Ch3

_____ are used to complete the organizational tasks required to produce, distribute, and service the goods or services the firm provides to customers.

Capabilities

Which of the following statements about intangible resources is NOT true?

Compared to tangible resources, intangible resources are the lesser source of capabilities and, subsequently, core competencies.

Brownstone Company has a particular capability that is valuable but is not rare nor costly to imitate and is possibly substitutable. What would be the likely competitive consequences of this capability?Brownstone Company has a particular capability that is valuable but is not rare nor costly to imitate and is possibly substitutable. What would be the likely competitive consequences of this capability?

Competitive parity

Which of the conditions that characterizes difficult managerial decisions concerning resources, capabilities, and core competencies results from the interrelationships among conditions shaping a firm?

Complexity

EdgeWise, Inc., a U.S. company, has decided to explore the possibility of offshoring in order to meet certain financial benchmarks. Which of the following activities would fall within that category?

Contracting with a company in India to provide data-entry services

Which of the following are a reputational resource?

Customers' perceptions of product quality

Pat and Lee have been asked to complete a value chain analysis. Which component of an internal analysis are they performing?

Discovering core competencies

Efficently handling customers' orders and arranging for customers' payments for delivered goods are both examples of what type of value chain activity?

Distribution

Which of the following statements about a core competence is NOT true?

Every capability is a core competence.

Which support function in the value chain involves investing in organizational functions in ways that will support the firm's efforts to produce and distribute its products in the short and long term?

Finance

FoodWay Company operates a chain of grocery stores located in six U.S. states. At the bottom of each customer's checkout receipt is a link to an online survey that allows the customer to provide feedback on his or her shopping experience. Lee was hired by FoodWay to tabulate and analyze the data collected through the online surveys completed by customers. What type of value chain activity was Lee hired to do?

Follow-up service

Selecting and training employees are activities for which support function in the value chain?

Human resources

Which of the following is a support function, rather than a value chain activity, on the value chain?

Human resources

Which of the following is NOT one of the primary categories of tangible resources?

Innovation

Bonita and Jay, two managers at MTS, disagree regarding the best way to manage the firm's resources. Which condition is impacting the managerial decision?

Intraorganizational conflict

Wallingford Company is trying to determine optimal ways to collect and distribute knowledge throughout the firm. This is an activity for which support function in the value chain?

Management information systems

When Greenwall Company uses point-of-purchase data collection to effectively and efficiently control its inventory, it does this through which functional area of the firm?

Management information systems

Which of the following are an intangible resource?

Managerial capabilities

Effective customer service is a capability within which of the following functional areas?

Marketing

Supplies To Schools (STS) is a nonprofit that provides free school supplies to schools in the metro area. STS was struggling to get the word out about its existence and couldn't build a customer base. Several volunteers worked together to design an eye-catching logo and crisp, clear brochures that were sent to all area schools. They also built a user-friendly website. These volunteers shared their expertise in which value chain activity?

Marketing

What of the following statements regarding mistakes in the decision-making process is true?

Mistakes can lead to opportunities for the firm.

A capability that has no strategic equivalent meets which criterion of sustainable competitive advantage?

Nonsubstitutable

Developing employees' work schedules and designing production processes are both examples of what type of value chain activity?

Operations

Ellen's Kitchen, a small, upscale grocer, has been struggling to serve its customers. Ellen's employees worked together to reorganize the layout of both the storefront and the inventory room. Now the store is easy for customers to navigate, and workers at Ellen's can easily find the correct items when they need to refill the shelves. These employees shared their expertise in which value chain activity?

Operations

Which of the following is a tangible resource?

Production equipment

Which of the following would be a capability in the functional area of research and development?

Rapid transformation of technology into new products and processes

Otis Elevator Co. has been successful in large part because of its ability to develop sophisticated elevator control solutions. This capability lies within which functional area?

Research and development

Netflix is considered one of the best places to work, largely due to its commonsense approach to culture. Rather than monitor staff through vacation policies and annual reviews, Netflix has set clear expectations for its employees. Employees aren't judged by the hours they work; they're evaluated according to their abilities and accomplishments. Based on its culture, which of the following makes Netflix's capabilities costly to imitate?

Social complexity

What is a global mind-set?

The ability to analyze, understand, and manage an internal organization in ways that are not dependent on the assumptions of a single country, culture, or context

Which of the following are two significant concerns associated with outsourcing?

The potential loss in a firm's ability to innovate and the loss of jobs within the focal firm

Which of the following statements regarding intangible resources is true?

They are relatively difficult for competitors to analyze and imitate.

Ultimately, the source of above-average returns for a firm is:

Ultimately, the source of above-average returns for a firm is:

Diamond Mill Company wants to determine which of its value-creating competencies should be maintained, upgraded, or developed and which should be outsourced. Diamond Mill should use which of the following tools to complete this analysis?

Value chain analysis

In which of the following situations have decision makers sometimes proven to be more focused and productive when seeking to find resources that have the potential to be formed into core competencies?

When the firm's total set of resources is constrained

A particular capability leads to a temporary competitive advantage and average to above-average returns. What does this indicate about that capability?

