Global | Ch 4 Internal Analysis

________ are best described as unique strengths, embedded deep within a firm, that allow a firm to differentiate its products and services from those of its rivals, creating higher value for the customer or offering products and services of comparable value at lower cost.

Core competencies

Trust Machines Inc. is a company that manufactures and markets consumer electronics. The unique microprocessors developed by the company contribute to its high resource immobility. According to the resource-based view of competitive advantage, which of the following is an implication of this situation?

The resources of Trust Machines Inc. are difficult to replicate or imitate.

Which of the following management tools will help determine whether a firm's resources, capabilities, and competencies are strengths or weaknesses?

VRIO framework

In the context of SWOT analysis, which of the following best exemplifies a firm's external opportunity?

an increase in its customers' disposable income

In the context of SWOT analysis, which of the following best exemplifies a firm's internal weakness?

decline in the firm's market share

A firm will fail to create a sustained competitive advantage when the

fit between its internal strengths and the external environment is static.

Which of the following is a drawback of the SWOT analysis?

A problem with this framework is that a strength can also be a weakness, and that an opportunity can also simultaneously be a threat.

Which of the following best explains why IBM has been able to maintain its competitive advantage?

IBM successfully transformed itself multiple times in the data information industry over a period of more than 100 years.

Beats Electronics has been able to outperform Audio-Technica, Bose, JBL, Skullcandy, Sennheiser, and Sony in the high-end, premium headphone market. Which of the following statements accurately explains one of the main reasons for the success of Beat?

It created a perception that owning its products was cool.

GN Corp. and BC Inc. are two competing firms in the same industry. GN Corp.'s tangible assets are valued at $15 billion and its intangible assets are valued at $35 billion. BC Inc.'s tangible assets are valued at $5 billion and its intangible assets are valued at $45 billion. What can be concluded from this information?

It is likely that BC Inc. is better enabled than GN Corp. to gain and sustain a competitive advantage.

________ allows managers to synthesize insights obtained from an internal analysis of a company's strengths and weaknesses with those from an analysis of external opportunities and threats.

The SWOT analysis

Which of the following is an example of a firm's resources?

assets such as land and buildings owned by a firm

Organizational and managerial skills that find their expression in a company's structure, routines, and culture are referred to as

capabilities.

To help a firm achieve a competitive advantage, each distinct activity performed in the value chain needs to

contribute to the firm's strategic position as either low-cost leader or differentiator.

Dandelions Max is a consumer electronics company. It has acquired an edge over its competitors through its ability to provide breakthrough technology at the lowest price in the market. This advantage of Dandelions Max best exemplifies a

core competency.

According to the ________, competitive advantage is the outflow of a firm's ability to modify and leverage its resource base in a way that enables it to gain and sustain competitive advantage in a constantly changing environment.

dynamic capabilities perspective

True Moto Corp. (TMC) is a leading automobile company. The company has been able to sustain its competitive advantage primarily due to its high-quality and efficient electric motors. Most of its competitors have failed to develop similar electric motors at a reasonable price. Which of the following resource attributes listed in the VRIO framework has helped TMC sustain its competitive advantage?

high costs involved in imitation

In the context of the SWOT matrix, which of the following best exemplifies a firm's internal strength?

increase in a firm's customer loyalty

The value chain describes the

internal activities a firm engages in when transforming inputs into outputs.

Given the accelerated pace of technological change, in combination with deregulation, globalization, and demographic shifts, a firm will only be successful today if its

internal strengths change with its external environment in a dynamic fashion.

Intangible assets add great value to a firm primarily because the firm's

knowledge and culture take time to develop and are generally difficult to imitate.

In knowledge-intensive industries, the marginal costs after initial invention are

low

According to the value chain analysis, which of the following is a primary activity?

marketing and sales

In a generic value chain, a firm's after-sales service will be referred to as its ________.

primary activity

The "Gold Crisps" potato wafers manufactured by True Foods Inc. have been the highest selling wafers in the market. Though the market for wafers is flooded with competitors, True Foods Inc. has been able to maintain its market position for a long time. This is mainly attributed to the unique taste of the wafers that comes from the unique natural flavoring used by the company. This competency of True Foods Inc. will be considered as a(n) ________ resource in the VRIO framework.

rare

The resource-based view of a firm assumes that the

resource bundles of firms competing in the same industry are unique to some extent and thus differ from one another.

To make the SWOT analysis an effective management tool, a strategist must first

scan a firm's internal and external environments.

Chat Zone Inc., a telecommunication company, had been drastically losing its market share due to tough competition in the industry. The management hired a reputed consulting firm to advice the company. The experts from the consulting firm pointed out that the company primarily lost out on its competitive advantage due to its tedious internal policies and procedures. These ineffective policies and procedures made the company operations, marketing, and after-sales service inefficient. Chat Zone Inc. can best solve its problem by working on its

support activities.

Gene Craft Inc. is the market leader in the pharmaceutical industry. Though most of its resources are common to those of its competitors, a few rare resources have helped the company gain and sustain a competitive advantage. Which of the following assets of Gene Craft Inc. is most likely to be considered a rare resource that is best contributing to its competitive advantage?

the company's chemical patents

Smooth Fusion Inc. is a software company, which has built and acquired numerous assets over the years. According to the resource-based view of a firm, which of the following assets of Smooth Fusion Inc. will best enable it to gain and sustain a competitive advantage?

the expertise acquired by the employees in the company

If a resource is rare or unique to a particular firm, then

the firm will be able to maintain a competitive advantage for a long period.

Which of the following is an example of a firm's intangible resources?

the firm's organizational culture

In the context of SWOT analysis, a firm can develop an offensive strategic option primarily by

using its internal strengths to exploit external opportunities.

Crystal Tech Inc.'s competency in designing and manufacturing efficient microprocessors has made its laptops the most advanced computers in the market. This competency, along with the just-in-time manufacturing system, has enabled Crystal Tech Inc. to increase its profitability by lowering its production costs. Thus, Crystal's competency in designing and manufacturing microprocessors will be considered a(n) ________ resource in the VRIO framework.

valuable

A firm's resource is most likely to be an internal strength and a core competency when the resource is

valuable and costly to imitate.