4490 Exam 1

high

Taken together, the threat of entry is (high, low) when capital requirements are low.

dynamic capabilities perspective

The ________________ ________________ ______________ is a model that emphasizes a firm's ability to modify and leverage its resources base in a way that enables it to gain and sustain competitive advantage

b

The auditor of a public company is assessing the value of all the intangible assets owned by the company. Which of the following would most likely be included in this assessment? A. the company's headquarters B. the company's brand equity C. the company's cash reserves D. the company's plant and equipment

analysis

The diagnosis of the competitive challenge. This is accomplished through the __________ of the firm's external and internal environments

strategy

The direction and scope of an organization over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations

vision

The element of a firm's strategy that summarizes the ultimate goals of the firm is known as the __________

strategy

The firm's theory on how to attain competitive advantage

b

The greater the difference between value creation and cost, the A. less likely a firm will gain competitive advantage. B. greater a firm's economic contribution. C. greater a firm's competitive parity. D. less likely that a firm's strategic position will be competitive.

economic contribution

The greater the difference between value creation and cost, the greater the firm's ____________ ______________

competitive advantage

The greater the difference between value creation and cost, the more likely it will gain what?

c

The impact of baby boomers getting older on an industry would be classified as which PESTEL factor? A. Legal B. Technological C. Sociocultural D. Economic E. Political

value chain

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

a

The kinds of factors that might be reviewed when considering the "economic" aspect of the PESTEL include A. Changes in disposable income per capita B. Changes in the average age of different consumer groups C. Judicial outcomes that impact product liability within an industry D. The election of a conservative congress E. Changes in the speed of internet communication capabilities

power of buyers

The pressure an industry's customers can put on a producer's margins in the industry by demanding a lower price or higher product quality, describes which of the five forces?

b

The relative bargaining power of suppliers is most likely low when A. the suppliers provide products that are differentiated. B. incumbent firms face low switching costs when changing suppliers. C. there are no readily available substitutes for the products and services they offer. D. the suppliers' industry is more concentrated than the industry it sells to.

strategic group

The set of companies that pursue a similar strategy within a specific industry

strategy

The set of goal-directed actions a firm takes to gain and sustain competitive advantage

stronger

The stronger the five forces, the (stronger, weaker) the competitive intensity, which in turn limits the industry's profit potential.

b

The textbook notes that a resource is valuable if it helps the firm exploit an external opportunity. This will typically result in enhanced economic value. Which of the following is an example of economic value? A. Beats designs provide the user an air of coolness. B. Beats sells headsets for more than $150 when the cost is approximately $15. C. Beats resource immobility resulted in the firm being purchased by Apple. D. Apple and Beats together provide a strong synergy. E. Beats weathered the economic downturn from earlier this decade very well.

network

The value of a product or service for an individual user increases with the number of total users describes _____________ effects

threat of entry

This describes the risk potential competitors will come into the industry.

reduced

Threat of entry is (heightened, reduced) when network effects are present

high

Threat of entry is (high, low) when restrictive government policies do not exist or when industries become deregulated.

false (relative, not absolute)

True or false? Competitive advantage is always absolute, not relative.

true

True or false? Customers, creditors, unions, and the media are all examples of external stakeholders

true

True or false? Dynamic capabilities not only allow firms to adapt to changing market conditions, but they also enable firms to create market changes that can strengthen their strategic position.

true

True or false? Firm effects are a more important factor in determining firm performance than external environment forces

true

True or false? For a firm to sustain its advantage, any fit between internal strengths and the external environment must be dynamic

True

True or false? Incumbent firms often possess cost and quality advantages that are independent of size.

false (the weaker the forces, the greater the industry's profit potential)

True or false? The stronger the five forces, the greater the industry's profit potential; making the industry more attractive.

true

True or false? The threat of new entrants depresses in 2 major ways; one of which is that the threat of new entrants may force incumbent firms to spend more to satisfy existing customers.

false (lower prices)

True or false? The threat of new entrants depresses industry profit in 2 major ways; one of which is that incumbent firms may raise prices to make entry appear less attractive. This lowers profit potential.

true

True or false? Twitter's ambition is to have the largest audience in the world.

competitive disadvantage

Underperformance relative to other competitors in the same industry or industry average

core competencies

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

c

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

c

Walmart producing private-label brands such as Equate health and beauty items and Parent's choice baby products, is an an example of ____________. A. Forward integration B. Skip-hop integration C. Backward integration D. Horizontal integration

a

What are strategic commitments? A. They are actions that are costly, long-term oriented, and difficult to reverse B. They are relationships between strategic planning, competitive parity, and mission statement C. They are mission statements for technological innovators. D. They are comparisons of scenario planning and planned emergence.

