Strategic Management Chapter 4

Capital, land, buildings, and plants are examples of ______ resources

tangible

The resource-based view classifies all resources as ______.

tangible or intangible

______ resources have physical attributes and are visible.

Tangible

According to the dynamic capabilities perspective, competitive advantage stems from a firm's ability to ______.

agilely transform its resource base

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

The organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically are called ____

capabilities

______ has a greater chance of arising from intangible resources than from tangible resources.

Competitive advantage

True or false: A competitive advantage is most often maintained for very long periods of time.

False. No competitive advantage can be sustained indefinitely.

______ do not have physical attributes.

Intangible resources

______ refers to the assumptions that resources tend to be "sticky" and do not move easily from firm to firm.

Resource immobility

One of the most popular tools used by firms to evaluate their current situation and future prospects is the ______

SWOT analysis

Which of the following are situations in which a resource is considered valuable? (Check all that apply.)

The resource helps a firm exploit an external opportunity. The resource helps the firm increase its economic value creation (V-C).

Which of the following statements are true about the capabilities of a firm? (Check all that apply.)

They include managerial skills. They include organizational skills. They concern the deployment of resources.

Capabilities include which of the following? (Check all that apply.)

a company's organizational structure a company's culture a company's routines

What insights gained from a SWOT analysis would lead McDonald's to consider developing healthier food items for its menu?

a growing health consciousness among customers

According to the dynamic capabilities perspective, competitive advantage stems from a firm's ability to ____

agilely transform its resource base. In the dynamic capabilities perspective, competitive advantage is the result of a firm's capacity to modify and leverage its resource base to address the constantly changing environment.

Which of the following are considered resources under the resource-based view of the firm? (Check all that apply.)

assets competencies capabilities

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

Which of the following can help a firm extend its competitive advantage? (Check all that apply.)

better expectations of future resource value intellectual property protection path dependence

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.)

capabilities resources core competencies

Which of the following are examples of resources for a firm? (Check all that apply.)

cash buildings intellectual property

Dynamic capabilities are most relevant in ______.

changing markets

According to the value chain perspective, ______ are located in the network that connects different, but related activities within a firm.

core competencies

A(n) ______ is a unique strength, embedded deep within a firm, that is critical to gaining and sustaining competitive advantage

core competency

If a firm's resource is valuable, rare, costly to imitate, and the firm is organized to exploit it, this resource is a ______.

core competency

According to the VRIO framework, a rare resource is ______ if firms that do not possess the resource are unable to develop or buy the resource at a comparable cost.

costly to imitate

Javier, the owner of Javier's Tacos, has noticed that residents of his town are flocking to a new taco truck in increasing numbers. After doing some research, Javier learns that consumers enjoy the food truck because almost all the taco ingredients are locally sourced. Javier decides to add locally sourced ingredients to his menu. This is an example of ______.

direct imitation

Accounting and finance are ______ activities in a firm's value chain.

support

The resource-based model views resources as _____

the main driver of firm performance

A core competency can help a company achieve which of the following? (Check all that apply.)

to offer products of comparable value at lower cost than rivals can to create higher value for the consumer to differentiate its products and services

A firm trying to compete with the leading firm in a competitive industry can try to negate the leading firm's competitive advantage through which of the following? (Check all that apply.)

direct imitation substitution

A firm's dynamic capabilities allow it to respond agilely to market changes, as well as to ______.

create market changes

______ are the firm's level of investments to maintain or build a resource.

Resource flows

Research and development, information systems and human resources are examples of ______ activities.

support

True or false: Core competencies should be continuously improved so that the firm can acquire or maintain a competitive advantage.

True: If core competencies are not regularly improved, competitors might acquire core competencies that will lead to a competitive advantage.

______ is a framework that allows mangers to synthesize insights obtained from internal and external analysis.

SWOT analysis

What are actions that strategic leaders of a company can take to increase their firm's intangible resource stocks? (Check all that apply.)

make ongoing investments in company resources promote in-house recertification programs retain key employees

Which are examples of activities that create value? (Check all that apply.)

making a physical delivery of a product taking an order from a customer invoicing a customer

True or false: The value chain concept is applicable primarily to high-tech firms in rapidly changing environments.

