Business Strategy Chapter 4
external threat
All purpose Tires, Inc. is planning to build a manufacturing plant in Tornado Alley. according to the SWOT analysis, this location is considered to be an
supports activities
Chat Zone Inc., a telecommunication company, had been drastically losing its market share due to tough competition in the industry. ChatZone Inc. can best solve its problem by working on its
incremental
Each activity a firm performs along the horizontal value chain adds ______ value
$350,000
GreenHarvest Inc. has used $350,000 from its total annual earning of $1,250,000 to invest in the research and development of a multi-purpose vaccine. In monetary terms, what would GreenHarvest Inc.'s resource flows be?
isolating mechanisms
____________ are barriers to imitation that prevent rivals from competing away the advantage a firm may enjoy
if managed effectively, existing core competencies can help sustain the competitive advantage indefinitely
when evaluating the sustainability of a firms competitive advantage, which of the following statements is not true?
when past decisions act as constraints for the current dynamic capabilities
which of the following is not a condition that can help a firm sustain its competitive advantage
core competencies
A resource-based view of a firm provides a model that systematically aids in identifying
core rigidity
Clean Rinse Shampoo has been the leader of hair cleaning products for about 40 years. as a result, other shampoo companies that began to offer organic shampoo gained a competitive advantage over Clean Rinse. This case is an example of
short lived
Dynamic capabilities are essential for moving beyond a(n) ______________ advantage
it is likely that BC inc. is better enabled than GN corp. to gain and sustain a competitive advantage
GN corp. and BC inc. are two competing firm in the same industry. what can be concluded form this information?
primary activity
IN a generic value chain, a firms after sales service will be referred to as its _____________
SWOT analysis
Juanita, a manager at a multinational organization, is trying to carefully scan and link the firms internal environment to its external environment. which of the following managerial tolls is Juanita employing?
resource immobility
Kaleidoscope inc is a leading international apparel company. which of the following assumptions of the resource based model of competitive advantage does this scenario best illustrate?
rare
Next Door cellular is a leading mobile network operator. the companys brand name is the only resource that distinguishes it from the other operators. this unique asset that has helped the company gain a competitive advantage will be considered as a(n) ______________ resource in the VRIO framework.
path dependence
Nova Electronics, a leading pager manufacturer, recently declared itself bankrupt. this was attributed to a decision the company made in the past. which of the following does this scenario best illustrate?
yes, because the new packaging made the product more attractive in the eyes of consumers
Rice Dazzle Inc. has been making the same breakfast cereal for 50 years. sales have plummeted. According the the VRIO framework, is the new packaging a valuable resource for Rice Dazzle?
the land owned by Riya, which reduces cost of operations
Rya has recently started a restaurant in a commercial area where there are many other established restaurants an popular fast food chains. Rita has also invested a huge amount on the interiors of the restaurant and in equipping the kitchen with the latest appliances used by her competitors. in their scenario, which of the following is the most valuable resource for Riya's business?
resource immobility
SWA has enjoyed a sustained competitive advantage, allowing it to outperform its competitors over several decades. Continental and Delta attempted to copy SWA with their offering of Lite and Song. which of the following is this case an example of?
the expertise acquired by the employees in the company
Smooth Fusion inc. is a software company, which 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?
perfect competition exists
The competitive advantage that one firm has will be short lived in an industry where
groupons competency was not hard to imitate
The share price of Groupon, a daily deal website, fell by 90% just a year after its successful initial public offering. which of the following is the most accurate inference from this example?
inferior results
To gain a competitive advantage, Lopez Industries obtained financing and then used this extra capital to produce the same amount of gaskets in a one month period that it normally produces in a two-month period. which of the following is the most likely outcome of this endeavor?