a

What type of vision is most likely to fail? A. product-oriented B. marketing-oriented C. customer-oriented D. mission-oriented

b

When a firm integrates the competitive strategies of cost-leadership and differentiation, it will most likely result in A. a competitive advantage through superior performance. B. trade-offs that work against each other. C. an increase in the firm's economic contribution. D. competitive parity with firms that have adopted either of the strategies.

d

When a focal company moves upstream in the industry value chain into his suppliers' business, ____________ occurs. A. Forward integration B. Rivalry of existing competitors C. Threat of substitutes D. Backward integration E. Entry barriers

high

When buyers can credibly threaten to backwardly integrate into the industry, the power of buyers is (high, low).

increases

When network effects are present, value (increases, decreases) with number of users?

threat of substitutes

When substitutes meet the same basic customer needs as the industry product but in a different way, describes which of the five forces?

high

When suppliers do not depend heavily on the industry for a large portion of their revenues, the power of suppliers is (high, low).

AFI framework

When used together, this can help managers plan and implement a strategy that can improve performance and result in competitive advantage

Rivalry among existing competitors

Which of the five forces describes the intensity with which companies in the same industry vie for market share and profitability?

Rivalry among existing competitors

Which of the five forces is the only one that DOES NOT exert pressure

b

Which of the following actions of an automobile firm will be considered as a strategic commitment? A. the firm launching an existing model of a car in red as a limited edition for six months B. the firm investing eight years and $4 billion to develop a range of hybrid cars with which it will compete in the future C. the firm spending $100,000 on renting a manufacturing facility to meet the temporary demand for its cars D. the firm promoting its new model of coupe through a free European trip worth $15,000 to be won as an early-bird offer

d

Which of the following does a firm possess when it can outperform other firms in the same industry or the industry average over a prolonged period of time? A. consistent power position B. long-term capital gain C. strategic positioning D. sustainable competitive advantage

d

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.

b

Which of the following has contributed to Tesla's competitive advantage in terms of stock appreciation? A. copying the most popular features of competitors' vehicles B. reinvesting profits to continually design and produce better electric vehicles C. keeping its proprietary technologies secret D. using inexpensive materials to keep costs low

b

Which of the following is NOT an important source of entry barriers? A. Capital requirements B. High profitability of a particular industry C. Government policy D. Network effects E. Economies of scale F. Credible threat of retaliation

b

Which of the following is a feature of a fragmented industry? A. It tends to generate high profitability B. It consists of many small firms C. It allows firms to set prices D. One large firm dominates the indsutry

d

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

a

Which of the following real-world examples best supports the statement that strategic commitments to a specific industry may be the result of political rather than economic considerations? A. A number of European governments created Airbus through direct subsidies to provide a countervailing power to Boeing. B. Airbus and Boeing are likely to exit the aircraft manufacturing industry when industry profit potential falls to zero. C. The traditional U.S. airlines Delta, United, and American Airlines have large fixed costs to maintain their network of routes that affords global coverage, frequently in conjunction with foreign partner airlines. D. Given their strategic commitments, neither Delta nor United is likely to merge with other airlines.

b

Which of the following statements about the five forces in the U.S. airline industry is true? A. Substitutes are not readily available since customers cannot use other means of transport. B. The competitive forces taken together are quite unfavorable for generating a profit potential in the airline industry. C. The combination of the competitive forces leads to collusion among existing airlines. D. Entry barriers in the airline industry are relatively high because of the high costs involved.

d

Which of the following statements best supports the fact that even during a period of low demand in the U.S. automotive industry, excess capacity remained? A. Suppliers in the automotive industry had low bargaining power. B. Other American automakers of plug-in hybrid sports cars, like Fisker Automotive, filed for bankruptcy. C. Complementary products and services like battery charging and service stations were pervasive. D. GM and Chrysler, despite their bankruptcy, restructured instead of exiting the industry.

d

Which of the following statements is true of strategy? A. Statements of desire, on their own, are strategy. B. Tactical tools that are a part of a firm's functional and global initiatives are strategy. C. Operational effectiveness and competitive benchmarking are strategy. D. Actions that allow a firm to address a competitive challenge are strategy.

c

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

d

Which of these is a way to reconfigure a value chain? A. thinking about new combinations of resources and capabilities that a firm already possesses, such as repurposing a movie theater as a location for off-site corporate meetings B. creating a partnership through strategic alliances, such as a bakery partnering with a restaurant C. preparing to leave an industry rather than supply unreliable or substandard products to customers D. entering an industry by offering sporting events on streaming video when competitors are offering them through cable hookups

a

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, so 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. better expectations of future resource value. C. economies of scale. D. resource mobility.

static

With (static, dynamic) models, one cannot determine changing speed or rate of innovation.

