BUS 491 Chapter 4

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

SWOT analysis

One of the most popular tools used by firms to evaluate their current situation and future prospects is the ______.

SWOT analysis

Why is competitive advantage more likely to spring from intangible rather than tangible assets?

Tangible assets can be bought on the open market.

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

What are the distinct and fine-grained business processes that enable firms to add incremental value by transforming inputs into goods and services?

activities

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

agilely transform its resource base

Isolating mechanisms are considered to be ______.

barriers to imitation

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

a strategic fit between them

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

What are the characteristics of a strategic activity system as it applies to firms? -It is causally ambiguous. -It is socially complex. -It weakens competitive advantage. -It consists of interconnected activities.

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

Which of the following statements are true about the capabilities of a firm? -They include intellectual property. -They include managerial skills. -They concern the deployment of resources. -They include organizational skills.

-They include managerial skills. -They concern the deployment of resources. -They include organizational skills.

A firm trying to compete with the leading firm in a competitive industry can try to negate the leading firm's competitive advantage through which of the following? -direct imitation -engaging in perfect competition -substitution -value-added resources

-direct imitation -substitution

What should a firm do in order to be organized to capture value? -have a rare and valuable resource -have a good organizational structure -have good coordinating systems -have CEOs with forward-thinking vision

-have a rare and valuable resource -have a good organizational structure -have good coordinating systems

Which of the following can help a firm extend its competitive advantage? -path dependence -intellectual property protection -better expectations of future resource value -resource stocks and flows -depletion of tangible and intangible resources

-intellectual property protection -better expectations of future resource value -resource stocks and flows

What can cause an outflow of intangible resource stocks from a firm? -continuous investments -turnover of employees -organizational learning -forgetting knowledge

-turnover of employees -forgetting knowledge

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

Understanding the cause and effect of a strategy may help managers avoid _____.

causal ambiguity

Which isolating mechanism provides a competitive advantage for a successful company when the source of that company's success is difficult to specify?

causal ambiguity

Dynamic capabilities are most relevant in ______.

changing markets

Groupon's ______ was temporary since its resource was neither rare nor costly to imitate.

competitive advantage

According to the value chain perspective, ______ are located in the network that connects different, but related activities within a firm.

core competencies

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

A firm's dynamic capabilities allow it to respond agilely to market changes, as well as to ______.

create market changes

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

dynamic

Enterprise Machinists is always improving upon its core competencies by training its machinists constantly so that they are equipped to deal with technological changes and advancements. Based on this information, this is an example of which concept?

dynamic capabilities

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

the two types of value chains are_______ value chains, which are vertical value chains, and ______value chains, which are horizontal value chains.

industry, firm

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

internal resources and external environment

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

isolating

______ activities add value directly by transforming inputs into outputs as the firm moves a product or service horizontally along the internal value chain.

primary

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

A resource is ______ if the number of firms that possess it is less than the number of firms required to reach a state of perfect competition.

rare

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

While the ______ clarifies a firm's core competencies, the ______ helps leaders understand how competitive advantage arises from the firm's unique activities

resource-based view; value chain perspective

According to the resource-based view of a firm, what are defined as any asset, capability, or competency that a firm can draw upon when formulating and implementing strategy?

resources

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

resources and capabilities

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

Accounting and finance are ______ activities in a firm's value chain.

support

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

Capabilities include which of the following? -a company's organizational structure -a company's routines -a company's culture -a company's financial statements

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

Which of the following are examples of business activities? -invoicing customers -delivery of products -order taking -resource immobility

-invoicing customers -delivery of products -order taking

Competitive advantage is gained in the value chain through which of the following types of activities? -primary -establishing -support -goal

-primary -support

A core competency can help a company achieve which of the following? -to create higher value for the consumer -to reduce the wages of its employees -to offer products of comparable value at lower cost than rivals can -to differentiate its products and services

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

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

Causal ambiguity

______ has a greater chance of arising from intangible resources than from tangible resources.

Competitive advantage

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

value chain

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.(T/F)

true

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

actively modifying of the resource base

Which of the following is true according to the assumption of resource heterogeneity? -Firm resource differences tend to last for a long time. -Resource bundles vary from company to company. -Each firm deals with a unique set of external influences. -Companies should focus on duplicating the resources bundles of successful firms.

-Resource bundles vary from company to company.

Which of the following are situations in which a resource is considered valuable? -The resource is both heterogeneous and immobile. -The resource helps a firm exploit an external opportunity. -The resource helps the firm produce tangible, not intangible competencies. -The resource helps the firm increase its economic value creation (V-C).

-The resource helps a firm exploit an external opportunity. -The resource helps the firm increase its economic value creation (V-C).

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

Path dependence