MGT491 CH4

Pulse Mobiles Inc. is a cell phone manufacturing company. Its latest range of smartphones are visually similar to the Y-series range of smartphones from Talkie Gen Inc., in terms of its shape and look-and-feel. Which of the following strategies has Pulse Mobiles Inc. used to replicate the valuable and rare resource of Talkie Gen Inc.? substitution innovation direct imitation strategic equivalence

direct imitation

Leading guitar string producer Wound Up Inc. has enjoyed a competitive advantage based on its proprietary coating that gives its strings a clearer sound and longer lifespan than uncoated strings. One of Wound Up's competitors, however, has recently developed a similar coating using less expensive ingredients, which allows it to charge a lower price than Wound Up for similar-quality strings. Wound Up's competitive advantage is in danger due to direct imitation and substitution. a lack of perceived value. resource immobility. a lack of organization.

direct imitation and substitution

Accounting, human resources, and research and development (R&D) are examples of primary activities that add value directly to the value chain. T/F

false

Dynamic capabilities are especially relevant for surviving and competing in markets that remain unpredictable. shift quickly. remain constant. shift slowly.

shift quickly

The core competencies of a firm are determined by the interplay of its tangible resources and intangible capabilities. T/F

true

High demand for online video streaming options is one of Netflix's core competencies. T/F

false

Intellectual property (IP) protections such as trademarks or patents are proven methods of establishing permanent barriers to imitation. T/F

false

Which of the following is a drawback of the SWOT analysis? This framework is only applicable to the manufacturing industries; it is ineffective when applied to the service firms. A drawback of this framework is that it allows managers to evaluate only a firm's current situation and not its future prospects. The SWOT analysis takes into account only the internal environment of a firm, ignoring the equally important external environment. A problem with this framework is that a strength can also be a weakness, and that an opportunity can also simultaneously be a threat.

A problem with this framework is that a strength can also be a weakness, and that an opportunity can also simultaneously be a threat

Several senior managers recently left Bass Automobile Inc. and went to work at Unicorn Autos Inc., a rival company. What does this imply? The resource stock of Bass Automobiles Inc. increased. The resource flow into Unicorn Autos Inc. was reduced. Bass Automobiles Inc.'s tangible assets decreased. Bass Automobiles Inc. faced resource leakage.

Bass Automobiles Inc. faces resource leakage

Cloud Cones is a fast-growing chain of ice cream shops. It has acquired an edge over its competitors through its ability to provide a wide array of unique flavors and a hip atmosphere in stores. This advantage of Cloud Cones best exemplifies a capital gain. markup. resource flow. core competency.

core competency

A music distributor that decides to launch a proprietary music streaming service to respond to changes in music consumption trends exhibits dynamic capabilities. T/F

True

You are the manager of Impromptu Printing, a leading print shop. Impromptu's resources include a highly experienced staff and state-of-the-art printing presses. However, your closest competition has started to cut into your market share by offering same-day turnaround on most orders. Although your staffing and equipment is not optimized for rapid production, you decide to start offering a same-day guarantee to your customers. According to the resource-based view, what is wrong with this decision? Employees are often resistant to changes in strategy. You have failed to take into account resource immobility. Your business is not organized to capture value. Customers tend to have negative opinions of firms that imitate other firms.

You have failed to take into account resource immobility

Superlative Productions spent 10 million dollars to buy the rights to a best-selling novel. The company then prepared for production by hiring a screenwriter to adapt the novel, casting the main roles, renting cameras and other equipment, and scouting locations in southern Arizona. Which of the following pairs of resources are both intangible? best-selling novel; locations in southern Arizona money spent to buy rights to the novel; locations in southern Arizona best-selling novel; screenwriter's experience adapting novels money spent to buy rights to the novel; screenwriter's experience adapting novels

best selling novel; screenwriter's experience adapting novels

Threadbare Industries is a new high-end textile company that has raised sufficient capital from multiple sources. It is planning to use its capital to purchase certain assets. Which of the following assets will be the most difficult for Threadbare Industries to acquire using its capital? software brand name a lease for a new building a new CEO

brand name

In the context of SWOT analysis, which of the following best exemplifies a firm's internal weakness? fall in the purchasing power of the firm's customers decline in the firm's market share increased competition in the industry where the firm operates irregularity in the raw materials supply throughout the industry

decline in the firm's market share

According to an evaluation using the VRIO framework, Crocs Shoes was unable to sustain its competitive advantage primarily because its products were invaluable and common. extremely rare. easy to imitate. non-substitutable.

easy to imitate

A firm will fail to create a sustained competitive advantage when the resource bundles exhibit heterogeneity and immobility. source of its competitive advantage is socially complex. source of its competitive advantage is causally ambiguous. fit between its internal strengths and the external environment is static.

fit between its internal strengths and the external environment is static

Given the accelerated pace of technological change, in combination with deregulation, globalization, and demographic shifts, a firm will be successful today only if its resource advantage is not causally ambiguous or socially complex. competitive advantage is derived from static resource or market advantages. resource advantage is maintained for a short period of time. internal strengths change with its external environment in a dynamic fashion.

internal strengths change with its external environment in a dynamic fashion

Which of the following is an implication of high employee turnover in a company? It results in greater immobility and heterogeneity of the company's resources. It makes the source of the company's competitive advantage socially complex. It makes the source of the company's competitive advantage causally ambiguous. It results in a reduction in the company's intangible-resource stocks.

it results in a reduction in the company's intangible-resource stocks

Due to resource immobility, a critical assumption in the resource-based model of a firm, the resource differences between firms last for a long time. competencies and capabilities of all firms in an industry are similar. competitive advantage of a firm exists for a short period of time. resource bundles of a firm can be easily imitated by competitors.

