4800 Ch 456

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

VRIO Framework

VRIO Framework

Value, Rarity, Imitability, Organization

book value

a firm's actual costs of assets - depreciation

when competitive advantage is assessed from an analysis of publicly available data, a firm measures its

accounting profitability

support activities

add value indirectly, but are necessary to sustain primary activities

business model

allows firms to describe how they turn strategy into action

dynamic capabilities can be described as

an intangible resource

resources

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

answering the balanced scorecard question of how we create value challenges managers to develop strategic objectives that ensure

future innovation future competitiveness future organizational learning

core competencies

generated by the interaction of resources and capabilities

in which of the following ways did Dr Dre build the coolness factor of Beats as a core competency

getting endorsements from popular athletes and celebrities using his fame as a music producer

a company's stock price increases if the company

grows faster than expected

what should a firm do in order to be organized to capture value

have good coordinating systems have a good organizational structure

tangible resources

have physical attributes and are visible

value chain perspective

helps leaders understand how competitive advantage arises from the firm's unique activities

strategic fit

increases the likelihood that a firm is able to gain a competitive advantage

isolating mechanisms examples

intellectual property protection social complexity

strategic leaders use internal and external analyses in tandem to create a customized fit between a company's

internal resources and external environment

concept of resource immobility

it is difficult to reproduce the set of resources that a firm lacks in comparison to another firm resource differences between firms can last a long time

when a firm does favorably compared to similar firms

it outperforms

a firms dynamic capabilities allow

it to respond agilely to market changes create market changes

shareholders

legal owners of publicly traded companies

resource based model views resources as

main driver of firm performance

in order to ensure that a firm is implementing the triple bottom line approach successfully,

managers must audit the company's results in fulfilling its social and ecological obligations

primary activities include

operations supply chain management

path dependence

the effect that an early decision in the development of a firm, such as where the firm is established, can eventually have a major influence on final outcomes.

resource stocks

the firm's current level of intangible resources

resource flows

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

external strengths can be evaluated in part by applying

PESTEL

PESTEL

Political Economic Social Technological Environmental Legal

capabilities are expressed in

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

SWOT analysis

a framework that allows managers to synthesize insights obtained from an internal analysis and external analysis

wholesaling is considered

a traditional model for retail

what can cause an outflow of resources from a firm

turnover of employees forgetting knowledge

competitive advantage

when a firm creates more economic value than competing firms

a firm pursuing a successful differentiation strategy

will have a competitive advantage over a competitor that creates a product at equal cost but with a lower reservation price

dynamic capabilities

training employees constantly so that they are equipped to deal with technological changes and advancements

risk capital

the money a shareholder spends for an equity share in a company

when a trade occurs

the consumer and producer both capture some of the economic value

primary activities

Add value directly in transforming inputs into outputs

resources for a firm

cash PPE intellectual property

which of the following can help a firm extend its competitive advantage

causal ambiguity path dependence better expectations of future resource value

a balanced scorecard offers

common financial metrics and a variety of operational measures on customer satisfaction, internal processes, and the company's innovation and improvement activities

balanced scorecard framework enables managers to

communicate and link the strategic vision translate the strategic vision into operational goals implement feedback and organizational learning design and plan business processes

to determine a product's producer surplus

compare the cost of production to the price charged

benchmarks are useful in determining a firm's

competitive advantage

in the dynamic capabilities perspective

competitive advantage derives from actively modifying the resource base

resource based view clarifies a firm's

core competencies

COGS

cost of goods sold

better expectations of future resource value

positively impact a firm's competitive advantage

perfect competitions in the resource based model

possible if all firms have access to the same resources and capabilities, which means that any competitive advantage acquired by a firm will be brief

freemium model

premium services cost money but basic services are free

producer surplus

profit

when a firm tries to meet the prices of its competitors, it typically sacrifices

profitability per unit

which performance dimensions matter in judging the effectiveness of a firm's strategy

qualitative quantitative

time compression diseconomies

refers to the concept that attempting to get a good outcome in less time tends to be ineffective

resource heterogeneity

refers to the idea that a firm is a bundle of resources and capabilities that is unique to the firm

all accounting data

refers to the past

under the wholesale model

retailers sell goods for any price they want

what are the most commonly used metrics for comparing the performance of different companies

return on equity return on assets return on revenue

ROIC

return on invested capital

SG&A

sales, general and administrative expenses

determine market capitalization

share price * number of outstanding shares

when a firm goes bankrupt

shareholders cannot recover their risk capital

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

social complexity

disadvantages of the shareholder value creation approach

stock prices are influenced by the psychological mood of investors stock prices can be highly volatile overall macroeconomic factors have a direct bearing on stock prices

a balanced scorecard is a tool for

strategy implementation

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

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

managers implement the blueprint of the business model through

culture processes structures

in a subscription based business model

customers pay for access to a product or service

causal ambiguity

describes a situation in which the cause and effect of a phenomenon are not readily apparent

value chain

describes the internal activities a firm engages in when transforming inputs into outputs

which of the following dimensions make up the triple bottom line

ecological economic social

standard dimensions for measuring competitive advantage

economic value shareholder value accounting profitability

to measure firm level competitive advantage

estimate the economic value created for all products and services offered by the firm

balanced scorecard approach helps managers balance

financial and strategic goals

intangible resources

firm's culture brand equity intellectual property

resource based view

firms are a distinctive collection of resources, capabilities, and competencies

a rare resource is costly to imitate if

firms that do not possess the resource are unable to develop or buy the resource at a comparable cost

a resource is considered valuable when

helps the firm increase its economic value creation resource helps a firm exploit an external opportunity

capabilities of a firm

include managerial skills, deployment of resources, and organizational skills

what is true concerning a firm's business model

indicates the way the firm works with buyers and suppliers details the firm's competitive tactics and initiatives essentially explains how the firm intends to make money

for a balanced scorecard to be effective, managers must

manage objectives according to the balanced scorecard approach translate their strategy into measurable objectives formulate an effective strategy for achieving competitive advantage

if the problem with a business strategy results in causal ambiguity

managers will have a difficult time developing a theory to deal with this problem

the balanced scorecard framework draws from

multiple internal and external performance metrics

SWOT analysis should be used with caution because

opportunities can be threats and strengths can be weaknesses

capabilities

organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically

concept of social complexity

suggests that social and business systems that work in one firm may be hard to imitate due to complex interactions between these systems

accounting and finance are

support activities in a firm's value chain

stakeholder theory

a firm exists within an interconnected network of constituencies, both within and outside the organization, and the firm is responsible to these constituencies

according to the efficient market hypothesis, what is embedded in a stock price

a firm's past a firm's current state expectations of the firm's future performance

a firm trying to compete with the leading firm in a competitive industry can try to negate the leading firm's competitive advantage through

direct imitation substitution

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

dynamic

resource based view classifies all resources as

tangible or intangible

when the high market valuation of internet based firms is analyzed

the importance of intangibles becomes clear

reservation price

the subjectively determined maximum amount a customer would pay for a product

a better measure of a firm's performance over the long term is

the total return to shareholders

disadvantages of the value creation perspective

the value that a consumer places can vary per moment difficult to determine the value consumers place on a given good large firms find it difficult to estimate economic value created for all products and services offered

how are intangible resource stocks acquired

through investments over time in intangible resources

a resource is rare if

the number of firms that possess it is less than the number of firms required to reach a state of perfect competition