Chapter 4

Which of the following are potential market opportunities that managers try to identify when tailoring strategy to a company's situation?

Acquiring rival companies with attractive capabilities Expansion into new geographic markets Serving additional customer groups or market segments

How can a company improve cost competitiveness on the distribution side of its value chain?

By changing to a more cost-effective distribution strategy By encouraging forward channel allies to reduce their costs and markups By collaborating with distributors to find win-win cost reduction strategies

How can a company use its supplier relationships to bolster its customer value proposition?

By choosing suppliers that have higher standards By offering suppliers quality-based incentives By integrating suppliers into the design process

How can a company enhance differentiation at the forward end of the value chain system

By participating in cooperative advertising By offering incentives to downstream partners to enhance customer value By setting standards and train channel partners to implement them

How can managers improve a firm's customer value proposition and enhance differentiation?

By reallocating resources By introducing new technologies By adopting best practices

Which of the following accurately reflect the relationship between a company's activities and its resources and capabilities?

Continuous investment of resources in value chain activities leads to the creation of a competence. Prioritizing a competitive capability transforms it into a core competence. Value-creating activities contribute to the formation and development of capabilities.

The clothing retailer Patagonia remains competitive with a customer value proposition that focuses on which of the following?

Corporate environmental responsibility High quality

Detailed examination of a company's value chain, including its customer value proposition and business model, allows for evaluation of which of the following?

Cost structure and pricing Capabilities that enhance differentiation Profit margin

To appraise a company's strengths, managers determine how well the firm performs key aspects of the business, including which of the following?

Customer service Supply chain management Sales and marketing

What business practice is the most important factor that allows a company to seize the moment when a golden marketing opportunity presents itself?

Diligent market reconnaissance

Most of a firm's organizational capabilities can be characterized as being either of which two of the following?

Existing in a firm's processes and systems Being based on knowledge

A value chain system is defined as a company's own value chain combined with those of its suppliers but not those of its wholesale distributors, who deal with finished products.

False

What would likely be part of the value chain for a service-based business, such as a packaging-design firm?

Hiring creative talent Brainstorming new ideas Delivering artwork to clients

What can be learned through value chain analysis?

How each activity of a rival delivers value to customers The competitive differences among rivals The differences in how competitors perform specific activities

Which of the following are considered internal weaknesses of a company?

Inferior capabilities Deficiencies in intangible assets Unproven skills

Which company resources and capabilities reflect a high level of social complexity?

Internal company culture Interpersonal relationships between managers Trust-based relations with customers

Which of the following are characteristics of a company's core competence?

It is competitively valuable. It contributes to the company's profitability. It is central to a company's strategy.

Which of the following are benefits of employing a third party to provide benchmarking data?

It maintains anonymity. It helps avoid ethical issues.

In addition to human resources, which of the following are a company's intangible assets?

Its brands Its reputation Its image

A company can examine its value chain to analyze which of the following?

Its cost structure Its business model Its customer value proposition

As a type of company resource, relationships include which of the following?

Joint ventures Partnerships Dealer networks

Which of the following types of market opportunities are the most relevant for a company to pursue?

Market opportunities that match up with the company's competitive assets Market opportunities that offer the best chances for profitability Market opportunities that offer the best chances for growth

Which of the following are key components of a company's competitive strategy?

Marketing Information technology Human resources

Information gleaned from a SWOT analysis can be used to create strategic actions that include which of the following?

Matching the company's strategy to its internal strengths Correcting significant weaknesses Defending against external threats

Which statements about a company's capabilities are true?

One method of identifying capabilities starts with a survey of the functions performed within the company. One method of identifying capabilities starts with a list of the company's resources.

A company's tangible resources, typically defined as resources that can be easily quantified, include which of the following?

Organizational resources Financial resources Technological resources

Which activities make up the primary value chain in the pulp and paper industry?

Papermaking Timber farming Logging

The value of performing a detailed competitive strength assessment is that it allows a company to do which of the following?

Pinpoint competitors' relative weaknesses Address vulnerabilities Plan offensive and defensive strategies

Which of the following are criteria of VRIN tests for evaluating the competitive advantage of a resource or capability?

Rarity Inimitability

A competitive strength assessment would most likely use information obtained through which of the following?

Resource and capability analysis SWOT analysis Benchmarking

A company's competitive assets are made up of which of the following?

Resources Capabilities

The value chains of a company's distribution-channel partners are significant because they directly affect which of the following?

Sales volumes Customer satisfaction Retail prices

What qualities help create differentiation based on quality, which improves a company's competitive advantage?

Status Image Design Innovation

Changes in what factors contribute to the erosion of a company's competitive advantage over time?

Technology Distribution channels Customer preferences

Which of the following are factors that help indicate the success of a company's business strategy?

