored to the unique needs of a company

which insights gained from a SWOT analysis could lead McDonald's to open new restaurants in China?

growth in emerging economies and market share decline in developed economies

Understanding the cause and effect of a strategy, including the "why," may, going forward, _

have a significant impact on a firm's competitive advantage

Which of the following is not considered an example of "isolating mechanisms"

high volatility of future resource value

what are the three standard dimensions for measuring competitive advantage

how much shareholder value does the firm create, how much economic value does the firm generate, what is the firm's accounting profitability

A resource is considered rare

if one or few firms can perform the capability in the same unique way

in contrast to primary activities, support activities add value

indirectly

dynamic capabilities are

intangible resource

_ have no physical attribute

intangible resources

The reason for a large difference between the consumer's willingness to pay and the cost to produce the good or service are

it can charge higher prices to reflect the higher product value and increase profitability, it can charge the same price as competitors and gain market share

One of Nike's competitive advantage was

knowing how to create heroes which increases product sales through the person and the story

resource heterogenety

means that bundles of resources and capabilities differ across firms

Time compression diseconomies

often lead in disappointing outcomes

_ describes a process in which options are limited by decisions made in the past

path dependence

_ activities are those activities that add value directly by transforming inputs into outputs

primary

competitive advantage is considered _ in that it is measured in relation to other firms

relative

_ are the firm's level of investments to maintain or build a resource

resource flows

what two assumptions are critical behind the resource-based view of the firm

resource heterogeneity, resource immobility

_ refers to the idea that resource differences are difficult to replicate and don't move easily from firm to firm

resource immobility

_ are the firm's current level of intangible resources

resource stocks

the _ view provides a model that aids in identifying core competencies

resource-based

While the _ helps identify the building blocks of a firm's core competencies, (the) _ enables managers to see how competitive advantage flows from the firm's distinct set of activities

resource-based view; value chain perspective

_ can be cash, buildings, or intellectual property

resources

core competencies are created through the interplay of _ and _

resources; capabilities

profits that can be reinvested back into the firm to upgrade the firm's resources are

retained earnings

the most commonly used profitability metrics in strategic management are

roe, roa, return on invested capital

According to the _ perspective of competitive advantage, what matters most is return on money provided to buy an equity share (risk capital)

shareholder

The culture of Zappos is hard to imitate because it consists of interactions among employees, processes, procedures, norms, and creating _

social complexity

_ describes situation in which different social and business systems interact with each other

social complexity

a customized strategy that considers the unique resources of the company while strongly considering the external environment is said to create

strategic fit

A firm trying to compete with the leading firm in a competitive industry can try to negate the leading firm's competitive advantage by

substitution, direct imitation