VRIO

___________ framework is a theoretical framework that explains and predicts firm-level competitive advantage

competitive industry structure

____________ ____________ ____________ refers to elements and features common to all industries. It is largely captured by the number and size of its competitors, the firms' degree of pricing power, the type of product or service, and the height of entry barriers.

mobility

____________ barriers are industry-specific factors that separate one strategic group from another

economic

____________ factors in a firm's external environment are largely macroeconomic, affecting economy-wide phenomena

political

____________ factors result from the processes and actions of government bodies that can influence the decisions and behavior of firms

capital

____________ requirements describe the "price of the entry ticket" into a new industry

demographic

____________ trends are also important sociocultural factors. These trends capture population characteristics related to age, gender, family size, ethnicity, sexual orientation, religion, and socioeconomic class

dynamic

_____________ capabilities are a firm's ability to create, deploy, modify, reconfigure, upgrade, or leverage its resources over time in its quest for competitive advantage.

legal

_____________ factors include the official outcomes of political processes as manifested in laws, mandates, and court decisions -- all of which can have a direct bearing on a firm's profit potential

technological

_______________ factors capture the application of knowledge to create new process and products

ecological

_______________ factors involve broad environmental issues such as the natural environment, climate change, and sustainable economic growth

customer switching

________________ _____________ costs are incurred by moving from one supplier to another

sociocultural

________________ factors capture a society's cultures, norms, and values

a

If a company chooses to keep its vision customer-oriented rather than product-oriented, what will be the implication of that decision? A. The company will tend to be more flexible when adapting to changing environments. B. The company will clearly define how it means to satisfy a customer need. C. The company will fail to establish a positive relationship between its vision statement and performance. D. The company will have a short-term, unidirectional focus.

a

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

strength, competency

If the resource is valuable, rare, and costly to imitate, then it is an internal __________ and a core ___________________

d

In a SWOT analysis, the ___________ focuses on shoring up an internal weakness to improve ability to take advantage of an external opportunity A. S-O quadrant B. W-T column C. S-T quadrant D. W-O column

b

In a SWOT analysis, the ___________, derives "offensive" alternatives by eliminating or minimizing an internal weakness in order to mitigate an external threat. A. S-O quadrant B. W-T column C. S-T quadrant D. W-O column

a

In a SWOT analysis, the ___________, derives "offensive" alternatives by using an internal strength to exploit an external opportunity. A. S-O quadrant B. W-T column C. S-T quadrant D. W-O column

c

In a SWOT analysis, the ___________, uses an internal strength to minimize the effect of an external threat A. S-O quadrant B. W-T column C. S-T quadrant D. W-O column

c

In performing a SWOT analysis to generate insights from external and internal analysis, internal strengths and weaknesses can be determined by applying ___________ and external strengths can be evaluated in part by applying ___________. A. Porter's 5 forces; VRIO framework B. PESTEL; VRIO framework C. VRIO framework; PESTEL D. Porter's 5 forces; PESTEL

mobility

In the airline industry, the __________________ barrier of offering international routes restricts movement between hub-and-spoke and point-to-point airlines

support

In the value chain, ____________ activities add value indirectly

d

Incumbent firms can benefit from several important sources of entry barriers. Economies of scale are one such source. Which of the following is an implication of economies of scale for incumbent firms? A. They cannot employ technology efficiently. B. They can spread fixed costs over lesser units. C. They benefit from a less specialized division of labor. D. They can demand better terms from their suppliers.

convergence

Industry ____________ is a process whereby formerly unrelated industries begin to satisfy the same customer need.

dynamic

Industry structures are not stable over time, they are (static, dynamic).

a

Is the resource, capability, or competency VALUABLE? If no, then you are at a... A. competitive disadvantage B. competitive parity C. temporary competitive advantage D. sustainable competitive advantage

c

Is the resource, capability, or competency valuable and rare, but NOT costly to imitate? If so, then you are at a... A. competitive disadvantage B. competitive parity C. temporary competitive advantage D. sustainable competitive advantage

b

Is the resource, capability, or competency valuable, but NOT rare? If so, then you are at a... A. competitive disadvantage B. competitive parity C. temporary competitive advantage D. sustainable competitive advantage

