MGMT 490 Chapter 4
A ________ is a powerful analytical tool to size up Apple Inc.'s competitive assets in order to determine whether or not those assets can provide the foundation necessary for its competitive success in the marketplace. -value chain analysis -financial and asset management analysis -competitive strength matrix analysis -VRIN test -SWOT analysis
VRIN test
Two of the three best indicators as to how well a company's strategy is working are: -(1) whether customer and employee satisfaction is high, and (2) whether it has more core competencies than close rivals. -(1) whether the company has more competitive assets than it does competitive liabilities and (2) whether its strategy is built around at least two of the industry's key success factors. -(1) whether the company is achieving its stated financial and strategic objectives, and (2) whether customer and employee satisfaction is high. -(1) whether the company is achieving its stated financial and strategic objectives, and (2) whether it is gaining customers and increasing its market share. -(1) if it is subject to weaker competitive forces and pressures than close rivals (a good sign), or (2) if it is disadvantaged by stronger competitive forces and pressures (a bad sign).
(1) whether the company is achieving its stated financial and strategic objectives, and (2) whether it is gaining customers and increasing its market share.
(video) Which of the following would be a good argument for why a resource or capability position would be rare? -A resource or capability is rare because other firms do not possess it. -A resource or capability is rare because it developed over time along a unique path. -A resource or capability is rare because it is protected by a country's legal system. -A resource or capability is rare because it is expensive to develop. -A resource or capability is rare because it is protected by local governments.
A resource or capability is rare because it developed over time along a unique path.
(video) In SWOT analysis it is important to clearly differentiate between "internal" and "external" issues. Select the response that most accurately defines "internal" and "external" issues. -If the issue affects the competitor, it is external. -Internal issues impact the financial performance of the firm. -If a firm no longer exists, but the issues remain, then the issues are external. However, if the issues also no longer exist, then they are internal. -External issues will impact suppliers of the firm. -Imagine the firm grows. If the issue would keep the firm from growth, it is internal.
If a firm no longer exists, but the issues remain, then the issues are external. However, if the issues also no longer exist, then they are internal.
The competitive power of a company's resource strength is not measured by which one of the following tests? -Is the resource rare and something rivals lack? -Is the resource strength something that a company has internally rather than in collaborative arrangements with outsiders? -Is the resource strength easily trumped by the substitute resources/capabilities of rivals? -Is the resource strength hard to copy? -Is the resource strength competitively valuable, having the potential to contribute to a competitive advantage?
Is the resource strength something that a company has internally rather than in collaborative arrangements with outsiders?
(video) In the video, McDonald's introduction of all-day breakfast was said to be an "adjust" strategy as well as a "turn around" strategy. How is this strategic action a "turn around" strategy? -Offering all-day breakfast was expected to increase sales in the 7am to 11am range. -Offering all-day breakfast was expected to reduce costs by eliminating menu complexity. -Offering all-day breakfast was expected to sell more coffee. -Offering all-day breakfast was expected to stem McDonald's revenue decline. -Offering all-day breakfast was expected to improve McDonald's marginal revenue.
Offering all-day breakfast was expected to stem McDonald's revenue decline
(video) Which of the following would be a good argument for why a resource or capability would be valuable? -The resource or capability enables the firm to avoid what other firms do well. -The resource or capability enables the firm to address customer wants. -The resource or capability increases the differentiation for a firm focused on offering a standardized product. -The resource or capability lowers the cost of production for a firm offering a differentiated product. -The resource or capability enables the firm to copy what other firms do well.