contribute to the firms strategic position as either low cost leader or differentiator
To help a firm achieve a competitive advantage, each distinct activity performed in the value chain needs to
casual ambiguity
___________ describes a situation in which the cause and effect of a phenomenon are not readily apparent
valuable and costly to imitate
a firms resource is most likely to be an internal strength and core competency when the resource is
casual ambiguity
a firms resources and capabilities are costly to imitate. this is because rival companies do not clearly understand the relationship between the resources and capabilities controlled by the firm. in this case, the firms competitive advantage is protected against imitation by
valuable, rare, costly to imitate
according to the VRIO framework, a firm can gain a competitive advantage if it has resources that are ________ and captured by an organized firm
strategic decision have long term consequences
due to pat dependence
resource differences between firms last for a long time
due to resource immobility, a critical assumption in the resource based model of a firm, the
shift quickly
dynamic capabilities are especially relevant for surviving and competing in markets that
it makes it difficult for the competitors to understand why a company has been so successful
how does casual ambiguity act a an isolating mechanism for organizations
casual ambiguity
it is difficult even for Apples managers to pinpoint the underlying cause of the comp nays phenomenal success. the term that best applies to this difficulty is known as
capabilities
organizational and managerial skills that find their expression in a comp nays structure, routines, and culture are referred to as
Bass Automobiles Inc. faced resource leakage
several senior managers recently left Bass Automobile Inc. and went to work at Unicorn Autos Inc., a rival company. what does this imply?
the companys machinery
the management of a company is assessing the value of all the tangible resources the company owns. which of the following will be included in this assessment?
all firms have access to the same resources
the perfectly competitive industry structure differs from the resource based model in its view that
internal activités a firm engages in when transforming inputs into outputs
the value chain describes the
primary activity
to increase its competitive advantage, HRV automobiles seeks to improve the efficiency of its production plants. by doing this, HRV is addressing a ______________ in the value chain analysis
Kristins cosmetics attempted to imitate how Monicas Makeup combined its management and product development systems with little success
which of the following best exemplifies social complexity as an isolating mechanism?
the value chain concept can be applied to all firms, including service firms
which of the following is an accurate statement about value chain analysis?
the firms organizational culture
which of the following is an example of a firms intangible resources?
PESTEL analysis
which of the following management tools will help determine the external opportunities and threats that affect a firm?
VRIO framework
which of the following management tools will help determine whether a firms resources, capabilities, and competencies are strengths or weaknesses?
reputation for quality
which of the following resources is a firms resource stock?
tangible assets can be bought on the open market, whereas intangible assets cannot be easily purchased
which of the following statement accurately brings out the difference between tangible and intangible resources?
firm will have a sustained competitive advantage because of its unique resources
In the context of the resource based model of competitive advantage, if a successful firm exhibits resource immobility it means that the
True 3 Inc. has been able to outperform its competitors because the uniqueness of its resources is difficult to replicate
In the context of the resource based model of competitive advantage, which of the following scenarios best exemplifies resource immobility?
resource heterogeneity
Althouse True Ion inc. and One Electro Inc operate in the same consumer electronic industry, True ion inc has better sales and brand equity. which of the following critical assumptions of the resource-based view of a firm has been illustrated?
core competency
Amazon.com's ability to provide the largest selection of items online, combined with superior IT systems and customer service, can be referred to as its
better expectations of fire resource value
Ambrosia Inc., a leader chocolate producer anticipated that the prices of cocoa beans would double in less than three years. this would disrupt the availability of cocoa in the industry. which of the following isolating mechanisms does this scenario best illustrate?
socially complex
An observer may conclude that the organizational culture of Zappos, an online retailer for shoes and clothing might be the basis for its competitive advantage. thus, the source of Zappos competitive advantage is said to be
the change in content delivery from ownership via downloads to streaming on demand
Apple paid $3 billion dollars to acquire Beats. This is the largest acquisition in Apples history. which of the following provided a reason for this acquisition?
resource immobility
As a result of ____, a critical assumption in the resource based model of a firm, the resource difference that exist between firms are difficult to replicate.
it created a perception that owning its products was cool
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 Beat?
casual ambiguity
Competitors have found it extremely difficult to imitate Gene Electronics inc valuable resources, capabilities, or competencies. Gene Electronics inc has been protected from losing its competitive advantage as a result of
brand name
Coral Think inc. is a new company in the publishing industry. it 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 Coral Think inc to acquire using its capital?
valuable
Crystal Tech Inc.'s competency in designing and manufacturing efficient microprocessors has made its laptops the most advanced computer in the market. Thus Crystals competency in designing and manufacturing microprocessors will be considered a(n) _____ resource in the VRIO framework.
