Unit 1 Chapter 5

Step 2 of the process of identifying a sustainable competitive advantage involves splitting the list of assets into which of the following two categories?

+Standard assets + Unique assets

As a business grows, it gets progressively less difficult to change its direction.

False

Which of the following are examples of the impact of the mission statement?

- The mission will impact the market in which the firm will compete. -The mission may impact how broad a geographic range the firm will serve. -The mission will impact the major ways in which the firm will compete.

Which of the following statements are true regarding the rarity of a resource?

-A resource can be considered rare if it is matched by one competitor. -Judgments about how rare a resource may be are qualitative -If a resource is rare, it is considered unique.

Implementing a strategy is about:

-Alignment within the business -Fit within the business

List the steps in identifying a sustainable competitive advantage for a business in the order starting from step one to step three.

-Develop a list of the assets and capabilities of one's business -Break the list of assets and capabilities into two groups: standard and unique. -Evaluate the unique resources/capabilities of one's business.

Which of the following are steps in identifying a sustainable competitive advantage?

-Develop a list of your business assets and capabilities -Break the list into two groups: standard and unique. - Evaluate the unique resources/capabilities

What are the characteristics of a substitute that an entrepreneur should evaluate for every resource and capability of his or her business?

-The substitute satisfies the same basic need that is satisfied by his or her product or service - The substitute is evaluated based on its similarity to the entrepreneur's unique resource and capability

How is the durability of a new firm's unique resource or capability evaluated by the entrepreneur?

By analyzing whether the competitors of the firm would actually try to match the firm

What is the first step in identifying a sustainable competitive advantage?

Develop a list of assets and capabilities.

Step 3 in the process of identifying a sustainable competitive advantage involves:

Evaluating the competitiveness of unique resources and capabilities.

As a business grows, the degree of difficulty in changing direction ____.

Increases progressively

If the mission statement is so clear that it tells everyone exactly what the firm does and by definition what the firm does not do, which key characteristic of its development does it satisfy?

Keep it specific.

A firm's ____ statement is a brief statement that summarizes how and where the firm will compete.

Mission

What is a brief statement that summarizes how and where the firm will compete?

Mission statement

The ___ is the foundation on which the firm's ___ is built.

Mission; strategy

Match the features of a mission statement with their descriptions.

Short - The statement should be able to fit on a coffee mug. Simple- Everyone in the company should be able to learn and understand the mission. Applicable- The statement should be able to guide every individual in the company Specific- The statement clearly tells everyone what the company does. Measurable- Metrics for every part of the statement can be developed

If a resource is matched by more than one competitor, then it is not rare and is simply the ____ expectation in the industry.

Standard

Most capabilities and assets listed by the firm are _____ for the industry.

Standard

Which step involves developing a complete list of tangible and intangible assets?

Step 1

Which step involves splitting the list of tangible and intangible assets into standard and unique assets?

Step 2

Which step in the process of identifying a sustainable competitive advantage involves evaluating the competitiveness of unique resources and capabilities?

Step 3

Implementing a(n) ____ is about fit and alignment within the business.

Strategy

The firm's _____ is how the firm plans to use the competitive advantage of the business to accomplish its mission.

Strategy

A(n) _____ ______ _____ is a set of advantages that provides a firm with the opportunity to make money where other businesses cannot easily copy that firm's advantages.

Sustainable competitive advantage

What is a set of advantages that provides a firm with the opportunity to make money where other businesses cannot easily copy its advantages?

Sustainable competitive advantage

Before the founders can start building their new business, they must be clear about where and how they will compete.

True

Along with being rare, durable, and not easily substituted, the resource must also be ____, which means the customer is willing to pay extra because of the uniqueness.

Valuable

If the customer is willing to pay extra because of the unique resources and/or capabilities, then it is considered ____.

Valuable

The evaluation of the ___ of a new business's competitive advantage is done by the entrepreneur by estimating the amount of time it would take for his or her business competitor to match the firm in a particular area.

durability

For every resource and capability that an entrepreneur determines to be indeed rare, the entrepreneur should initially evaluate the _____.

market for a close substitute