Business Strategy Chapter 4

external threat

All purpose Tires, Inc. is planning to build a manufacturing plant in Tornado Alley. according to the SWOT analysis, this location is considered to be an

supports activities

Chat Zone Inc., a telecommunication company, had been drastically losing its market share due to tough competition in the industry. ChatZone Inc. can best solve its problem by working on its

incremental

Each activity a firm performs along the horizontal value chain adds ______ value

$350,000

GreenHarvest Inc. has used $350,000 from its total annual earning of $1,250,000 to invest in the research and development of a multi-purpose vaccine. In monetary terms, what would GreenHarvest Inc.'s resource flows be?

isolating mechanisms

____________ are barriers to imitation that prevent rivals from competing away the advantage a firm may enjoy

if managed effectively, existing core competencies can help sustain the competitive advantage indefinitely

when evaluating the sustainability of a firms competitive advantage, which of the following statements is not true?

when past decisions act as constraints for the current dynamic capabilities

which of the following is not a condition that can help a firm sustain its competitive advantage

core competencies

A resource-based view of a firm provides a model that systematically aids in identifying

core rigidity

Clean Rinse Shampoo has been the leader of hair cleaning products for about 40 years. as a result, other shampoo companies that began to offer organic shampoo gained a competitive advantage over Clean Rinse. This case is an example of

short lived

Dynamic capabilities are essential for moving beyond a(n) ______________ advantage

it is likely that BC inc. is better enabled than GN corp. to gain and sustain a competitive advantage

GN corp. and BC inc. are two competing firm in the same industry. what can be concluded form this information?

primary activity

IN a generic value chain, a firms after sales service will be referred to as its _____________

SWOT analysis

Juanita, a manager at a multinational organization, is trying to carefully scan and link the firms internal environment to its external environment. which of the following managerial tolls is Juanita employing?

resource immobility

Kaleidoscope inc is a leading international apparel company. which of the following assumptions of the resource based model of competitive advantage does this scenario best illustrate?

rare

Next Door cellular is a leading mobile network operator. the companys brand name is the only resource that distinguishes it from the other operators. this unique asset that has helped the company gain a competitive advantage will be considered as a(n) ______________ resource in the VRIO framework.

path dependence

Nova Electronics, a leading pager manufacturer, recently declared itself bankrupt. this was attributed to a decision the company made in the past. which of the following does this scenario best illustrate?

yes, because the new packaging made the product more attractive in the eyes of consumers

Rice Dazzle Inc. has been making the same breakfast cereal for 50 years. sales have plummeted. According the the VRIO framework, is the new packaging a valuable resource for Rice Dazzle?

the land owned by Riya, which reduces cost of operations

Rya has recently started a restaurant in a commercial area where there are many other established restaurants an popular fast food chains. Rita has also invested a huge amount on the interiors of the restaurant and in equipping the kitchen with the latest appliances used by her competitors. in their scenario, which of the following is the most valuable resource for Riya's business?

resource immobility

SWA has enjoyed a sustained competitive advantage, allowing it to outperform its competitors over several decades. Continental and Delta attempted to copy SWA with their offering of Lite and Song. which of the following is this case an example of?

the expertise acquired by the employees in the company

Smooth Fusion inc. is a software company, which has built and acquired numerous assets over the years. according to the resource-based view of a firm, which of the following assets of Smooth Fusion inc. will best enable it to gain and sustain a competitive advantage?

perfect competition exists

The competitive advantage that one firm has will be short lived in an industry where

groupons competency was not hard to imitate

The share price of Groupon, a daily deal website, fell by 90% just a year after its successful initial public offering. which of the following is the most accurate inference from this example?

inferior results

To gain a competitive advantage, Lopez Industries obtained financing and then used this extra capital to produce the same amount of gaskets in a one month period that it normally produces in a two-month period. which of the following is the most likely outcome of this endeavor?

contribute to the firms strategic position as either low cost leader or differentiator