The resource or capability enables the firm to address customer wants
____________________ cannot determine how effective a company's current strategy is working. -Whether the company's sales are growing faster, slower, or about the same pace as the industry as a whole, thus resulting in a rising, falling, or stable market share -Whether it has a larger number of competitive assets than competitive liabilities and whether it has a superior quality product -The firm's image and reputation with its customers -Whether its profit margins are rising or falling and how large its margins are relative to those of its rivals -Evidence of improvement in internal processes such as defect rate, order fulfillment, delivery times, days of inventory, and employee productivity
Whether it has a larger number of competitive assets than competitive liabilities and whether it has a superior quality product
When SunPower's managers engage in the process of developing a list of questions to evaluate their company's internal situation, which question does not address the task of evaluating SunPower's resources and competitive position? -What strategic issues and problems merit front-burner managerial attention at SunPower? -How well is SunPower's present strategy working? -Which are SunPower's least and most profitable geographic market segments? -Is SunPower competitively stronger or weaker than key rivals? -How do SunPower's value chain activities impact its cost structure and customer value proposition?
Which are SunPower's least and most profitable geographic market segments?
____________ identifies and assesses a company's resource strengths and weaknesses and its external opportunities and threats. -a SWOT analysis -a competitive asset/liability analysis -a competitive positioning analysis -a strategic resource assessment -company resource mapping
a SWOT analysis
When a company has become proficient in modifying, upgrading, or deepening the company's resources and capabilities in response to its changing environment and market opportunities, it is called the company's: -dynamic capability -core competence -distinct competence -strategic assessment -benchmarking exercise
core competence
(video) The video refers to strategic actions. Select the best definition of a strategic action with respect to SWOT. -a decision by the CEO about how to move forward that takes into account the environmental issues -an action that decreases your product's price in response to a competitor's price cut -an action taken by that firm that responds to important environmental threats -an action taken by the firm that makes use of the firm's important resources and capabilities -a coherent set of goal-directed decisions that addresses the environment the firm competes within by utilizing firm resources and capabilities
a coherent set of goal-directed decisions that addresses the environment the firm competes within by utilizing firm resources and capabilities
a distinctive competence is: -a competitively important activity that a company performs better than its rivals. -an activity that a company performs proficiently that is also central to its strategy and competitive success. -whether customers are aware of the competence and view the competence positively enough to boost the company's brand-name reputation. -an activity that a company has learned to perform with proficiency—a capability, in other words. -whether the competence is one of the industry's key success factors.
a competitively important activity that a company performs better than its rivals.
From 2016 to 2017, Urban Outfitters's debt-to-equity ratio showed: -a favorable increase -a favorable decrease -an unfavorable increase -an unfavorable decrease -neither a favorable nor unfavorable increase or decrease
a favorable increase
From 2016 to 2017, Urban Outfitters's gross profit margins showed which of the following? -a favorable increase -a favorable decrease -an unfavorable increase -an unfavorable decrease -neither a favorable nor unfavorable increase or decrease
a favorable increase
From 2016 to 2017, Urban Outfitters's times-interest-earned ratio showed which of the following? -a favorable increase -a favorable decrease -an unfavorable increase -an unfavorable decrease -neither a favorable nor unfavorable increase or decrease
a favorable increase
A company's dynamic capability is not manifested by its: -capacity to improve existing resources and capabilities -ability to upgrade its R&D resources to drive product innovation -capacity to add new resources and capabilities to the competitive asset portfolio -ability to replace degraded resources with acquired capabilities -ability to keep antiquated resources by disregarding innovative capabilities
ability to keep antiquated resources by disregarding innovative capabilities
A much-used and potent managerial tool for determining whether a company performs particular functions or activities in a manner that represents "the best practice" when both cost and effectiveness are taken into account is: -competitive strength analysis -activity-based costing -resource cost mapping -SWOT analysis -benchmarking
activity based costing
Assigning a weight to each measure of competitive strength assessment is generally analytically superior because: -a weighted ranking identifies which competitive advantages are most powerful. -an unweighted ranking does not discriminate between companies with high and low market shares. -it singles out which competitor has the most competitively potent core competencies. -weighting each company's overall competitive strength by its percentage share of total industry profits produces a more accurate measure of its true competitive strength. -all of the various measures of competitive strength are not equally important.all of the various measures of competitive strength are not equally important.