D

Is the resource, capability, or competency valuable, rare, costly to imitate, and organized to capture value? If YES to all, then you are at a... A. competitive disadvantage B. competitive parity C. temporary competitive advantage D. sustainable competitive advantage

c

Is the resource, capability, or competency valuable, rare, costly to imitate, but NOT organized to capture value? If so, then you are at a... A. competitive disadvantage B. competitive parity C. temporary competitive advantage D. sustainable competitive advantage

power, legitimacy, urgency

List three stakeholder attributes

nonmarket

Lobbying, public relations, contributions, and litigation are all examples of _____________ strategies

c

Many firms of all sizes actively compete in the computer hardware industry, and there are no firms with a large market share. Product offerings tend to be similar but are differentiated in ways that enable some firms to raise or impact pricing. The computer hardware industry is an example of _______________. A. Natural monopoly B. Oligopolistic industry C. Monopolistic competition D. Perfectly competitive industry

entry barriers

Obstacles that determine how easily a firm can enter an industry and often significantly predict industry profit potential

exit barriers

Obstacles that determine how easily a firm can leave an industry. They are comprised of both economic and social factors, for example fixed costs that must be paid, or emotional attachments to certain geographic locations

b

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.

capabilities

Organizational and managerial skills needed to orchestrate a diverse set of resources and deploy them strategically

e

Organizational core values help companies answer which question? A. What do we want to accomplish ultimately? B. What products and services do we plan to provide, and in what markets will we compete? C. How can we improve employees' job satisfaction as we pursue our vision and mission? D. How can we gain a competitive edge as we pursue our vision and mission? E. What guardrails do we put in place to act ethically and legally as we pursue out vision and mission?

stakeholders

Organizations, groups, and individuals that can affect or are affected by a firm's actions

sustainable competitive advantage

Outperforming competitors or the industry average over a prolonged period of time

d

Owners of coffee plantations in the country of Jabatina grow their own coffee beans and supply them to various stores and restaurants all over the country. There are many plantation owners supplying to a huge number of companies, and they are typically unable to differentiate their products from one another. They also do not have the power to fix their own prices in the industry. In addition, these suppliers can only achieve competitive parity and not a competitive advantage. Thus, the coffee bean industry in Jabatina best illustrates a(n)___ structure. A. monopolistically competitive B. oligopolistic C. monopolistic D. perfectly competitive

competitive parity

Performance of two or more firms at the same level

credible threat of retaliation

Price war (industry profit may fall below cost of capital), increased product and service innovation, advertising and sales promotions, and litigation are all examples of which entry barrier?

b

Product-oriented vision statements provide managers with A. goals for employee development. B. goals to improve service. C. strategic flexibility. D. ways to solve customer problems.

a

Quick Eats is a fast-food restaurant that has recently entered the hospitality industry. Since most of its competitors are pursuing a low-cost position and doing well, Quick Eats also wants to adopt the same strategy. Which of the following will be a likely implication of this decision? A. Quick Eats will face low profit potential. B. Quick Eats will be able to create higher value for its customers. C. Quick Eats will be better placed to gain a competitive advantage in the industry. D. Quick Eats will not face any direct competition in the industry.

mission

A _________ outlines what an organization does, while a vision outlines what an organization wants to do

strategic group model

A _____________ _________ __________ is a framework that explains differences in firm performance within the same industry

c

A _________________ occurs when a firm has accrued significant market power and is changing the industry structure in its favor. A. Natural monopoly B. Strategic emergent monopoly C. Near monopoly D. Accrued liable monopoly

b

A company with a ___________ vision statement tends to be more flexible and more likely to succeed. A. resources-oriented B. customer-oriented C. product-oriented D. marketing-oriented

b

A core values statement provides information to employees regarding the company's ___________ A. marketing strategy B. ethics and morals C. strategic planning D. vision and mission

IP protection

A critical intangible resource that can provide a strong isolating mechanism, and thus help to sustain a competitive advantage

stakeholder impact analysis

A decision tool with which manager can recognize, prioritize, and address the needs of different stakeholders, enabling the firm to achieve competitive advantage while acting as a good corporate citizen

c

A firm is likely to have a competitive advantage when it A. performs at a level similar to the other firms in the industry. B. provides goods similar to those of its competitors, but at a higher price. C. provides services that consumers will value more than those of its rivals. D. minimizes the difference between value creation and the costs involved.

