4800 Ch 456
which of the following identifies the resources that can lead to a competitive advantage
VRIO Framework
VRIO Framework
Value, Rarity, Imitability, Organization
book value
a firm's actual costs of assets - depreciation
when competitive advantage is assessed from an analysis of publicly available data, a firm measures its
accounting profitability
support activities
add value indirectly, but are necessary to sustain primary activities
business model
allows firms to describe how they turn strategy into action
dynamic capabilities can be described as
an intangible resource
resources
any assets that a firm can draw on when formulating and implementing a strategy
answering the balanced scorecard question of how we create value challenges managers to develop strategic objectives that ensure
future innovation future competitiveness future organizational learning
core competencies
generated by the interaction of resources and capabilities
in which of the following ways did Dr Dre build the coolness factor of Beats as a core competency
getting endorsements from popular athletes and celebrities using his fame as a music producer
a company's stock price increases if the company
grows faster than expected
what should a firm do in order to be organized to capture value
have good coordinating systems have a good organizational structure
tangible resources
have physical attributes and are visible
value chain perspective
helps leaders understand how competitive advantage arises from the firm's unique activities
strategic fit
increases the likelihood that a firm is able to gain a competitive advantage
isolating mechanisms examples
intellectual property protection social complexity
strategic leaders use internal and external analyses in tandem to create a customized fit between a company's
internal resources and external environment
concept of resource immobility
it is difficult to reproduce the set of resources that a firm lacks in comparison to another firm resource differences between firms can last a long time
when a firm does favorably compared to similar firms
it outperforms
a firms dynamic capabilities allow
it to respond agilely to market changes create market changes
shareholders
legal owners of publicly traded companies
resource based model views resources as
main driver of firm performance
in order to ensure that a firm is implementing the triple bottom line approach successfully,
managers must audit the company's results in fulfilling its social and ecological obligations
primary activities include
operations supply chain management
path dependence
the effect that an early decision in the development of a firm, such as where the firm is established, can eventually have a major influence on final outcomes.
resource stocks
the firm's current level of intangible resources
resource flows
the firm's level of investments to maintain or build a resource
external strengths can be evaluated in part by applying
PESTEL
PESTEL
Political Economic Social Technological Environmental Legal
capabilities are expressed in
a company's culture a company's organizational structure a company's routines
SWOT analysis
a framework that allows managers to synthesize insights obtained from an internal analysis and external analysis
wholesaling is considered
a traditional model for retail
what can cause an outflow of resources from a firm
turnover of employees forgetting knowledge
competitive advantage
when a firm creates more economic value than competing firms
a firm pursuing a successful differentiation strategy
will have a competitive advantage over a competitor that creates a product at equal cost but with a lower reservation price
dynamic capabilities
training employees constantly so that they are equipped to deal with technological changes and advancements
risk capital
the money a shareholder spends for an equity share in a company
when a trade occurs
the consumer and producer both capture some of the economic value
primary activities
Add value directly in transforming inputs into outputs
resources for a firm
cash PPE intellectual property
which of the following can help a firm extend its competitive advantage
causal ambiguity path dependence better expectations of future resource value
a balanced scorecard offers
common financial metrics and a variety of operational measures on customer satisfaction, internal processes, and the company's innovation and improvement activities
balanced scorecard framework enables managers to
communicate and link the strategic vision translate the strategic vision into operational goals implement feedback and organizational learning design and plan business processes
to determine a product's producer surplus
compare the cost of production to the price charged
benchmarks are useful in determining a firm's
competitive advantage
in the dynamic capabilities perspective
competitive advantage derives from actively modifying the resource base
resource based view clarifies a firm's
core competencies
COGS
cost of goods sold
better expectations of future resource value
positively impact a firm's competitive advantage
perfect competitions in the resource based model
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
freemium model
premium services cost money but basic services are free
producer surplus
profit
when a firm tries to meet the prices of its competitors, it typically sacrifices
profitability per unit
