Strategic Management Test 1

What are the different forms of imitation?

-direct imitation:-bells and whistles: adding stuff to the product/service -stripping: taking things away from the product to make it diff-subsitution:

How are resources, capabilities, and core competencies related to each other? How does the VRIO framework apply to them?

Resources are combined to make capabilities. those capabilities serve as a competitive advantage which are called core competencies valuable (V), rare (R), and costly to imitate (I). The firm must also be able to organize (O) in order to capture the value of the resource. A resource is valuable (V) if it allows the firm to take advantage of an external opportunity and/or neutralize an external threat. A resource is rare (R) if the number of firms that possess it is less than the number of firms it would require to reach a state of perfect competition. A resource is costly to imitate (I) if firms that do not possess the resource are unable to develop or buy the resource at a comparable cost The firm is organized (O) to capture the value of the resource if it has an effective organizational structure, processes, and systems in place to fully exploit the competitive potential.

What are resources, capabilities and core competencies?

Resources: -Inputs to the firms production process-the firm combines individual tangible and intangible resources to create capabilities Capabilities: used to complete the orginzational tasks required to produce, distribute, and service the goods or services the firm provides to customers for the purpose of creating value for them Core Competencies: capabilities that serve as a source of comp adv for a firm over its rivals

Know the difference between tangible and intangible resources.

Tangible resources have physical attributes and are visible.Intangible resources have no physical attributes and are invisible.Competitive advantage is more likely to be based on intangible resources.

How can dynamic capabilities enable a firm to sustain a competitive advantage?

The reason reinvesting, honing, and upgrading of resources and capabilities are so crucial to sustaining any competitive advantage is to prevent competencies from turning into core rigidities. This ability to hone and upgrade lies at the heart of the dynamic capabilities perspective. We defined capabilities as the organizational and managerial skills necessary to orchestrate a diverse set of resources and to deploy them strategically. Capabilities are by nature intangible. They find their expression in a company's structure, routines, and culture

what are the assumptions of the resource based model

Two assumptions are critical in the resource-based model: (1) resource heterogeneity and (2) resource immobility.12 What does this mean? In the resource-based view, a firm is assumed to be a unique bundle of resources, capabilities, and competencies. The first critical assumption—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 (or even the same strategic group), because each bundle is unique to some extent

Key elements of IO based model

external environment, an attractive industry, strategy formulation, assets and skills, strategy implementation, superior returns

These are the key elements of the value chain analysis and how is it related to strategic activities like outsourcing

primary activities Firm activities that add value directly by transforming inputs into outputs as the firm moves a product or service horizontally along the internal value chain. ■Supply chain management. ■Operations. ■Distribution. ■Marketing and sales. ■After-sales service. Other activities, called support activities, add value indirectly. These activities include support activities: Firm activities that add value indirectly, but are necessary to sustain primary activities. ■Research and development (R&D). ■Information systems. ■Human resources. ■Accounting and finance. ■Firm infrastructure including processes, policies, and procedures.

Key elements of resource based model

resources, capability, competitive advantage, an attractive industry, strategy implementation, superior returns