MGMT 434 Chapter 4

resource flow

A firm decides to retain $20,000 from its annual earnings and invest it in developing an advanced manufacturing system. In this scenario, the $20,000 would most likely be referred to as the firm's A. capital gain. B. frozen asset. C. resource flow. D. marginal utility.

activities

A firm's _______ are best described as distinct and fine-grained business processes such as order taking, physical delivery of products, or invoicing customers. A. resource flows B. capital gains C. capabilities D. activities

research and development

According to the value chain analysis, which of the following is a support activity? A. production and operations B. supply chain management C. marketing and sales D. research and development

resource heterogeneity

Even though Easy Speak Inc. and KM Com Inc. operate in the same industry—telecommunications—each firm has a different and loyal customer base. While Easy Speak Inc. attracts young students and professionals through its efficient network coverage and pricing, KM Com Inc. attracts elderly customers solely due to its excellent customer service. Thus, both firms draw their strengths from distinct resource bundles. Which of the following assumptions of the resource-based model of competitive advantage does this scenario best illustrate? A. resource curse B. resource mobility C. resource depletion D. resource heterogeneity

FL Systems Inc. will find it harder than Oryxo Systems Inc. to attain competitive advantage

FL Systems Inc. and Oryxo Systems Inc. are two competing firms. FL Systems Inc. has $300,000 in tangible assets and $200,000 in intangible assets. Oryxo Systems Inc. has $150,000 in tangible assets and $347,000 in intangible assets. In the context of the resource-based view, which of the following is the most likely implication of the asset values of the two companies? A. Oryxo Systems Inc. has less valuable resources than FL Systems Inc. B. Oryxo Systems Inc. has less invisible assets than FL Systems Inc. C. FL Systems Inc. will find it harder than Oryxo Systems Inc. to attain competitive advantage. D. FL Systems Inc. will find it easier than Oryxo Systems Inc. to sustain competitive advantage.

built through investments over time

For an asset or a capability to be included in a firm's resource stock, it should be A. readily available for purchase using cash. B. commonly shared by other firms in the same industry. C. built through investments over time. D. capable of reducing the barriers to entry in an industry.

a temporary competitive advantage

If a firm is not effectively organized to exploit the competitive potential of a valuable, rare, and costly to imitate (VRI) resource, the best case scenario is A. a temporary competitive advantage. B. a state of perfect competition. C. strategic equivalence. D. direct imitation.

any competitive advantage that one firm has will be short-lived

In a perfectly competitive industry structure A. resource immobility is high. B. resource heterogeneity is high. C. any competitive advantage that one firm has will be short-lived. D. competitors cannot move quickly to acquire resources that are utilized by the current market leader.

eliminating an internal weakness to mitigate an external threat

In the context of SWOT analysis, a firm can develop a defensive strategic option primarily by A. maximizing an external weakness to exploit an internal opportunity. B. eliminating an internal weakness to mitigate an external threat. C. leveraging an external opportunity to overcome an internal threat. D. using an internal strength to exploit an external opportunity.

decreasing government interference in the target market

In the context of the SWOT matrix, which of the following best exemplifies an external opportunity for a firm? A. increasing productivity of the employees B. decreasing employee attrition within the firm C. decreasing government interference in the target market D. increasing inflation rates in the target market

allows a firm to take advantage of an external opportunity

In the context of the VRIO framework, a resource is said to be valuable if it A. allows a firm to take advantage of an external opportunity. B. helps a firm increase its costs. C. results in a perfectly competitive industry structure. D. leads to competitive parity within an industry.

The resource is costly to imitate

Onivo Auto Inc. has been the leader in low-cost and fuel-efficient engine technology for many years. It has been able to sustain its competitive advantage primarily because of its highly efficient automobile engines, which competitors have been unable to develop or buy at a reasonable price. In the context of the VRIO framework, which of the following resource attributes most likely underpins Onivo's competitive advantage? A. The resource is easy to replicate. B. The resource is costly to imitate. C. The resource neutralizes external opportunities. D. The resource decreases the perceived value of its products.

intellectual property

Patents, designs, copyrights, trademarks, and trade secrets are five forms of A. intellectual property. B. social complexity. C. causal ambiguity. D. path dependence.

value chain view

The _____ describes the internal activities a firm engages in when transforming inputs into outputs. A. resource-based view B. PESTEL analysis C. value chain view D. SWOT analysis

value chain analysis

Using the _______, managers can see how competitive advantage flows from a firm's distinct set of activities. A. resource-based view B. VRIO framework C. value chain analysis D. SWOT analysis

Dynamic capabilities deal with applying resources over time

Which of the following explains how dynamic capabilities are different from the resource-based view? A. Dynamic capabilities deal with resource heterogeneity. B. Dynamic capabilities deal with intangible resources. C. Dynamic capabilities deal with tangible resources. D. Dynamic capabilities deal with applying resources over time.

skills involved in training and managing a workforce

Which of the following is an example of a firm's capabilities? A. routine activities performed in the firm, like physical delivery of products B. specific tasks involved in the invoicing of customers C. assets such as plant and machinery owned by the firm D. skills involved in training and managing a workforce

While resources reinforce core competencies, capabilities allow managers to orchestrate their core competencies

Which of the following statements accurately brings out the distinction between a firm's resources and capabilities? A. While a firm's resources are always tangible, its capabilities are by nature intangible. B. While resources reinforce core competencies, capabilities allow managers to orchestrate their core competencies. C. Unlike resources, capabilities do not find their expression in the firm's structure, routines, and culture. D. Unlike capabilities, resources of the firm cannot be imitated by its competitors.

the company's ability to make its cars more fuel efficient than most of its competitors

Which of the following will most likely be considered as an automobile company's core competency? A. the company's ability to follow federal laws just like its competitors B.the company's ability to start distributing its cars in areas where a competitor is the market leader C. the company's ability to make its cars more fuel efficient than most of its competitors D. the company's ability to manufacture cars at a cost that is average in the industry

time compression diseconomies

While most of Savvy Inc.'s competitors were moving toward developing and emerging markets, Savvy Inc. decided to keep its operations limited to its home country so that it could gain some advantage. A few years later, however, Savvy Inc. lost its footing in the home market due to a sharp fall in demand. It then decided to invest in large-scale operations in the same developing nations as its competitors, within a short period of six months. However, its costs kept increasing and it could not compete against the already established brands. In this scenario, the failure of Savvy Inc. can be best attributed to A. time compression diseconomies. B. knowledge diffusion. C. economies of scale. D. resource mobility.