To help a firm achieve a competitive advantage, each distinct activity performed in the value chain needs to

casual ambiguity

___________ describes a situation in which the cause and effect of a phenomenon are not readily apparent

valuable and costly to imitate

a firms resource is most likely to be an internal strength and core competency when the resource is

casual ambiguity

a firms resources and capabilities are costly to imitate. this is because rival companies do not clearly understand the relationship between the resources and capabilities controlled by the firm. in this case, the firms competitive advantage is protected against imitation by

valuable, rare, costly to imitate

according to the VRIO framework, a firm can gain a competitive advantage if it has resources that are ________ and captured by an organized firm

strategic decision have long term consequences

due to pat dependence

resource differences between firms last for a long time

due to resource immobility, a critical assumption in the resource based model of a firm, the

shift quickly

dynamic capabilities are especially relevant for surviving and competing in markets that

it makes it difficult for the competitors to understand why a company has been so successful

how does casual ambiguity act a an isolating mechanism for organizations

casual ambiguity

it is difficult even for Apples managers to pinpoint the underlying cause of the comp nays phenomenal success. the term that best applies to this difficulty is known as

capabilities

organizational and managerial skills that find their expression in a comp nays structure, routines, and culture are referred to as

Bass Automobiles Inc. faced resource leakage

several senior managers recently left Bass Automobile Inc. and went to work at Unicorn Autos Inc., a rival company. what does this imply?

the companys machinery

the management of a company is assessing the value of all the tangible resources the company owns. which of the following will be included in this assessment?

all firms have access to the same resources

the perfectly competitive industry structure differs from the resource based model in its view that

internal activités a firm engages in when transforming inputs into outputs

the value chain describes the

primary activity

to increase its competitive advantage, HRV automobiles seeks to improve the efficiency of its production plants. by doing this, HRV is addressing a ______________ in the value chain analysis

Kristins cosmetics attempted to imitate how Monicas Makeup combined its management and product development systems with little success

which of the following best exemplifies social complexity as an isolating mechanism?

the value chain concept can be applied to all firms, including service firms

which of the following is an accurate statement about value chain analysis?

the firms organizational culture

which of the following is an example of a firms intangible resources?

PESTEL analysis

which of the following management tools will help determine the external opportunities and threats that affect a firm?

VRIO framework

which of the following management tools will help determine whether a firms resources, capabilities, and competencies are strengths or weaknesses?

reputation for quality

which of the following resources is a firms resource stock?

tangible assets can be bought on the open market, whereas intangible assets cannot be easily purchased

which of the following statement accurately brings out the difference between tangible and intangible resources?

firm will have a sustained competitive advantage because of its unique resources

In the context of the resource based model of competitive advantage, if a successful firm exhibits resource immobility it means that the

True 3 Inc. has been able to outperform its competitors because the uniqueness of its resources is difficult to replicate

In the context of the resource based model of competitive advantage, which of the following scenarios best exemplifies resource immobility?

resource heterogeneity

Althouse True Ion inc. and One Electro Inc operate in the same consumer electronic industry, True ion inc has better sales and brand equity. which of the following critical assumptions of the resource-based view of a firm has been illustrated?

core competency

Amazon.com's ability to provide the largest selection of items online, combined with superior IT systems and customer service, can be referred to as its

better expectations of fire resource value

Ambrosia Inc., a leader chocolate producer anticipated that the prices of cocoa beans would double in less than three years. this would disrupt the availability of cocoa in the industry. which of the following isolating mechanisms does this scenario best illustrate?

socially complex

An observer may conclude that the organizational culture of Zappos, an online retailer for shoes and clothing might be the basis for its competitive advantage. thus, the source of Zappos competitive advantage is said to be

the change in content delivery from ownership via downloads to streaming on demand

Apple paid $3 billion dollars to acquire Beats. This is the largest acquisition in Apples history. which of the following provided a reason for this acquisition?

resource immobility

As a result of ____, a critical assumption in the resource based model of a firm, the resource difference that exist between firms are difficult to replicate.

it created a perception that owning its products was cool

Beats Electronics has been able to outperform Audio- Technica, Bose, JBL, Skullcandy, Sennheiser, and Sony in the high end, premium headphone market. which of the following statements accurately explains one of the main reasons for the success of Beat?

casual ambiguity

Competitors have found it extremely difficult to imitate Gene Electronics inc valuable resources, capabilities, or competencies. Gene Electronics inc has been protected from losing its competitive advantage as a result of

brand name

Coral Think inc. is a new company in the publishing industry. it has raised sufficient capital from multiple sources. it is planning to use its capital to purchase certain assets. which of the following assets will be the most difficult for Coral Think inc to acquire using its capital?