all of the various measures of competitive strength are not equally important
From 2016 to 2017, Urban Outfitters's return on equity and return on assets showed which of the following? -a favorable increase -a favorable decrease -an unfavorable increase -an unfavorable decrease -neither a favorable nor unfavorable increase or decrease
an unfavorable decrease
From 2016 to 2017, Urban Outfitters's average collection period showed which of the following? -a favorable increase -a favorable decrease -an unfavorable increase -an unfavorable decrease -neither a favorable nor unfavorable increase or decrease
an unfavorable increase
Understanding where a company is competitive requires: -determining whether a company has a cost-effective value chain. -developing quantitative strength ratings for the company and key rivals on each industry key success factor and each pivotal resource, capability, and value chain activity. -identifying a company's core competencies and distinctive competencies (if any). -analyzing whether a company is well positioned to gain market share and be the industry's profit leader. -developing quantitative measures of a company's chances for future profitability
developing quantitative strength ratings for the company and key rivals on each industry key success factor and each pivotal resource, capability, and value chain activity
When a company performs a particular competitively important activity truly well in comparison to its rivals, it is said to have a: -company competence -strategic resource -distinctive competence -core competence -key success factor
distinctive competence
If you were tasked with identifying the strategic issues and problems that merit front-burner managerial attention at SunPower, you would most likely not begin by: -drawing upon the results and conclusions from analyzing SunPower's external environment. -drawing upon the results and conclusions from evaluating SunPower's own resources and competitive position. -drawing up a worry list for SunPower consisting of "how to...," "whether to...," and "what to do about...". -drawing up a list of strategic issues and problems that SunPower faces first. -drawing up a list of issues and problems that SunPower management need to address to improve the company's position and prospects
drawing up a list of strategic issues and problems that SunPower faces first
A single-business company's strategy involves all of the following EXCEPT: -efforts to build on its strengths and avoid partnerships and alliances with other enterprises within its industry. -moves to respond to changing conditions in the macro-environment or in industry and competitive conditions. -efforts to expand or narrow geographic coverage. -functional strategies (R&D, supply chain management, production, sales and marketing, HR, and finance) employed by the company. -planned, proactive moves to attract customers and outcompete rivals via improved product design and higher quality.
efforts to build on its strengths and avoid partnerships and alliances with other enterprises within its industry.
A sustainable competitive advantage is gained when a company: -has durable competitive assets that are central to its strategy and superior to those of rival firms. -has sufficient resources to expedite its strategy. -realizes its inherent weaknesses are transformable to advantages. -can stand out relative to rivals because of resource utilization. -has resources in well-populated geographical locations.
has durable competitive assets that are central to its strategy and superior to those of rival firms.
(video) Intangible resources or capabilities may be a good basis for creating a competitive advantage because: -intangible resources or capabilities are generally sticky to the firm. -intangible resources or capabilities are generally easily transferred. -intangible resource or capabilities are generally easily observed. -intangible resources or capabilities are generally easily acquired. -intangible resources or capabilities are generally rare.
intangible resources or capabilities are generally sticky to the firm.
activity-based costing: -is an accounting system that assigns a company's expenses to whichever activity in a company's value chain is responsible for creating the cost. -involves using benchmarking techniques to develop cost estimates for the value chain activities of each major rival. -is a powerful tool for identifying the different pieces of a company's value chain and classifying them as primary activities and support activities. -involves determining which value chain activities represent variable costs and which represent fixed costs. -is a tool for identifying the activities that cause a company's product to be strongly differentiated from the products of rivals.
is an accounting system that assigns a company's expenses to whichever activity in a company's value chain is responsible for creating the cost
The external market opportunities which are most relevant to a company are the ones that: -can increase market share. -are reinforced by the overall business strategy and reflect the business model. -match up well with the firm's competitive assets, offer the best prospects for growth and profitability, and present the most potential for competitive advantage. -qualify to correct its internal weaknesses and resource deficiencies. -are relevant for defending against the external threats to its well-being.
match up well with the firm's competitive assets, offer the best prospects for growth and profitability, and present the most potential for competitive advantage.