strategic equivalence
During market testing, Sensation Cosmetics (SC) realized that the cosmetics industry was dominated with multiple well established brands. A new entrant like SC 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
using its internal strengths to exploit external opportunities
In the context of SWOT analysis, a firm can develop an offensive strategic option primarily by
core competency
Dandelions Max is a consumer electronics company. they have an edge over its competitors through its ability to provide breakthrough technology at the lowest price in the market. this advantage of Dandelions Max best exemplifies a
EasyOpen's patent expired after 20 years
EasyOpen Inc. gained a patent for an electronic corkscrew. which of the following would most likely be the reason for this development?
a firm must be effectively organized to capture value
Even though many valuable, rare, and inimitable resources were generated at Xerox's Palo Alto Research Center (PARC), the management at Xerox's headquarters failed to gain a competitive advantage by exploiting the breakthrough in computing software and hardware. what is the most likely implication of this example?
the companys chemical patents
Gene Craft Inc. is the market leader in the pharmaceutical industry. most of their resources are common to those of its competitors a few rare resources have helped the company gain and sustain a competitive advantage. which of the following assets of Gene Craft inc. is most likely to be considered a rare resource that is best contributing to its competitive advantage?
internal strengths change with its external environment in a dynamic fashion
Given the accelerated pace of technological change, in combination with deregulation, globalization, and demographic shifts, a firm will only be successful today if its
any advantage that one firm has will be short lived
Home Value inc., Max Cart inc., and Nice Necessities Inc are three consumer-product retailing companies. their products consist primarily of day to day items that are easy to imitate and sell. which of the following is an implication of the market condition indicated in the scenario?
Invoro will have a resource that is valuable but no longer rare
If Finolo and Ethver, companies that manufacture TV's develop the same customer knowledge base and create products that provide the same customer appeal as Invoro, a market leader in consumer electronics, then
low
In knowledge intensive industries, the marginal costs after initial invention are
an increase in its customers' disposable income
In the context of SWOT analysis, which of the following best exemplifies a firms external opportunity?
knowledge and culture take time to develop and are generally difficult to imitate
Intangible assets add great value to a firm primarily because the firms
Onyxo Inc. should start working on LED and 3D TV technologies to adapt its core competency to suit the external environment
Onyx Inc. a consumer electronics company is the leading manufacturer of LCD televisions. according to the dynamic capabilities perspective, what should Onyx Inc. do?
production systems that reduce costs by 30% below the current industry standards
Otion inc. is a relatively new firm in the consumer electronics industry. the company primary objective is to become the market leader in less than 5 years, for which it has to gain and sustain a competitive advantage. int eh context of the VRIO framework, which of the following resources should Otion inc. primarily focus on the achieve its objective?
it results in a reduction in the company's intangible resource stocks
which of the following is an implication of high employee turnover in a company?
time cannot be compressed at will
Path dependence rests on the notion that
direct imitation
Pulse Mobiles Inc. is a cell phone manufacturing company. Its latest range of smartphones bears a straight resemblance to the Y series range of smartphones fro 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.?
the SWOT analysis
____________ allows managers to synthesize insights obtained from an internal analysis of a comp nays strength and weaknesses with those from an analysis of external opportunities and threats
best selling novel; screenwriters experience adapting novels
Superlative Productions spent 10 million dollars to buy the rights to a best-selling novel. Which of the following pairs of resources are both intangible?
rare
The "Gold Crisps" potato wafers manufacture by True Foods Inc. have been the highest selling wafers in the market. This competency of True Foods Inc. will be considered as a(n) _____________ resource in the VRIO framework.
the competition infringed on Gogo's patent of the "diagonal assembly system."