valuable

Crystal Tech Inc.'s competency in designing and manufacturing efficient microprocessors has made its laptops the most advanced computer in the market. Thus Crystals competency in designing and manufacturing microprocessors will be considered a(n) _____ resource in the VRIO framework.

strategic equivalence

During market testing, Sensation Cosmetics (SC) realized that the cosmetics industry was dominated with multiple well established brands. A new entrant like SC would require a different business model to be successful. Thus, SC started selling its products through direct marketing. In this scenario, Sensation Cosmetics accomplished substitution primarily through

using its internal strengths to exploit external opportunities

In the context of SWOT analysis, a firm can develop an offensive strategic option primarily by

core competency

Dandelions Max is a consumer electronics company. they have an edge over its competitors through its ability to provide breakthrough technology at the lowest price in the market. this advantage of Dandelions Max best exemplifies a

EasyOpen's patent expired after 20 years

EasyOpen Inc. gained a patent for an electronic corkscrew. which of the following would most likely be the reason for this development?

a firm must be effectively organized to capture value

Even though many valuable, rare, and inimitable resources were generated at Xerox's Palo Alto Research Center (PARC), the management at Xerox's headquarters failed to gain a competitive advantage by exploiting the breakthrough in computing software and hardware. what is the most likely implication of this example?

the companys chemical patents

Gene Craft Inc. is the market leader in the pharmaceutical industry. most of their resources are common to those of its competitors a few rare resources have helped the company gain and sustain a competitive advantage. which of the following assets of Gene Craft inc. is most likely to be considered a rare resource that is best contributing to its competitive advantage?

internal strengths change with its external environment in a dynamic fashion

Given the accelerated pace of technological change, in combination with deregulation, globalization, and demographic shifts, a firm will only be successful today if its

any advantage that one firm has will be short lived

Home Value inc., Max Cart inc., and Nice Necessities Inc are three consumer-product retailing companies. their products consist primarily of day to day items that are easy to imitate and sell. which of the following is an implication of the market condition indicated in the scenario?

Invoro will have a resource that is valuable but no longer rare

If Finolo and Ethver, companies that manufacture TV's develop the same customer knowledge base and create products that provide the same customer appeal as Invoro, a market leader in consumer electronics, then

low

In knowledge intensive industries, the marginal costs after initial invention are

an increase in its customers' disposable income

In the context of SWOT analysis, which of the following best exemplifies a firms external opportunity?

knowledge and culture take time to develop and are generally difficult to imitate

Intangible assets add great value to a firm primarily because the firms

Onyxo Inc. should start working on LED and 3D TV technologies to adapt its core competency to suit the external environment

Onyx Inc. a consumer electronics company is the leading manufacturer of LCD televisions. according to the dynamic capabilities perspective, what should Onyx Inc. do?

production systems that reduce costs by 30% below the current industry standards

Otion inc. is a relatively new firm in the consumer electronics industry. the company primary objective is to become the market leader in less than 5 years, for which it has to gain and sustain a competitive advantage. int eh context of the VRIO framework, which of the following resources should Otion inc. primarily focus on the achieve its objective?

it results in a reduction in the company's intangible resource stocks

which of the following is an implication of high employee turnover in a company?

time cannot be compressed at will

Path dependence rests on the notion that

direct imitation

Pulse Mobiles Inc. is a cell phone manufacturing company. Its latest range of smartphones bears a straight resemblance to the Y series range of smartphones fro Talkie Gen inc. in terms of its shape and look and feel.which of the following strategies has Pulse Mobiles Inc. used to replicate the valuable and rare resource of Talkie Gen Inc.?

the SWOT analysis

____________ allows managers to synthesize insights obtained from an internal analysis of a comp nays strength and weaknesses with those from an analysis of external opportunities and threats

best selling novel; screenwriters experience adapting novels

Superlative Productions spent 10 million dollars to buy the rights to a best-selling novel. Which of the following pairs of resources are both intangible?

rare

The "Gold Crisps" potato wafers manufacture by True Foods Inc. have been the highest selling wafers in the market. This competency of True Foods Inc. will be considered as a(n) _____________ resource in the VRIO framework.

the competition infringed on Gogo's patent of the "diagonal assembly system."

