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