Strat Man Test 2

Resoruces

Assets that a company can draw on when crafting & executing a strategy (tangible or intangible)

Blue Ocean Strategy

Business-level strategy that successfully combines differentiation and cost-leadership activities using value innovation to reconcile the inherent trade-offs.

Triple Bottom Line

Economic, social, and environmental impact metrics used to determine an organization's success. (Profits, people, planet)

Resource-based view

Firm performance, which is superior to the average performance of the firms in an industry, is mainly determined by the characteristic internal to the firm

support activities

Research & development, info systems, HR, accounting & finance, infrastructure

VRIO Framework

Valuable Rare Costly to Imitate Organized to capture value

Dynamic Capabilities Perspective

a firm's ability to create, deploy, modify, reconfigure, upgrade, or leverage its resources in its quest for competitive advantage

core rigidity

a former core competency that turned into a liability because the firm failed to hone, refine, and upgrade the competency as the environment changed

One of the reasons that Kodak filed for bankruptcy was due to its inability to reinvest, hone, and upgrade its once impressive film camera capabilities. Ultimately, Kodak's core competences became A) core rigidities. B) value chain activities. C) strategic resources. D) costly to imitate.

a. core rigidities

________ is best described as the difference between a buyer's willingness to pay for a product or service and a firm's total cost to produce it. A) Economic value created B) Break-even point C) Consumer surplus D) Cost of capital

a. economic value created

According to the resource-based view, a firm's competitive advantage often stems from its A) intangible resources. B) tangible resources. C) dynamic strengths. D) external environment.

a. intangible resources

Value chain analysis consists of systematically analyzing a firm's key activities that for analysis purposes are categorized into two groups: A) primary activities and support activities. B) products and service activities. C) customers and suppliers. D) profits and losses.

a. primary & support

Customer service and ________ are two of the value drivers that managers can utilize when trying to improve a firm's differentiation strategic position. A) product uniqueness B) experience curve C) cost of input factors D) economies of scale

a. product uniqueness

Southwest Airlines (SWA) and Alaska Airlines both compete as point-to-point airlines, but they draw upon different resource bundles. This example best illustrates which of the following assumptions regarding the resource-based view? A) resource heterogeneity B) resource homogeneity C) resource allocation process D) resource immobility

a. resource heterogenity

WeComput 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 WeComput Inc. to increase its profitability by lowering its production costs. Thus, WeComput's competency in designing and manufacturing microprocessors will be considered a(n) _____ resource in the VRIO framework. A) valuable B) substitute C) imitable D) organized

a. valuable

Gr8t Food is a chain of "fast casual" restaurants that sells its menu items at higher prices than its competitors. The restaurant has a large customer base due to its wide product portfolio and superior customer service. Which of the following generic business strategies has Gr8t Food adopted in this scenario? A) cost-leadership B) differentiation C) market penetration D) product diversification

b. Differentiation

Buzztronic is a market leader in consumer electronics. If Ficolee and Ficola, companies that manufacture televisions, develop the same customer knowledge base and create products with the same customer appeal as Buzztronic, then A) Ficolee and Ficola will have a VRIO resource. B) Buzztronic will have a resource that is valuable but no longer rare. C) Buzztronic will have a sustainable competitive advantage in the industry. D) Buzztronic will have a resource that is rare but no longer valuable

b. valuable but not rare

Amazon.com's network of distribution centers allow it to drastically reduce its delivery times compared to other online retailers. These distribution centers are examples of Amazon's A) core competency. B) intangible resources. C) tangible resources. D) capabilities.

c. tangible resources

intangible resources

culture, knowledge, brand equity, reputation, intellectual property

Economies of Scale

decreases in cost per unit as output increases

primary activities

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

support activities

firm activities that add value indirectly, but are necessary to sustain primary activities

Tangible Resources

labor, capital, land, buildings, plant, equipment, supplies

resource heterogeneity

model assumption that a firm is a buncle of resources & capabilities differ across firms

Capabilities

organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically

RBV (Resource Based View)

provides a method to study how a firm's internal resources and capabilities are a source of competitive advantage

resource immobility

resources tend to be "sticky" and don't move easily from firm to firm

primary activities

supply chain management, operations, distribution, marketing and sales, after-sales service

Value Chain

the internal activities a firm engages in when transforming inputs into outputs; each activity adds incremental value

core competencies

unique strengths, embedded deep within a firm, that are critical to gaining and sustaining competitive advantage