low cost, differentiator

A firm's core competency is generally found in a network linking different but distinct activities, each contributing to the firm's strategic position as either a _____ _____ leader, or ______________.

industry

A firm's performance attributed to the structure of the industry in which the firm competes is called ____________ effects

strategic position

A firm's strategic profile based on economic value -- the difference between value creation and cost (V - C)

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

pestel

A framework that categorizes and analyzes an important set of external factors that might impinge upon a firm. These factors can create both opportunities and threats for the firm

formulation

A guiding policy to address the competitive challenge. This element is accomplished through strategy ________________, resulting in the firm's corporate, business, and functional strategies

RBV (resource-based view)

A model that sees certain types of resources as key to superior firm performance

complement

A product, service, or competency that adds value to the original product offering when the two are used in tandem

Implementation

A set of coherent actions to implement the firm's guiding policy. This element is accomplished through strategy ____________________.

social complexity

A situation in which different social and business systems interact with one another

causal ambiguity

A situation in which the cause and effect of a phenomenon are not readily apparent

path dependence

A situation in which the options one faces in the current situation are limited by decisions made in the past

power

A stakeholder has ___________ over a company when it can get the company to do something that it would not otherwise do

urgent claim

A stakeholder has a(n) __________ ________ when it requires a company's immediate attention and response

legitimate claim

A stakeholder has a(n) _____________ _______ when it is perceived to be legally valid or otherwise appropriate

strategic intent

A stretch goal that pervades the organization with a sense of winning, which it aims to achieve by building the necessary resources and capabilities through continuous learning

industry analysis

A(n) ______________ ______________ is a method to (1) identify an industry's profit potential and (2) derive implications for a firm's strategic position within an industry

a

Qwik Process Inc. is a company that supplies microprocessors to Nuevono Inc., a computer hardware company. When Nuevono Inc. demands lower prices for the microprocessors, Qwik Process Inc. makes it clear that it would profit more from launching its own brand of laptops and desktops in the market. Fearing the competition it would then face from Qwik Process Inc., Nuevono Inc. decides to buy the microprocessors at the quoted price itself. In this scenario, Qwik Process Inc., as a supplier, has exercised its bargaining power by threatening to A. forward integrate. B. crowdsource. C. outsource. D. backward integrate.

static, dynamic

Rather than creating a _________ fit, the firm's internal strengths should change with its external environment in a ____________ fashion

stocks

Resource ___________ are the firm's current level of intangible resources

flows

Resource ___________ are the firm's level of investments to maintain or build a resource

immobility

Resource _____________ is the assumption in the RBV that a firm has resources that tend to be "sticky" and that do not move easily from firm to firm

heterogeneity

Resource ______________ is the assumption in the RBV that a firm is a bundle of resources and capabilities that differ across firms

d

Although the five forces model is useful in understanding an industry's profit potential, it provides only a ____________. A. Dynamic view of a moving target B. Fixed view of a static competitive market C. Point-in-time snapshot of industries that do not change D. Point-in-time snapshot of a moving target

industry

An ____________ is a group of incumbent companies that face more or less the same set of suppliers and buyers.

stakeholder strategy

An integrative approach to managing a diverse set of stakeholders effectively in order to gain and sustain competitive advantage

strategic management

An integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage

resources

Any assets that a firm can draw in when formulating and implementing strategy

isolating mechanisms

Barriers to imitation that prevent rivals from competing away the advantage of a firm

competitive advantage

Superior performance relative to other competitors in the same industry or industry average

co-opetition

Cooperation by competitors to achieve a strategic objective

economies of scale

Cost advantages that accrue to firms with larger output because they can spread fixed costs over more units, employ technology more efficiently, benefit from more specialized division of labor, and demand better terms from their suppliers.

Activities

Distinct and fine-grained business processes that enable the firm to add incremental value by transforming inputs into goods and services

d

Effective use of the PESTEL framework can help us identify: A. Only a few effective trends B. Emerging substitute products C. How a trend is changing buyer behavior in an industry D. Emerging opportunities and threats within an industry E. New competitors

d

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 imitation B. resource mobility C. resource substitution D. resource heterogeneity

c

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. C. FL Systems Inc. will find it easier than Oryxo Systems Inc. to sustain competitive advantage.

strategic commitments

Firm actions that are costly, long-term oriented, and difficult to reverse

primary

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

firm

Firm performance attributed to the actions managers take is called __________ effects

c

How do complements affect a primary product or service? A. They reduce the value of the primary product B. They act as the strategic equivalent of the primary product C. They increase the demand for the primary product D. The lower the utility of the primary product