Mgmt 3830- Ch 3

A process is:

A sequence of coordinated actions that performs a task

Core rigidities can:

Answers b and c

Internal appraisal of a company's capabilities against the best competitors:

Answers b and c

In most small firms a process which is not usually routinized is:

The staff disciplinary proceedings process

Brand values are a:

Type of intangible resource

Honda defines itself as a motorbike and automobile company.

false

Remedying strategic weaknesses in capabilities is likely to take several years.

true

Some firms introduce products into specific countries in a sequence:

All of the above

Firms try to develop resources and capabilities to:

Create sustainable competitive advantage

Apple and 3M's ability to develop genuinely new products are:

One of their core operational capabilities

A football's position on a soccer field is path-dependent.

false

Alliances are a way to develop new capabilities that:

Answers a and b

Spending money raising market perceptions of Hyundai's brand was:

A worthwhile investment in intangible resources

Acquiring a firm with similar products but sales in new markets is one of the easier ways to:

Answers b and c

Organizational culture is:

Answers b and c

Superior capabilities are often traced to staff skills and efforts

Answers b and c

The value to managers of understanding key success factors is:

Generally accepted by the corporate, consulting and academic worlds, but as with most business concepts and models, there are always some detractors

The hierarchy of capabilities refers to:

How capabilities to do market research time-effectively and buy advertising cost-effectively, belong under marketing capabilities

The internal environment:

Is how a firm's resources and capabilities are deployed to deliver its business strategy

Porter's firm value chain can be used to:

Map out a firm's main activities into threshold and distinctive capabilities

Early experiences for some major oil companies:

Mean some of their modern core competences show path dependency

The difference between a capability and a competence is:

No difference in this textbook where they are taken as interchangeable

A good dealership network is a key capability for an automaker

No: dealerships can be independent, or bought and sold, so they are a network of resources in which Hyundai has invested heavily

We need to appraise our resources and capabilities against:

Our competitors' resources and capabilities

Outsourcing to specialists can help a firm:

Reduce a relative weakness in its capabilities

An industry "direct modelling of profitability" is defined in the text as:

Setting up a model of industry profitability from the interaction of the Five Forces

Because marketing is a threshold capability for Hyundai:

To counter their earlier poor image they have had to catch up their rivals' capabilities

One useful way to analyse the drivers of a firm's relative profitability is:

To disaggregate return on capital employed into component ratios that point to the main underlying drivers of profitability

BMW's core competence is its ability to integrate:

World-class engineering, design excellence and effective marketing

Hyundai overcame the most difficult competitive advantages held by the incumbent automakers by:

a. Recruiting experts from other auto companies b. Benchmarking the key capabilities needed to succeed, then making clear commitments to achieve them c. Making long term financial and business commitments to the auto industry

Assembling a great set of resources is the key to getting good results.

false

Core rigidities provide the spine that helps firms learn new skills faster.

false

Human resources are always listed on a firm's balance sheet.

false

Industry attractiveness is now more important in explaining firms' profitability than competitive advantage

false

So resources are ultimately more important than capabilities.

false

Superior capabilities can be acquired and owned by astute firms.

false

We need to honestly appraise our resources and capabilities in order to maximize our appeal to customers.

false

. Competitive advantage is generally the amount by which one firm's profitability exceeds another's in the same industry.

true

A capability that is needed to win versus competitors is a core competence.

true

An experienced football coach's knowledge is path-dependent.

true

Because good companies know their own relative strengths and weaknesses they focus efforts on strengthening the right resources and capabilities.

true

Combining several resources may create capabilities that deliver superior profitability

true

Dynamic capabilities are useful in fast changing environments.

true

It is vital for a business strategist to distinguish between a firm's resources and its capabilities

true

Resources are a firm's productive assets; capabilities are what a firm can do.

true

The value of a brand is the confidence it instils in customers regarding the expected benefits associated with that brand.

true

To stop rivals acquiring a core resource or capability:

Firms need to make that resource or capability immobile

We can define the following general resources for a firm:

Human, Intangible and Tangible

Prahalad and Hamel's 1990 paper:

Kick-started the modern resource-based view of the firm

To value a firm's tangible resources:

We need to know how they could be used optimally

Dynamic capabilities:

Are the capacity to learn new capabilities

The question "What does a firm need to survive competition?":

Requires an understanding of the current and future basis of competition specific to the industry

The safest way to value a firm's productive assets for strategic purposes is to use the historic cost book value of its assets.

false

In fast changing environments:

A firm may define itself by its resources and capabilities

3M is:

A group of businesses with a core capability to develop and launch new products using adhesives, coatings, and other technologies

A capability that is "needed to play" is:

A threshold competence

Threshold capabilities enable a firm to do what every firm in its industry must do. Distinctive or core competences:

Enable it to earn higher profits or greater market share than its competitors in the same industry

Resources and capabilities can generate higher profits

If the competitive advantage they generate is sustained for some years

Human Resource capabilities:

Include the skills to train and develop people

A capability requires:

Individuals to coordinate with each other, and some capital or technology, to achieve a valuable transformation to goods or services

When firms develop organizational routines they are:

Learning by doing

The point of 'resource leveraging' is to:

Limit the range of new capabilities a firm is trying to develop at one time

The final appraisal of the strengths and weaknesses of a firm's resources & capabilities:

Requires insight and understanding of a firm's industry, and its position within the industry

Path dependence is:

Where you are today, with all your knowledge, being a result of how you got here

Companies' "book values" are generally much less than their stock market valuations because:

Accountants are generally required by accounting standards to ignore the value of brands and all other reputational assets

Unsuccessful firms:

Are arrogant about current capabilities, relying on past glories

Tight complex organizational routines:

Are complex capabilities that are hard for rivals to replicate

Truly successful firms:

Are honest enough to recognize their own true strengths and weaknesses themselves

In the automobile industry resources such as brand strength:

Cannot be easily acquired