The "diagonal assembly system" was a production system pioneered by the automobile company GOgo. Recently GOgo was able to sue a competitor and won the suit, thereby receiving $100 million in damages. which of the following would most likely enable Gogo to win such a lawsuit?
resource bundles of firms competing in the same industry are unique to some extent and thus differ from one another
The resource-based view of a firm assumes that the
path dependence
_______________ describes a process in which the options one faces in a current situation are limited by decisions made in the past
scan a firms internal and external environments
To make the SWOT analysis an effective management tool, a strategist must first
high costs involved in imitation
True Moto Corp. (TMC) is a leading automobile company. the company has been able to sustain its competitive advantage primarily due to its high quality and efficient electronic motors. which of the following resource attributes listed in the VRIO framework has helped TMC sustain its competitive advantage?
the resources of Trust Machines Inc. are difficult to replicate or imitate
Trust Machines inc. is a company that manufactures and markets consumer electronics. according to the resource based view of competitive advantage, which of the following is an implication of this situation?
path dependence
VRD systems inc. took many decades to build its core competencies, and these competencies were based primarily on the decisions made by the company's top management in the past. this process is called
social mobility
Value Autos Inc. has been trying to directly copy the strategies of Honk Autos Inc. even though it is evident that Honk success comes fro its just in time inventory system. which of the following barriers to imitation does this scenario best illustrate?
to compete with Build Your Owns model of the Eiffel Tower, Best Replica came out with a model of the Leaning Tower of Pisa
Which of the following provides an example of how a firms valuable resource can be imitated?
easy to imitate
With regard to the VRIO framework, Crocs shoes was unable to sustain its competitive advantage primarily because its products were
dynamic capability
_________ describe a firms ability to create, deploy, modify, reconfigure, upgrade, or leverage its resources over time in its quest for competitive advantage.
core competencies
__________ are best described as unique strengths, embedded deep within a firm, that allow a firm to differentiate its products and services from those of its rivals, creating higher value of the customer or offering products and services of comparable value at lower cost
it is the firms level of investments to maintain or build a resource
which of the following statements accurately describes a firms resource flow?
fit between its internal strengths and the external environment is static
a firm will fail to create a sustained competitive advantage when the
dynamic capabilities perspective
according to the _______, competitive advantage in the outflow of a firms ability to modify and leverage its resource base in a way that enables it to gain and sustain competitive advantage in a constantly changing environment
marketing and sales
according to the value chain analysis, which of the following is a primary activity?
helps the firm to gain and sustain a competitive advantage
creating resources that meet the VRIO criteria is strategically important to a firm because it
in perfect competition, all firms have access to the same capabilities, whereas in the resource based model, resource differences exist between firms in the same industry
how are the critical assumptions of the resource based model of a firm fundamentally different from the way in which a firm is viewed in the perfectly competitive industry structure?
it will result in perfect competition
if a resource is common
the firm will be able to maintain a competitive advantage for a long period
if a resource is rare or unique to a particular firm, then
decline in the firms market share
in the context of SWOT analysis, which of the following best exemplifies a firms internal weakness?
increase in a firms customer loyalty
in the context of the SWOT matrix, which of the following best exemplifies a firms internal strength?
Resource stocks are a firms current level of intangible resources
which of the following statements accurately describes a firms resource stock?
bundles of resources, capabilities, and competencies differ across firms
which of the following statements correctly describes resource heterogeneity?
a firms competitive advantage is derived from static resource or market advantages
which of the following statements fails to bring out the essence of the dynamic capabilities perspective
time compression diseconomies
when the laptop market overtook the desktop market, Blue tech inc., a leader in desktop technology was left at a competitive disadvantage. the company failed because most of its competitors had already been in the laptop market for five years. Blue Tech incs. models were inferior to the ones in the market. in this scenario, Blue Tech inc. failure can be best attributed to
resources are tangible and intangible; capabilities are intangible
which of the following accurately summarizes the difference between the resources and capabilities of a firm?
the local fast food chain Easy Hot Dogs used its wholesome image to maintain its competitive advantage against stiff competition
which of the following applies to the Strength- Threats quadrant of the SWOT matrix?
IBM successfully transformed itself multiple times in the data information industry over a period of more than 100 years
which of the following best explains why IBM has been able to maintain its competitive advantage?
better expectations of future resource value
which of the following describes a situation in which firms acquire resources at a low cost, laying the foundation for a competitive advantage later?
A problem with this framework is that a strength can also be a weakness, and that an opportunity can also simultaneously be a threat
which of the following is a drawback of the SWOT analysis?
assets such as landing and building owned by a firm
which of the following is an example of a firms resources?