While it is valuable and rare, it is not costly to imitate and is possibly substitutable.

People buy products from Soco Outfitters because it is a brand name they know and trust. Soco's costly-to-imitate capabilities arise from:

a historical source.

One criterion to determine if a capability is a core competence and a source of competitive advantage is if it allows the firm to perform:

a value-creating activity that competitors cannot perform.

If a firm does not have core competencies in an area required to achieve a competitive advantage, it must:

acquire the resources needed to build those competencies.

Rare capabilities are those that:

are not possessed by many others.

In order to gain insights from which to select strategies, the firm needs to match what it _____ do with what it _____ do.

can; might

A firm should outsource only activities where it:

cannot create value or where it is at a substantial disadvantage compared to competitors.

A firm combines individual tangible and intangible resources to create:

capabilities

Apple has combined financial resources and research laboratories with scientists, engineers, and organizational routines to excel in research and development (R&D) to provide innovation. In this scenario, R&D is a(n):

capability

RTC, Inc., has been competing with L-Cort, Inc., the leader in its industry, for years. RTC has gathered and analyzed large amounts of competitive intelligence about L-Cort and has observed as much of the firm's internal functioning and technology as it can gain access to. In spite of this, L-Cort has maintained its competitive advantage and RTC does not know why. The source of L-Cort's success is:

causally ambiguous.

Some core competencies may lead to _____ for the firm.

competitive advantage

A firm should analyze the internal organization to identify its strengths and weaknesses as reflected by all of the following EXCEPT:

competitors' capabilities.

Picture This is a small business that specializes in videos and photography. It creates videos to be shown at events, as well as videos and photos of events that are then packaged in unique and creative ways. Picture This once experienced a high demand for its services and was known for its high quality, creativity, and fast delivery times. Now that more people have easy access to photo and video apps through their personal electronic devices, the demand for the services offered by Picture This has lessened and the business is earning below-average returns. This is an example of:

core competencies that have become core rigidities.

The strategic decisions that managers make about the internal organization:

directly impact the firm's level of returns.

Companies can learn to compete primarily on the basis of firm-specific differences when they:

emphasize core competencies when selecting and implementing strategies.

When a core competency becomes a core rigidity, it can:

generate inertia.

A company can earn above-average returns only when the value it creates is:

greater than the costs incurred to create that value.

Capabilities are often based on developing, carrying, and exchanging information and knowledge through the firm's:

human capital.

By outsourcing, a firm can:

increase the probability of developing core competencies and achieving a competitive advantage.

Knowledge, trust, and skills are all _____ resources.

intangible, human

An individual who takes an intelligent risk when making a decision when no obviously correct model or rule is available or when relevant data are unreliable or incomplete is exercising:

judgement

Outsourcing is concerned with how components, finished goods, or services will be:

obtained

A firm that does not have the resources or capabilities required to achieve competitive superiority in each value chain activity and support function might benefit from:

outsourcing

The purchase of a value-creating activity or a support function activity from an external supplier is:

outsourcing

Outsourcing allows a firm to nurture a smaller number of capabilities, which:

prevents the firm from becoming overextended.

The source of capabilities is:

resources

When a company assumes that a core competence will be a permanent competitive advantage, that competency runs the risk of becoming a core:

rigidity

When firms have strong positive relationships with suppliers and customers, they are said to have:

social capital.

Brandford, Inc., was started by three childhood friends. Everyone they have hired has fit with the personalities of the three owners. In its 20 years of operation, no one has quit or been fired, and friends or relatives of employees are often hired when the company needs to grow. The friendship and camaraderie among employees at all levels of Brandford has given it capabilities that would be costly to imitate because of:

social complexity.

Mariah makes successful decisions regarding her firm's resources and their management. Mariah is a(n):

strategic leader.

The main competitive advantage of a particular major U.S. technology firm is sourcing and procurement of raw materials. This company is facing increasing competition on price and is strongly considering outsourcing as a means of reducing costs. The LAST function this firm should consider outsourcing is:

supply-chain management.

In the value chain, finance is a(n):

support function.

A _____ competitive advantage exists only when competitors are unable to duplicate the benefits of a firm's strategy or when they lack the resources to attempt imitation.

sustainable

The best thing to do when faced with a failure is to:

take corrective actions.

The firm's capacity to borrow and its ability to generate funds internally are _____ resources.

tangible, financial

A competitive advantage's sustainability is a function of all of the following factors EXCEPT:

the amount of tangible and intangible resources that a firm has.

RTX Power Tools has seen sales decline on its gas-powered tools. The market seems to be shifting to tools using rechargeable batteries, but it is not clear if that market segment has staying power. The RTX managers are making decisions under conditions of:

uncertainty.

The more _____ a resource is, the more valuable that resource is to creating capabilities.

unobservable

By pursuing an opportunity to create a marketplace through which businesses could introduce their goods and services to customers who would be able to experience them at a discounted price, Groupon made use of a _____ capability.

valuable

In the grocery and convenience store industry, rewards cards and fuel points are examples of capabilities that are _____ but no longer _____.

valuable; rare

A product's performance characteristics and its attributes for which customers are willing to pay are used to measure:

value