Chapter 4 MGT 401

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

capabilities

According to the VRIO framework, in order for a firm to gain a temporary competitive advantage, a resource must be at least both ______.

rare and valuable

Identify the framework that allows managers to synthesize insights obtained from internal and external analysis.

SWOT analysis

______ resources have physical attributes and are visible.

Tangible

In the dynamic capabilities perspective, competitive advantage derives from ______.

actively modifying of the resource base

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

primary

Competitive advantage is gained in the value chain through which of the following types of activities?

primary support

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

Path dependence

The VRIO framework is used to evaluate a firm's resources. VRIO is an acronym for which of the following?

Rare Valuable Imitate

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

Resource bundles vary from company to company.

A core competency can help a company achieve which of the following?

to create higher value for the consumer to differentiate its products and services to offer products of comparable value at lower cost than rivals can

VRIO resources can lay the foundation of a competitive advantage, no competitive advantage can be sustained indefinitely.

True

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

valuable

___ suggests that sometimes even random events may have a large impacts on an outcome.

Path dependence

The value chain describes ______ of a firm.

internal activities

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

VRIO framework

The resource-based model views resources as ______.

the main driver of firm performance

How are intangible resource stocks acquired?

through investments over time in intangible resources

A firm's attempts to shorten the length of time a process takes, may lead to disappointing outcomes because of ______.

time compression diseconomies

Isolating mechanisms are considered to be ______.

barriers to imitation

Which of the following were resources and capabilities that helped Five Guys gain a competitive advantage and develop into a successful restaurant chain?

Carefully choosing the supplier of the potatoes for their fries Focusing on such details as store layout and design

______ describes a situation where the cause and effect of a phenomenon are not readily apparent.

Causal ambiguity

What are the characteristics of a strategic activity system as it applies to firms?

It is socially complex. It consists of interconnected activities. It is causally ambiguous.

Which of the following best describes the core competency of the Five Guys Burgers and Fries company?

Making high-quality burgers without limiting costs

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

Resource flows

___ comes from the insight that bundles of resources, capabilities, and competencies differ across firms.

Resource heterogeneity

______ are any assets that a firm can draw on when formulating and implementing a strategy.

Resources

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.

A firm's network of interconnected activities is referred to a strategic activity system because activities that are interconnected are very difficult for competitors to copy effectively.

True

According to the resource-based model, a firm is assumed to be a unique bundle of resources, capabilities, and competencies.

True

The ______ is a theoretical model that explains and predicts what resource attributes underpin competitive advantage. It identifies which types of resources are key to firm performance.

VRIO framework

Capabilities include which of the following?

a company's organizational structure a company's routines a company's culture

A customized strategy that considers the unique resources of the company while considering the external environment creates ______.

a strategic fit between them

According to the dynamic capabilities perspective, competitive advantage stems from a firm's ability to ______.

agilely transform its resource base

"Time compression diseconomies" refers to the concept that ______.

attempting to get a good outcome in less time tends to be ineffective

Time compression diseconomies occur when a firm ______.

attempts to reach an outcome in a reduced amount of time

According to the VRIO framework, to fully exploit the competitive potential of its resources, capabilities, and competencies, a firm must ______.

be organized to capture value

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

Susan is a consultant for a grocery store chain that wants to open several new stores in the St. Louis area. She has selected several sites for the company to consider based in part on projected population growth near those sites. What isolating mechanism does this best illustrate?

better expectations of future resource value

What do the best firms in an industry seek to identify and manage on an ongoing basis as sources to respond to their external environment?

capabilities resources core competencies

Which of the following are examples of resources for a firm?

cash intellectual property buildings

Cowgirl Boots, inexpensive leather boots for women, are selling at record-high numbers. The CEO of the company, however, cannot figure out why. Was it caused by the company's recent advertisement campaign or the newly reduced price of the boots or some other unknown factor? Based on this information, what concept describes the CEO's confusion regarding Cowgirl Boots' recent success?

causal ambiguity

A(n) ______ is a unique strength, embedded deep within a firm, that is critical to gaining and sustaining competitive advantage.

core competency

If a firm's resource is valuable, rare, costly to imitate, and the firm is organized to exploit it, this resource is a ______.

core competency

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

For a firm to sustain any competitive advantage over time, the fit between its internal strengths and external environment needs to be ______.

dynamic

The ______ perspective is a model that emphasizes a firm's ability to modify and leverage its resource base in a way that enables it to sustain competitive advantage in a constantly changing environment.

dynamic capabilities

What are examples of intangible resource stock a company may have?

engineering expertise dynamic capabilities reputation for quality

The purpose of a SWOT analysis is to ______.

form a strategy that is tailored to the firm's unique strengths and weaknesses and the opportunities and threats in its environment

If the problem with a business strategy results in causal ambiguity, managers will ______.

have a difficult time developing a theory to deal with the problem

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

increases

In contrast to primary activities, support activities add value ______, but are necessary to sustain primary activities.

indirectly

A firm's culture, brand equity, and intellectual property are examples of ______.

intangible resources

Which isolating mechanism is set up to legally prevent companies from copying products that give a firm a competitive advantage?

intellectual property protection

When strategizing about possible competitive advantages, a major advantage of the SWOT analysis is that it allows managers to simultaneously consider ______.

internal and external factors

Intellectual property protection and social complexity are examples of mechanisms, which help a firm sustain a competitive advantage.

isolation

The SWOT analysis should be used with caution because ______.

opportunities can be threats and strengths can be weaknesses

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

path dependence intellectual property protection better expectations of future resource value

Better expectations of future resource value ______ a firm's competitive advantage.

positively impact

The internal activities of a firm that for transforming inputs into outputs consist of activities, which add value directly, and activities, which add value indirectly.

primary; support

The core competencies of a business are generated by the interaction of Blank______.

resources and capabilities

The concept of social complexity suggests that ______.

social and business systems that work for one firm may be hard to imitate because of complex interactions between these systems

The culture of Zappos is hard to imitate because it consists of numerous, diverse interactions among its employees, processes, procedures, and norms, that create which of the following?

social complexity

The interaction of the many individual systems in the operation of a company often leads to causal ambiguity because of ______.

social complexity

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

take results from the SWOT analysis with "a grain of salt"

Unlike capabilities, resources can be both ______.

tangible and intangible

The resource-based view classifies all resources as ______.

tangible or intangible

What does the concept of resource heterogeneity imply?

that each firm has different resources

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

Which of the following is not considered an isolating mechanism?

uncertainty about future resource value