which performance dimensions matter in judging the effectiveness of a firm's strategy
qualitative quantitative
time compression diseconomies
refers to the concept that attempting to get a good outcome in less time tends to be ineffective
resource heterogeneity
refers to the idea that a firm is a bundle of resources and capabilities that is unique to the firm
all accounting data
refers to the past
under the wholesale model
retailers sell goods for any price they want
what are the most commonly used metrics for comparing the performance of different companies
return on equity return on assets return on revenue
ROIC
return on invested capital
SG&A
sales, general and administrative expenses
determine market capitalization
share price * number of outstanding shares
when a firm goes bankrupt
shareholders cannot recover their risk capital
the interaction of the many individual systems in the operation of a company often leads to causal ambiguity because of
social complexity
disadvantages of the shareholder value creation approach
stock prices are influenced by the psychological mood of investors stock prices can be highly volatile overall macroeconomic factors have a direct bearing on stock prices
a balanced scorecard is a tool for
strategy implementation
a core competency can help a company achieve which of the following
create higher value for the consumer offer products of comparable value at lower costs than rivals differentiate its products and services
managers implement the blueprint of the business model through
culture processes structures
in a subscription based business model
customers pay for access to a product or service
causal ambiguity
describes a situation in which the cause and effect of a phenomenon are not readily apparent
value chain
describes the internal activities a firm engages in when transforming inputs into outputs
which of the following dimensions make up the triple bottom line
ecological economic social
standard dimensions for measuring competitive advantage
economic value shareholder value accounting profitability
to measure firm level competitive advantage
estimate the economic value created for all products and services offered by the firm
balanced scorecard approach helps managers balance
financial and strategic goals
intangible resources
firm's culture brand equity intellectual property
resource based view
firms are a distinctive collection of resources, capabilities, and competencies
a rare resource is costly to imitate if
firms that do not possess the resource are unable to develop or buy the resource at a comparable cost
a resource is considered valuable when
helps the firm increase its economic value creation resource helps a firm exploit an external opportunity
capabilities of a firm
include managerial skills, deployment of resources, and organizational skills
what is true concerning a firm's business model
indicates the way the firm works with buyers and suppliers details the firm's competitive tactics and initiatives essentially explains how the firm intends to make money
for a balanced scorecard to be effective, managers must
manage objectives according to the balanced scorecard approach translate their strategy into measurable objectives formulate an effective strategy for achieving competitive advantage
if the problem with a business strategy results in causal ambiguity
managers will have a difficult time developing a theory to deal with this problem
the balanced scorecard framework draws from
multiple internal and external performance metrics
SWOT analysis should be used with caution because
opportunities can be threats and strengths can be weaknesses
capabilities
organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically
concept of social complexity
suggests that social and business systems that work in one firm may be hard to imitate due to complex interactions between these systems
accounting and finance are
support activities in a firm's value chain
stakeholder theory
a firm exists within an interconnected network of constituencies, both within and outside the organization, and the firm is responsible to these constituencies
according to the efficient market hypothesis, what is embedded in a stock price
a firm's past a firm's current state expectations of the firm's future performance
a firm trying to compete with the leading firm in a competitive industry can try to negate the leading firm's competitive advantage through
direct imitation substitution
for a firm to sustain competitive advantage over time, the fit between its internal strengths and external environment needs to be
dynamic
resource based view classifies all resources as
tangible or intangible
when the high market valuation of internet based firms is analyzed
the importance of intangibles becomes clear
reservation price
the subjectively determined maximum amount a customer would pay for a product
a better measure of a firm's performance over the long term is
the total return to shareholders
disadvantages of the value creation perspective
the value that a consumer places can vary per moment difficult to determine the value consumers place on a given good large firms find it difficult to estimate economic value created for all products and services offered
how are intangible resource stocks acquired
through investments over time in intangible resources
a resource is rare if
the number of firms that possess it is less than the number of firms required to reach a state of perfect competition