The company's stock price The rate of customer retention Sales and earnings growth

To solidify a company's future financial and competitive success, managers can examine the results of broad industry analysis and internal company evaluations. What will this will help them understand?

The company's strategic and competitive challenges What problems require their foremost attention Which of the company's competitive shortcomings need addressing

Which of the following are external factors that pose threats to a company's profitability and competitive well-being?

The emergence of lower cost or improved technologies Unfavorable demographic shifts Burdensome new regulations

The value chain of a company's suppliers is significant for which of the following reasons?

The quality of goods supplied affects the purchasing company's differentiation capabilities. Suppliers' activities and costs directly affect a company's own value chain activities. A supplier's value chain costs correlate with a company's own competitiveness.

What are characteristics of resources that are both valuable and rare?

They are true strategic assets. They are competitively superior.

Which of the following are true of a company's core competencies?

They can be leveraged to create new product demand. They can be leveraged to create new markets.

Which of the following are profitability ratios that help determine a company's financial performance?

Total return on assets Net profit margin Net return on total assets

What technique is most useful for helping a company analyze how its competitors deliver products or services that their customers want at an attractive price? Multiple choice question.

Value chain analysis

What analytic tools are helpful in evaluating the competitiveness of a company's costs and customer value proposition?

Value chain analysis Benchmarking

Which statements about gathering company benchmarking information are true?

Visiting the facilities of noncompeting companies is one way of gathering benchmarking information. Comparing the costs of two companies can be misleading if the companies use different cost accounting principles. Some benchmarking information can be obtained from published reports by trade groups and industry research firms.

Which of the following are things that management must do to maintain the value of the company's resources and capabilities?

Watch for the chance to develop new capabilities Continually modify existing assets

When are resources and capabilities difficult for competitors to replicate?

When they are unique When they take time to build up When they require large-scale operations

Which of the following issues might be included in a manager's priority list of problems?

Whether to acquire a rival company How to deal when rivals reduce prices How to respond to foreign competitors

There are times, such as during the financial crisis of 2008-2009, when adverse market conditions can create ______ that plunges a company into crisis and put its future in jeopardy.

a sudden-death threat

When a company is able to maintain its competitive edge despite competitors' efforts to overcome it, the company is said to have achieved ______.

a sustainable competitive advantage

Of the four tests of a resource's competitive power, the most difficult is ______.

assessing the availability of substitutes

The process of comparing the performance of numerous value chain activities across multiple types of companies to assess the costs and effectiveness of these activities is called

benchmarking

The ability of a company to perform competently in carrying out a particular internal activity, such as product innovation or development, is called a ______.

capability

When a company's proficiency rises from that of mere ability to perform an activity to the point of being able to perform it consistently well and at acceptable cost, it is said to have a(n)

competence

To evaluate a firm's ______ power, it is necessary to identify the firm's capabilities and resources and then determine their quality.

competitive

Capabilities that utilize various resources and result from collaboration across multiple departments, such as R&D, marketing, sales, and manufacturing, are known as ______ capabilities.

cross-functional

When a company offers unusually low prices for high-quality products, its business model is based on having a competitive ______.

customer value proposition

If a company's competence level in some activity domain is superior to that of its rivals, it is known as a

distinctive competence

A company's ongoing ability to adapt and renew its competitive assets, capabilities, and resources is referred to as a ______ capability.

dynamic

When a company continually recalibrates and upgrades its equipment and other resources, the firm has a competitive advantage called ______ capability. Multiple choice question.

dynamic

Access to widely available resources and capabilities is one source of a firm's competitive advantage.

false

Although it is an important way for a company to evaluate its business practices relative to other firms, the greatest barrier to benchmarking is ______ the necessary information.

gaining access to

A company's sales revenues minus the cost of goods sold divided by the sales revenues is called the company's ______ margin.

gross profit

Debt-to-equity, long-term debt-to-capital, and total debt-to-assets are all examples of ______ ratios.

leverage

For managers to guide a company's strategy successfully, they must first identify its ______.

market opportunities

A competitive asset owned or controlled by a company is referred to as a(n) ______.

resource

Closely integrated competitive assets that are tied to one or more cross-functional capabilities are called

resource bundles

A two-step process that provides managers with a powerful tool for sizing up a company's competitive assets and determining whether they can provide the foundation necessary for competitive success in the marketplace is known as

resource or capability analysis

Patents and copyrights are types of resources that are part of a company's ______.

technological resources

A company's strategy should always be based on ______.

the company's internal strengths

The operating income of a company divided by its interest expenses is called the ______ ratio.

times-interest-earned

An activity that a company performs poorly in comparison to its competitors is an example of a competitive deficiency, or

weakness