The "diagonal assembly system" was a production system pioneered by the automobile company GOgo. Recently GOgo was able to sue a competitor and won the suit, thereby receiving $100 million in damages. which of the following would most likely enable Gogo to win such a lawsuit?

resource bundles of firms competing in the same industry are unique to some extent and thus differ from one another

The resource-based view of a firm assumes that the

path dependence

_______________ describes a process in which the options one faces in a current situation are limited by decisions made in the past

scan a firms internal and external environments

To make the SWOT analysis an effective management tool, a strategist must first

high costs involved in imitation

True Moto Corp. (TMC) is a leading automobile company. the company has been able to sustain its competitive advantage primarily due to its high quality and efficient electronic motors. which of the following resource attributes listed in the VRIO framework has helped TMC sustain its competitive advantage?

the resources of Trust Machines Inc. are difficult to replicate or imitate

Trust Machines inc. is a company that manufactures and markets consumer electronics. according to the resource based view of competitive advantage, which of the following is an implication of this situation?

path dependence

VRD systems inc. took many decades to build its core competencies, and these competencies were based primarily on the decisions made by the company's top management in the past. this process is called

social mobility

Value Autos Inc. has been trying to directly copy the strategies of Honk Autos Inc. even though it is evident that Honk success comes fro its just in time inventory system. which of the following barriers to imitation does this scenario best illustrate?

to compete with Build Your Owns model of the Eiffel Tower, Best Replica came out with a model of the Leaning Tower of Pisa

Which of the following provides an example of how a firms valuable resource can be imitated?

easy to imitate

With regard to the VRIO framework, Crocs shoes was unable to sustain its competitive advantage primarily because its products were

dynamic capability

_________ describe a firms ability to create, deploy, modify, reconfigure, upgrade, or leverage its resources over time in its quest for competitive advantage.

core competencies

__________ are best described as unique strengths, embedded deep within a firm, that allow a firm to differentiate its products and services from those of its rivals, creating higher value of the customer or offering products and services of comparable value at lower cost

it is the firms level of investments to maintain or build a resource

which of the following statements accurately describes a firms resource flow?

fit between its internal strengths and the external environment is static

a firm will fail to create a sustained competitive advantage when the

dynamic capabilities perspective

according to the _______, competitive advantage in the outflow of a firms ability to modify and leverage its resource base in a way that enables it to gain and sustain competitive advantage in a constantly changing environment

marketing and sales

according to the value chain analysis, which of the following is a primary activity?

helps the firm to gain and sustain a competitive advantage

creating resources that meet the VRIO criteria is strategically important to a firm because it

in perfect competition, all firms have access to the same capabilities, whereas in the resource based model, resource differences exist between firms in the same industry

how are the critical assumptions of the resource based model of a firm fundamentally different from the way in which a firm is viewed in the perfectly competitive industry structure?

it will result in perfect competition

if a resource is common

the firm will be able to maintain a competitive advantage for a long period

if a resource is rare or unique to a particular firm, then

decline in the firms market share

in the context of SWOT analysis, which of the following best exemplifies a firms internal weakness?

increase in a firms customer loyalty

in the context of the SWOT matrix, which of the following best exemplifies a firms internal strength?

Resource stocks are a firms current level of intangible resources

which of the following statements accurately describes a firms resource stock?

bundles of resources, capabilities, and competencies differ across firms

which of the following statements correctly describes resource heterogeneity?

a firms competitive advantage is derived from static resource or market advantages

which of the following statements fails to bring out the essence of the dynamic capabilities perspective

time compression diseconomies

when the laptop market overtook the desktop market, Blue tech inc., a leader in desktop technology was left at a competitive disadvantage. the company failed because most of its competitors had already been in the laptop market for five years. Blue Tech incs. models were inferior to the ones in the market. in this scenario, Blue Tech inc. failure can be best attributed to

resources are tangible and intangible; capabilities are intangible

which of the following accurately summarizes the difference between the resources and capabilities of a firm?

the local fast food chain Easy Hot Dogs used its wholesome image to maintain its competitive advantage against stiff competition

which of the following applies to the Strength- Threats quadrant of the SWOT matrix?

IBM successfully transformed itself multiple times in the data information industry over a period of more than 100 years

which of the following best explains why IBM has been able to maintain its competitive advantage?

better expectations of future resource value

which of the following describes a situation in which firms acquire resources at a low cost, laying the foundation for a competitive advantage later?

A problem with this framework is that a strength can also be a weakness, and that an opportunity can also simultaneously be a threat

which of the following is a drawback of the SWOT analysis?

assets such as landing and building owned by a firm

which of the following is an example of a firms resources?