CH 4 - Internal Analysis: Resources, Capabilities and Core Competencies

Primary activities include which of the following?

- Operations - Supply Chain Management

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

- Substitution - Direct imitation

What does the concept of resource immobility imply?

- That resource differences between firms can last a long time - That it is difficult to reproduce the set of resources that a firm lacks in comparison to another firm

Resource heterogeneity

- Comes from the insight that bundles of resources, capabilities and competencies differ across firms. - This insight ensures that analysts look more critically at the resource bundles of firms competing in the same industry because each bundle is unique to some extent.

Resource immobility

- Describes the insight that resources tend to be "sticky" and don't move easily from firm to firm. - The resource differences that exist between firms are difficult to replicate and can last a long time.

The VRIO Framework

- Identifying certain types of resources as key to superior firm performance - Valuable - Rare (and costly to...) - Imitate (firm itself must be) - Organized (to capture the value of the resource)

A resource is considered valuable in which of the following situations?

- The resource helps a firm exploit an external opportunity - The resource helps the firm increase its economic value creation (V-C)

Which of the following statements are true about the capabilities of a firm?

- They include organizational skills - They include managerial skills - They concern the deployment of resources

Core competencies

- Unique strengths, embedded deep within a firm - Allow the firm to differentiate its products and services from those of its rivals - Creates higher value for the customer or offering products and services of comparable value at lower cost - Offer products of comparable value at lower cost than rivals can - Competitive advantage can be driven by core competencies

In order to be successful, a firm must have a resource that is valuable, rare, costly to imitate, and the firm must __________.

Be organized to capture value

_______________ are organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically.

Capabilities

All of the following are examples of activities that create value, except ___________.

Closely monitoring the firm's stock price

Core ________________ are generated by the interaction of resources and capabilities.

Competencies

T/F: The value chain concept is applicable only to high-tech firms in rapidly changing environments.

False

Using the "resource-based view" helps firms ______________.

Gain or maintain competitive advantage

Strategic fit __________ the likelihood that a firm is able to gain a competitive advantage.

Increases

___________ resources take a long time for a firm to build.

Intangible

Which of the following is not an example of a resource for a firm?

Legal Liabilities

The SWOT analysis should be used with caution because _____________.

Opportunities can be threats and strengths can be weaknesses.

Marketing, sales and distribution are ___________ activities in a firm's value chain.

Primary

A resource is _______________ if the number of firms that possess it is less than the number of firms required to reach a state of perfect competition.

Rare

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

SWOT analysis

Research and development, information systems and human resources are examples of _____________ activities.

Support

________ resources have physical attributes and are visible.

Tangible

In performing a SWOT analysis to generate insights from external and internal analysis, internal strengths and weaknesses can be determined by applying ____________________ and external strengths can be evaluated in part by applying _________________.

The VRIO framework; PESTEL

The resource-based model views resources as ______________.

The main driver of firm performance

A resource is considered _________ if it helps a firm to deal with an external threat.

Valuable

Which of the following identifies the resources that can lead to a competitive advantage?

VRIO framework

According to the value chain perspective, ____________ are located in the network that connects different, but related activities within a firm.

Core competencies

According to the VRIO framework, a rare resource is ___________ if firms that do not possess the resource are unable to develop or buy the resource at a comparable cost.

Costly to imitate

The firm's internal activities to transform inputs into outputs consist of ______________ activities, which add value directly, and ________________ activities, which add value indirectly.

Primary; Support

According to the ___________-based view, firms are a distinctive collection of resources, capabilities and competencies.

Resource

Which of the following is true according to the assumption of resource heterogeneity?

Resource bundles vary from company to company.

According to the __________ view of a firm, "resources" are defined as any asset, capability, or competency that a firm can draw upon when formulating and implementing strategy.

Resource-based