chapter 3
______ is measured by a product's performance characteristics and its attributes for which customers are willing to pay.
Profit potential
______ are the source of a firm's ______, which are the source of the firm's ______.
Resources; capabilities; core competencies
Valuable capabilities
allow the firm to exploit opportunities or neutralize threats in its external environment.
. One reason executive judgment can be a particularly important source of competitive advantage is that judgment:
allows a firm to build a strong reputation.
A decision that results in failure:
allows for learning.
Capabilities:
are often developed in specific functional areas.
Tangible resources include:
assets that can be observed and quantified.
To provide a sustainable competitive advantage, a capability must satisfy all of the following criteria EXCEPT:
be technologically innovative.
Internal analysis enables a firm to determine what the firm:
can do.
Because firms combine tangible and intangible resources to create capabilities:
capabilities are often based on developing, carrying, and exchanging information and knowledge through the firm's human capital.
Firms should seek to continually develop new core competencies because all core competencies guarantee above-average profit
false
A major reason outsourcing is effective is that:
few firms possess superior capability in all primary and support activities.
By emphasizing core competencies when formulating strategies, companies learn to compete primarily on the basis of:
firm-specific differences.
Examples of support activities include all of the following EXCEPT:
follow-up service.
If a firm offers a service that is valuable, rare, and costly to imitate, but a substitute exists for the service, the firm will:
have a temporary competitive advantage.
A product's value is created by each of the following EXCEPT:
high cost and highly differentiated features.
Compared to intangible resources, tangible resources are ______ constrained because they are ______ to leverage.
more; harder
Judgment is the capacity for making a successful decision when:
no obviously correct model or rule is available.
Organizational culture is:
not easily imitable.
The challenge and difficulty of making effective decisions are implied by preliminary evidence that ______ of organizational decisions fail.
one-half
Government agencies are known for having so many layers and rules that decisions are made slowly and inefficiently. In this case the ______ resource is a detriment to taxpayers using and paying for the bureaucracy.
organizational
Tools such as ______ help the firm focus on its core competencies as the source of its competitive advantages.
outsourcing
Outsourcing is the:
purchase of a value-creating activity from an external supplier.
One capability that can be learned from failure is when to:
quit.
The most numerous of the following organizational characteristics are:
resources.
All core competencies have the potential to become core:
rigidities.
Firms that have strong positive relationships with suppliers and customers are said to have ______, an essential ingredient to creating value.
social capital
Knowledge transfer and access to resources within the value chain are enhanced by:
social capital.
The key to achieving competitiveness, earning above-average returns, and remaining ahead of competitors in the long run is to manage current core competencies:
while simultaneously developing new ones
The proper matching of what a firm can do with what it might do:
yields insights the firm requires to select its strategy
The ______ are those with the potential to be formed into core competencies as the foundation for creating value.
"right" resources
Which of the following is NOT an external event that reveals the "dark side" of core capabilities?
A firm changes its focus to a new core competence
______ is the ability to analyze, understand, and manage an internal organization in ways that are not dependent on the assumptions of a single country, culture, or context.
A global mind-set
. Which of the following is NOT a component of internal analysis leading to competitive advantage?
Analysis of supplier power
Which of the following is a true statement about capabilities?
Capabilities are often developed in specific functional areas such as manufacturing, R&D, and marketing.
______ can be viewed as the capacity to take action.
Core competencies
Which of the following is NOT required for a firm to achieve strategic competitiveness and earn above-average returns from its core competencies?
Core competencies must be internationalized.
_____ is an example of a capability that is based in the functional area of distribution.
Effective use of logistics management techniques
Which of the following is NOT a reputational resource?
Employees' opinions of the firm as a terrible place to work
Which of the following is TRUE about outsourcing?
Outsourcing allows firms to concentrate on those areas in which they can create value.
Firms that achieve competitive parity can expect to:
earn average returns.
All of the following are tangible resources EXCEPT
a firm's reputation.
All of the following were traditional sources of competitive advantage EXCEPT:
a highly educated labor market.
All competitive advantages have:
a limited life
Value consists of:
a product's performance characteristics and attributes for which customers are willing to pay.
Compared to tangible resources, intangible resources are:
a superior source of capabilities.
Value chain activities are:
activities or tasks the firm completes in order to produce products and then sell, distribute, and service those products in ways that create value for customers
Capabilities typically come from:
combining resources.
Capabilities that other firms cannot develop easily are classified as:
costly to imitate.
A firm's core competencies, integrated with an understanding of the results of studying the conditions in the external environment, should:
drive the selection of strategies
A person who has made a successful decision when no obviously correct model or rule is available or when relevant data are unreliable or incomplete has exercised:
judgment.
Costly-to-imitate capabilities can emerge for all of the following reasons EXCEPT:
lack of scientific transference.
Compared to tangible resources, intangible resources are ______ and ______.
less visible; more difficult to copy.
The critical executive skill of the current business age is the ability to:
manage human intellect.
Value chain activities include all of the following EXCEPT:
management information systems
Many firms outsource the payroll function of paying employees to firms such as ADP. Payroll is a(n):
support function.
Which of the following is NOT a factor affecting sustainability of a competitive advantage?
the length of time the core competence has existed
It is increasingly difficult for a firm to develop and sustain a competitive advantage because of the effects of globalization and:
the rapid development of the Internet's capabilities.
All of the following are true about the strategic decisions managers make about their firm's internal organization EXCEPT that:
they are directly correlated to executive compensation.
In today's global economy, some resources that were traditionally critical to firms' efforts to sell goods are now less likely to be a source of competitive advantage.
true
Technology has made it more difficult for companies to find ways to develop competitive advantages.
true
To build social capital whereby resources such as knowledge are transferred across organizations requires ______ between the parties.
trust
The three conditions that characterize difficult managerial decisions concerning resources, capabilities, and core competencies are
uncertainty, complexity, and intraorganizational conflicts.
Value chain analysis is a tool used to:
understand the parts of the firm's operation that create value and those that do not.
From a customer's point of view, for an organization's capability to be a core competence it must be:
valuable and unique.