Strategic Management Quiz 6 Exam 1

A firm's resource is most likely to be an internal strength and a core competency when the resource is: a. easily accessible and mobile. b. easy to substitute. c. valuable but common. d. valuable and costly to imitate.

d. valuable and costly to imitate.

Which of the following is NOT a condition that can help a firm sustain its competitive advantage? a. When past decisions act as constraints for the current dynamic capabilities b When the resource advantage can only be imitated after a long period of time c. When the source of the competitive advantage is causally ambiguous d. When managers have consistently better expectations about the future value of resources

a. When past decisions act as constraints for the current dynamic capabilities

According to the _____, competitive advantage is the outflow of a firm's 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. a. dynamic capabilities perspective b. value chain perspective c. expectancy theory d. two-factor theory

a. dynamic capabilities perspective

The competitive advantage that one firm has will be short-lived in an industry in which: a. perfect competition exists. b. resource immobility is high. c. capabilities of a firm are not easily replicable. d. resource heterogeneity is high.

a. perfect competition exists.

A critical assumption in the resource-based model of a firm is_____, the notion that resource differences that exist between firms are difficult to replicate. a. resource immobility b. resource homogeneity c. resource perishability d. resource equality

a. resource immobility

Which of the following statements accurately brings out the difference between tangible and intangible resources? a. Tangible assets are difficult to imitate, whereas intangible assets can be easily replicated. b. Tangible resources take a longer time to build, whereas intangible assets can be built comparatively easily. c. Tangible assets can be bought on the open market, whereas intangible assets cannot be easily purchased. d. Tangible resources contribute to a company's competitive advantage, whereas intangible resources fail to do the same.

c. Tangible assets can be bought on the open market, whereas intangible assets cannot be easily purchased.

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. However, reverse social engineering to crack Zappos' code of success might be much more difficult for a company trying to exactly imitate its strategy. Thus, the source of Zappos competitive advantage is said to be _____. a. non-substitutable b. inexhaustible c. socially complex d. non-ambiguous

c. socially complex

During market testing, Elixir Cosmetics (EC) realized that the cosmetics industry was dominated with multiple, well-established brands. These brands mostly sold their products in exclusive outlets and departmental stores. A new entrant like EC would require a different business model to be successful. Thus, EC started selling its products through direct marketing. In this scenario, Elixir Cosmetics accomplished substitution primarily through _____. a. knowledge diffusion b. path dependence c. strategic equivalence d. technology transfer

c. strategic equivalence

BioTree Inc. has used $350,000, from its total annual earnings of $1,250,000, to invest in the research and development of a multi-purpose vaccine. Its account receivable from customers is estimated to be $150,000 and accounts payable $80,000. In monetary terms, what would BioTree Inc.'s resource flows be? a. $80,000 b. $1,250,000 c. $150,000 d. $350,000

d. $350,000

Creating resources that meet the VRIO criteria is strategically important to a firm because it: a. helps the firm curb its resource heterogeneity and resource immobility. b. leads to competitive parity within the industry. c. facilitates greater knowledge diffusion in the industry. d. helps the firm to gain and sustain a competitive advantage.

d. helps the firm to gain and sustain a competitive advantage.