Ch. 3: The Internal Environment

capabilities

represent the firm's capacity or ability to successfully integrate sets of firm resources and deploy these resources to achieve some desired end.

intangible resources

(because they are less visible and more embedded in the firm's history) are more difficult for competitors to understand and imitate. These include such resources as scientific capabilities, knowledge within the firm, organizational routines, or the firm's reputation for quality.

A

Costly-to-imitate capabilities can emerge for all of the following reasons EXCEPT: a. scientific transference. b. social complexity c. historical conditions d. causal ambiguity

A

Intangible assets include: a. the firm's reputation. b. a firm's borrowing capacity. c. depreciated capital assets. d. manufacturing facilities.

valuable, rare, costly to imitate, nonsubstitutable

What are the four criteria used to determine which of a firm's capabilities are core competencies?

value chain

a template that the firm uses to understand its cost position and to identify the multiple means that might be used to facilitate the implementation of its business-level strategy.

D

As defined in the text, resources: a. are concrete sources of value. b. are easily identified. c. have two categories: generic and unique. d. are the source of the firm's capabilities.

valuable

A capability is ___________ when it helps a firm exploit opportunities or neutralize threats in its external environment.

rare

A capability that is _______ is possessed by few, if any, current or potential competitors

C

A major department store chain has a strict policy of banning photographs of its sales floor or back room operations. It also does not allow academics to include it in research studies for publication in research journals. In fact, some of its own top managers refer to the store policies on secrecy as "verging on paranoid." These policies indicate that the top management of the firm believes the organization's core competencies are: a. causally ambiguous. b. unobservable. c. imitable. d. valuable.

non-substitutable

Capabilities are ____________ when they do not have strategic equivalents.

costly to imitate

Capabilities are _______________ when other firms cannot develop them except at a cost disadvantage relative to firms that already possess them. (This can be the case when the capabilities derive from unique historical conditions, are causally ambiguous, or socially complex.)

C

Compared to tangible resources, intangible resources are: a. of less strategic value to the firm. b. not the focus of strategic analysis. c. a more potent source of competitive advantage. d. more likely to be reflected on the firm's balance sheet.

B

Tangible resources include: a. assets that are people dependent such as know-how. b. assets that can be seen and quantified. c. organizational culture. d. a firm's reputation.

C

What is the job of a Chief Learning Officer? a. implementing employee training and development programs b. educating customers about the firm's products c. developing an environment in which knowledge is widespread among employees d. establishing programs to promote education in the community

D

When a resource or capability is valuable, rare, costly to imitate, and nonsubstitutable firms may obtain: a. a temporary competitive advantage. b. a complex competitive advantage. c. competitive parity. d. a sustainable competitive advantage.

A

Which of the following is a true statement about capabilities? a. Capabilities emerge over time through complex interactions of tangible and intangible resources. b. Valuable capabilities are based almost entirely on tangible resources. c. Capabilities based on human capital are more vulnerable to obsolescence than other intangible capabilities because of the tendency for employee knowledge to become outdated. d. The link between firm financial performance and capabilities is dependent on whether the capabilities are based on tangible or intangible resources.

tangible resources

represented by assets which can be seen and quantified. They are not only represented by the firm's physical resources (such as plant and equipment), but also by other assets, such as the firm's borrowing capacity, the skills and attributes of its staff, and its technological capacities.

value

represented by the bundle of performance characteristics and attributes that a firm provides to customers in the form of goods or services for which customers are willing to pay; can be provided by a product's/service's low cost, highly-differentiated features, or a combination of the two (when these strategies are superior to those offered by competitors).