GLB Capstone Midterm (Chapter 4)

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

True

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

agilely transform its resource base

Which isolating mechanism provides a competitive advantage for a successful company when the source of that company's success is difficult to specify?

causal ambiguity

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

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

create market chnages

Casual Ambiguity

describes a situation in which the cause and effect of a phenomenon are not readily apparent

resource immobility

describes the insight that resources tend to be "sticky" and don't move easily from firm to firm.

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 customized strategy that considers the unique resources of the company while considering the external environment creates ______.

a strategic fit between them

Activities

distinct and fine-grained business processes that enable firms to add incremental value by transforming inputs into goods and services EX: order taking, physical delivery of products, or invoicing customers

The culture of Zappos is hard to imitate because it consists of numerous, diverse interactions among its employees, processes, procedures, and norms, that create which of the following?

social complexity

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

Time compression diseconomies

trying to achieve the same outcome in a short time period, even with higher investments, tends to lead to inferior results

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

Rare & Valuable

______ are the firm's current level of intangible resources.

Resource stocks

______ are any assets that a firm can draw on when formulating and implementing a strategy.

Resources

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

SWOT Analysis

______ resources have physical attributes and are visible.

Tangible

VRIO Framework

implied in the resource-based model, identifying certain types of resources as key to superior firm performance.

The value chain describes ______ of a firm.

internal activities

valuable resource

is one that enables the firm to exploit an external opportunity or offset an external threat

capabilities

organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically +they are by nature intangible

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

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?

resource

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

what does isolating mechanism include ?

- Better expectations of future resource value - path dependence - casual ambiguity - social complexity - intellectual property (IP) Protection

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 - Never using the highest-priced vendor for a product - Carefully choosing the supplier of the potatoes for their fries

What are the characteristics of a strategic activity system as it applies to firms? (Check all that apply.)

- It consists of interconnected activities. - It is socially complex. - It is causally ambiguous.

In which of the following ways did Dr. Dre build the coolness factor of Beats headphones as a core competency? (Check all that apply.)

- by getting endorsements for the headphones from popular athletes - by using his fame as a music producer to promote the headphones - by creating custom headphones that were worn publicly by musician celebrities

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.)

- core competencies - resources - capabilities

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

- delivery of products - invoicing customers - order taking

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

- engineering expertise - dynamic capabilities - reputation for quality

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

- primary - support

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

- turnover of employees - forgetting knowledge

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

Capabilities

Dynamic capabilities are most relevant in ______.

Changing markets

strategic activity system

Conceives of a firm as a network of interconnected activities that can be the foundation of its competitive advantage

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

Difficult

Groupon's initial success was largely due to the company's ______.

first mover advantage

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

gain or maintain competitive advantage

______ describes a process in which the options one faces in the current situation are limited by decisions made in the past.

Path dependence

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

Core competencies

Which isolating mechanism is set up to legally prevent companies from copying products that give a firm a competitive advantage?

Intellectual Property Protection

What does VRIO stand for ?

Valuable Rare, costly to Imitate. And finally, the firm itself must be Organized to capture the value of the resource

resource-based view

a model that systematically aids in identifying core competencies

isolating mechanisms

barriers to imitation that prevent rivals from competing away the advantage a firm may enjoy

The resource-based model views resources as ______.

the main driver of firm performance

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

true

True or false: To maintain a competitive advantage, a strategic activity system needs to change over time.

true

Core Competencies

unique strengths embedded deep within a firm.

Resources

any assets such as cash, buildings, machinery, or intellectual property that a firm can draw on when crafting and executing a strategy. +resources can be either tangible or intangible

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

Resource flows

______ describes a situation in which different social and business systems interact with each other.

Social complexity

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

Tangible assets can be bought on the open market.

Time compression diseconomies occur when a firm ______.

attempts to reach an outcome in a reduced amount of time

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

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

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

resource heterogeneity

assumption in the resource-based view that a firm is a bundle of resources and capabilities that differ across firms. +requires looking more critically at the resource bundle of firms competing in the same industry b/c each bundle is unique to some extent.

Isolating mechanisms are considered to be ______.

barriers to imitation

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?

casual ambiguity