resource differences between firms last for a long time

Which of the following statements accurately describes a firm's resource stock? Resource stocks are a firm's level of resources that are common to competitors. Resource stocks are a firm's level of investments to maintain or build a resource. Resource stocks are a firm's future estimate of both tangible and intangible resources. Resource stocks are a firm's current level of intangible resources.

resource stocks are a firm's current level of intangible resources

Amazon.com's network of distribution centers allow it to drastically reduce its delivery times compared to other online retailers. These distribution centers are examples of Amazon's intangible resources. capabilities. tangible resources. core competency.

tangible resources

Crystal Tech Inc.'s competency in designing and manufacturing efficient microprocessors has made its laptops the most advanced computers in the market. This competency, along with the just-in-time manufacturing system, has enabled Crystal Tech Inc. to increase its profitability by lowering its production costs. Thus, Crystal's competency in designing and manufacturing microprocessors will be considered a(n) ________ resource in the VRIO framework. valuable organized substitute imitable

valuable

Igor's Furniture has seen its profit margins shrink over the past several years as increased competition has driven down furniture prices. You have been tasked with improving the company's margins. Which of the following approaches makes the most sense within the context of strategic activity systems? Install modern manufacturing equipment to improve efficiency. Focus on imitating the most successful products of competitors. Go against the trend and raise prices. Increase spending on online marketing efforts.

Install modern manufacturing equipment to improve efficiency

In the context of SWOT analysis, which of the following best exemplifies a firm's external opportunity? an increase in its employee productivity an increase in its customers' disposable income an increase in its brand equity an increase in its financial resources

an increase in its customers' disposable income

Your company, a small software development firm, has attracted many of the top young programmers in your area. As a result, the apps you produce have been praised for their innovative features and intuitive user experience. According to the bathtub metaphor in the dynamic capabilities perspective, what is the best way for you to protect against resource leakage? Improve the benefits package to retain key employees and reduce turnover. Invest in an online marketing campaign for existing products to retain customers. Attempt to undercut the competition by imitating their top-selling product. Open a satellite office overseas to support the company culture of taking chances.

improve the benefits package to retain key employees and reduce turnover

Beats Electronics has been able to outperform Audio-Technica, Bose, JBL, Skullcandy, Sennheiser, and Sony in the high-end, premium headphone market. Which of the following statements accurately explains one of the main reasons for the success of Beats? It created a perception that owning its products was cool. It produced the highest-quality headphones. It focused on sponsoring future athletic superstars. It emphasized marketing over core competency.

it created a perception that owning its products was cool

Although True Ion Inc. and One Electro Inc. operate in the same consumer electronic industry, True Ion Inc. has better sales and brand equity. This is attributed to True Ion Inc.'s commitment to innovation. The company has adequate financial and human capital to invest in research and development, an area in which One Electro Inc. lags behind. In this scenario, which of the following critical assumptions of the resource-based view of a firm has been illustrated? resource value resource imitation resource immobility resource heterogeneity

resource heterogeneity

Tony's Pizza has been trying to directly copy the strategies of Moonlight Pies. Even though it is evident that the success of Moonlight Pies' success comes from the freshness and variety of ingredients it uses, Tony's Pizza has not been able to introduce the same types of produce into its recipes. This is because Moonlight's network of relationships with local growers, as well as its efficient supply chain, are very difficult to emulate. Which of the following barriers to imitation does this scenario best illustrate? path dependence resource mobility resource homogeneity social complexity

social complexity

During market testing, Sensation Cosmetics (SC) realized that the cosmetics industry was dominated by multiple, well-established brands. These brands mostly sold their products in exclusive outlets and departmental stores. SC management realized that a new entrant would require a different business model to be successful. Thus, SC started selling its products through direct marketing. In this scenario, Sensation Cosmetics accomplished substitution primarily through path dependence. technology transfer. strategic equivalence. knowledge diffusion.

strategic equivalence

Smooth Fusion Inc. is a software company that has built and acquired numerous assets over the years. According to the resource-based view of a firm, which of the following assets of Smooth Fusion Inc. will best enable it to gain and sustain a competitive advantage? the headquarters building owned by the company the expertise acquired by the employees in the company the capital the company raised from its shareholders the cloud computing service that it uses

the expertise acquired by the employees in the company

According to the resource-based view, a firm that differentiates itself from its competitors through its personalized approach to customer service is likely to sustain its competitive advantage for a long time. T/F

true

Which of the following statements accurately brings out the difference between tangible and intangible resources? Tangible resources contribute to a company's competitive advantage, whereas intangible resources have little effect on competitive advantage. Tangible assets can be bought on the open market by anyone with the necessary cash, whereas intangible assets cannot be easily purchased. Tangible assets are difficult for competitors to imitate, whereas intangible assets can be easily replicated. Tangible resources take a longer time to build, whereas intangible assets can be built comparatively easily.

Tangible assets can be bought on the open market by anyone with the necessary cash, whereas intangible assets cannot be easily purchased

Which of the following provides an example of how a firm's valuable resource can be imitated? To compete with Build Your Own's model of the Eiffel Tower, Best Replica came out with a model of the Leaning Tower of Pisa. To compete with Build Your Own's model of the Eiffel Tower, Best Replica came out with a model of a generic medieval cathedral. To compete with Build Your Own's model of the Eiffel Tower, Best Replica came out with a model of a castle from a fantasy movie. To compete with Build Your Own's model of the Eiffel Tower, Best Replica came out with a model of the U.S.S. Enterprise aircraft carrier.

To compete with build your own's model of the eiffel tower, best replica came out with a model of the leaning tower of pisa