False. The value chain concept can be applied to basically any firm.

______ refers to the idea that a firm is a bundle of resources and capabilities that is unique to the firm.

Resource heterogeneity

Why is competitive advantage more likely to spring from intangible rather than tangible assets?

Tangible assets can be bought on the open market.

In the dynamic capabilities perspective, competitive advantage derives from ______.

actively modifying of the resource base.The term "dynamic" refers to capabilities that are being actively changed.

Core competencies

are a subset of an organization's capabilities that drive its ability to gain and sustain competitive advantage. They are unique strengths that are embedded deep within a firm.

The ______ perspective is a model that emphasizes a firm's ability to modify and leverage its resource base in a way that enables it to sustain competitive advantage in a constantly changing environment.

dynamic capabilities

The internal activities of a firm that for transforming inputs into outputs consist of ________ activities, which add value directly, and ______activities, which add value indirectly

primary ; support

A resource is ______ if the number of firms that possess it is less than the number of firms required to reach a state of perfect competition.

rare

According to the VRIO framework, in order for a firm to gain a temporary competitive advantage, a resource must be at least both _____

rare and valuable

While the ______ clarifies a firm's core competencies, the ______ helps leaders understand how competitive advantage arises from the firm's unique activities.

resource-based view; value chain perspective

According to the resource-based view of a firm, what are defined as any asset, capability, or competency that a firm can draw upon when formulating and implementing strategy?

resources

In order to avoid making costly mistakes due to the potential shortcomings of the SWOT analysis, a manager should ______

take results from the SWOT analysis with "a grain of salt"

Unlike capabilities, resources can be both ______.

tangible and intangible

What does the concept of resource heterogeneity imply?

that each firm has different resources

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

Core competencies of a business are generated by the interaction of ______.

resources and capabilities

What can cause an outflow of intangible resource stocks from a firm? (Check all that apply.)

turnover of employees forgetting knowledge

A resource is considered ______ if it helps a firm to deal with an external threat.

valuable

In a highly competitive industry, what are likely consequences of a firm's neglecting its current core competencies? (Check all that apply.)

Competitors will gain market share. Competitors will outperform the firm by creating competitive advantage. Competitors will develop equivalent or superior skills.

True or false: According to the resource-based model, a firm is assumed to be a unique bundle of resources, capabilities, and competencies.

True

By definition, resource immobility suggest that resources are ______ to move from firm to firm.

difficult

Which insights gained from a SWOT analysis could lead McDonald's to open new restaurants in China? (Check all that apply.)

Growth in emerging economies and market share decline in developed economies. McDonalds' financial strength and brand name.

The purpose of a SWOT analysis is to ______.

form a strategy that is tailored to the firm's unique strengths and weaknesses and the opportunities and threats in its environment

Using the "resource-based view" helps firms ______.

gain or maintain competitive advantage

Resource ______ and resource ______ are the key assumptions behind the resource-based model of the firm.

heterogeneity; immobility

In contrast to primary activities, support activities add value ______, but are necessary to sustain primary activities.

indirectly. Support activities do not add value directly.

A firm's culture, brand equity, and intellectual property are examples of ______.

intangible resources

The value chain describes ______ of a firm.

internal activities

When strategizing about possible competitive advantages, a major advantage of the SWOT analysis is that it allows managers to simultaneously consider ______.

internal and external factors

The SWOT analysis should be used with caution because ____

opportunities can be threats and strengths can be weaknesses

Which of the following are examples of business activities? (Check all that apply.)

order taking invoicing customers delivery of products

In the resource-based model, ______ is possible if all firms have access to the same resources and capabilities, which means that any competitive advantage acquired by a firm will be brief.

perfect competition

Marketing, sales, and distribution are ______ activities in a firm's value chain.

primary

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

primary

Competitive advantage is gained in the value chain through which of the following types of activities? (Check all that apply.

primary support

What are examples of intangible resource stock a company may have? (Check all that apply.)

reputation for quality engineering expertise dynamic capabilities

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

VRIO framework

VRIO framework is the strategic process that begins with a vision statement and continues through strategic implementation