MGT 471 Chap 4
Which of the following can help a firm extend its competitive advantage? (Check all that apply.)
-intellectual property protection -path dependence -better expectations of future resource value
What do the best firms in an industry seek to identify and manage on an ongoing basis as sources to respond to their external environment? (Check all that apply.)
-resources -core competencies -capabilities
strategy activity system
a network of interconnected activities - socially complex & causally ambiguous - enhances likelihood of sustained comp. adv.
A customized strategy that considers the unique resources of the company while considering the external environment creates ______.
a strategic fit between them
If the problem with a business strategy results in causal ambiguity, managers will ______.
have a difficult time developing a theory to deal with the problem
core competencies
unique strengths, embedded deep within a firm allows differentiation of products & services from rivals Result: - higher value for customer - offer products/services at lower cost
The ______ describes the internal activities a firm engages in when transforming inputs into outputs. - .primary chain - value chain - complementary chain - supply chain
value chain
______ are the firm's level of investments to maintain or build a resource.
Resource flows
_____ are any assets that a firm can draw on when formulating and implementing a strategy.
Resources
______ is a framework that allows mangers to synthesize insights obtained from internal and external analysis.
SWOT analysis
how to generate additional insights
SWOT analysis combines external and internal analysis: External analysis: Covered in Chapter 3 Internal analysis: Covered in Chapter 4 Purpose: - Leverage internal strengths to exploit external opportunities - Mitigate internal weaknesses and external threats
The resource-based view classifies all resources as ______.
Tangible or intangible
Unlike capabilities, resources can be both ______.
Tangible or intangible
"Time compression diseconomies" refers to the concept that ______. - some phenomena do not have a clear cause or effect - attempting to get a good outcome in less time tends to be ineffective - options one faces in the current situation are limited by past decisions - barriers to imitation may prevent other firms from competing away - a firm's competitive advantage
attempting to get a good outcome in less time tends to be ineffective
Strategic leaders use internal and external analyses in tandem to create a customized fit between a company's ______.
internal resources and external environment
intangible resources
invisible, no physical attributes - culture - knowledge - brand equity - reputation - intellectual property
Intellectual property protection and social complexity are examples of mechanisms, which help a firm sustain a competitive advantage.
isolating
Rare if (VRIO)
only one or few firms possess it
critical assumptions of RBV
resource heterogeneity and resource immobility
Core competencies of a business are generated by the interaction of ______.
resources and capabilities
Tangible Resources
resources that have physical attributes and thus are visible - labor - capital - land - building - plant - equipment - supplies
The interaction of the many individual systems in the operation of a company often leads to causal ambiguity because of ______.
social complexity
Which of the following were resources and capabilities that helped Five Guys gain a competitive advantage and develop into a successful restaurant chain? (Check all that apply.)
-Focusing on such details as store layout and design -Carefully choosing the supplier of the potatoes for their fries
The VRIO framework is used to evaluate a firm's resources. VRIO is an acronym for which of the following? (Check all that apply.)
-Rare -Imitate -Valuable
______ suggests that sometimes even random events may have a large impacts on an outcome.
Path dependence
primary activities
- firm activities that add value DIRECTLY - transform 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 - necessary to sustain primary activities
T or F: A competitive advantage can be maintained forever.
False
T or F? The value chain concept is applicable only to high-tech firms in rapidly-changing environments
False
True or false: A competitive advantage is most often maintained for very long periods of time.
False
Which of the following best describes the core competency of the Five Guys Burgers and Fries company?
Making high-quality burgers without limiting costs
capablilities
Organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically.
The value chain
The internal activities a firm engages in when transforming inputs into outputs - primary & supportive activities each activity adds incremental value - raw materials --> components --> products each activity adds incremental cost
T/F: A firm's network of interconnected activities is referred to a strategic activity system because activities that are interconnected are very difficult for competitors
True
True or false: According to the resource-based model, a firm is assumed to be a unique bundle of resources, capabilities, and competencies.
True
The ______ is a theoretical model that explains and predicts firm-level competitive advantage.
VRIO framework
core rigidity
a former core competency - turned into a liability - result of environmental change - no longer fits in external environment turns a resource from an asset to a liability
dynamic capabilities perspective
a model that emphasizes a firm's ability to: - modify and leverage its resource base - gain and sustain competitive advantage in a constantly changing environment Dynamic markets are due to: - technological change - deregulation - globalization - demographic shifts **agile governance
resources based view
a model that sees certain types of resources as key to superior firm performance (tangible & intangible)
Isolating Mechanisms
barriers to imitation that prevent rivals from competing away the advantage a firm may enjoy - better expectations of future resource value - path dependence - casual ambiguity - social complexity - intellectual property (IP) protection
According to the VRIO framework, to fully exploit the competitive potential of its resources, capabilities, and competencies, a firm must ______.
be organized to capture value
In order to be successful, a firm must have a resource that is valuable, rare, costly to imitate, and the firm must ______.
be organized to capture value
Cowgirl Boots, inexpensive leather boots for women, are selling at record-high numbers. The CEO of the company, however, cannot figure out why. Was it caused by the company's recent advertisement campaign or the newly reduced price of the boots or some other unknown factor? Based on this information, what concept describes the CEO's confusion regarding Cowgirl Boots' recent success?
causal ambiguity
Costly to Imitate it (VRIO)
competitors cant develop the resources for a reasonable price
A(n) ______ is a unique strength, embedded deep within a firm, that is critical to gaining and sustaining competitive advantage.
core competency
activities
distinct and fine-grained business processes that enable firms to add incremental value by transforming inputs into goods and services
For a firm to sustain any competitive advantage over time, the fit between its internal strengths and external environment needs to be ______.
dynamic
Enterprise Machinists is always improving upon its core competencies by training its machinists constantly so that they are equipped to deal with technological changes and advancements. Based on this information, this is an example of which concept?
dynamic capabilities
Firm is Organized to capture value through: (VRIO)
effective organizational structure and coordinating systems
Valuable if (VRIO)
helps exploit opportunity or offset a threat
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 ______.
the VRIO framework; PESTEL
The resource-based model views resources as ______.
the main driver of firm performance
How are intangible resource stocks acquired? - through investments over time in intangible resources - through financial returns on assets - through developing tangible resources - through decreasing development of tangible resources
through investments over time in intangible resources
A firm's attempts to shorten the length of time a process takes, may lead to disappointing outcomes because of ______.
time compression diseconomies
VRIO framework analysis
too for evaluating firm resource endowments (explains & predicts firm-level competitive adv.) to be the basis of a competitive advantage, resources must be: - valuable - rare - inimitable - organized **resource, capability, competency
A core competency can help a company achieve which of the following? (Check all that apply.)
-to create higher value for the consumer -to differentiate its products and services -to offer products of comparable value at lower cost than rivals can
______ describes a process in which the options one faces in the current situation are limited by decisions made in the past.
Path dependence
______ describes a situation in which different social and business systems interact with each other. Social complexity Causal ambiguity Planned emergence Path dependence
Social complexity
Resource ______ and resource ______ are the key assumptions behind the resource-based model of the firm.
heterogeneity; immobility
Which of the following is not considered an isolating mechanism?
uncertainty about future resource value
What are the characteristics of a strategic activity system as it applies to firms? (Check all that apply.)
-It is socially complex. -It consists of interconnected activities. -It is causally ambiguous.