(video) capital intensity: -measures operating expenses as a percentage of revenue. -is higher for firms that keep a lot of extra capital available, in case of emergencies. -measures the amount of revenue generated for every dollar of invested capital. -measures the amount of capital machinery in the business for every dollar of revenue generated. -is higher for firms that recognize revenue on an accrual basis.
measures the amount of revenue generated for every dollar of invested capital.
(video) tax efficiency: -is higher for firms with a high tax rate. -measures the amount of revenue that is taxable for every dollar of invested capital. -measures the effectiveness of the firm to keep its profits on an after-tax basis. -measures the ability of the firm to reduce taxes by internationalizing their operations. -is higher for firms with a strong research and development team.
measures the effectiveness of the firm to keep its profits on an after-tax basis.
(video) operating profit margin: -measures operating expenses as a percentage of revenue. -is higher for firms with a low tax rate. -measures the amount of revenue generated for every dollar of invested capital. -measures the percentage of revenue left over after operating expenses to cover other expenses. -is higher for firms with a high cost of goods sold.
measures the percentage of revenue left over after operating expenses to cover other expenses.
From 2016 to 2017, Urban Outfitters's turnover ratios showed which of the following? -a favorable decrease in both days of inventory and inventory turnover -an unfavorable increase in days of inventory and unfavorable decrease in inventory turnover -a favorable increase in both days of inventory and inventory turnover -a favorable increase in days of inventory and favorable decrease in inventory turnover -neither favorable nor unfavorable increase or decrease in days of inventory and inventory turnover
neither favorable nor unfavorable increase or decrease in days of inventory and inventory turnover
a dynamic capability is the: -ongoing capacity to modify existing resources and capabilities to create new ones. -improvement evaluation process for eliminating waste in the firm. -functional and operating resources management process. -ongoing capability to understand and establish a commitment to resource alignment. -improvement evaluation process for repurposing waste in the firm.
ongoing capacity to modify existing resources and capabilities to create new ones
An option for not remedying an internal cost disadvantage includes: -investing in productivity-enhancing, cost-saving technological improvements. -redesigning the product or some of its components to facilitate speedier and more economical manufacture or assembly. -implementing the use of best practices throughout the company, particularly for high-cost activities. -eliminating some cost-producing activities altogether by revamping the value chain. -performing activities in the same way as done earlier
performing activities in the same way as done earlier
A company's value chain consists of: -steps it goes through to convert its net income into value for shareholders. -primary activities that are foremost in creating value for customers and the requisite support activities. -activities involving product R&D, Technology, and Systems Development. -support activities involving Human Resource Management. -activities involving General Administration.
primary activities that are foremost in creating value for customers and the requisite support activities
A company requires a dynamically evolving portfolio of resources and capabilities to: -assist the strategic planning team in overall direction. -sustain complex manufacturing systems as a strategic recall. -sustain its competitiveness and help drive improvements in its performance. -sustain benefits of high market share as an interest in growth strategies. -transform knowledge into a management style supporting competition in a globally diverse world.
sustain its competitiveness and help drive improvements in its performance
tangible resources include: -human assets and intellectual capital, which can include the talent of the work force and the creativity and innovativeness of certain personnel. -reputational assets, which can include the company's reputation for quality, service, and reliability as well as its reputation for fair dealings with suppliers. -relationships such as alliances that provide access to technologies, specialized know-how, or geographic markets. -technological assets such as patents, copyrights, and innovation technologies. -company culture and incentive system, which includes the norms of behavior and business principles.
technological assets such as patents, copyrights, and innovation technologies
Costs and price differences among competing companies can have origins in activities performed by: -the company's internally performed activities (its own value chain) compared to the cost structure of the internally performed activities of rival companies. -value chains of the company's suppliers. -value chains of a company's distributors and retail dealers and forward channel allies. -the company's internally performed activities (its own value chain), but also on costs in the value chain of its suppliers and distribution channel allies. -whether the company has a longer or shorter value chain than its close rivals.
the company's internally performed activities (its own value chain), but also on costs in the value chain of its suppliers and distribution channel allies.
A company resource weakness or competitive deficiency: -represents a problem that needs to be turned into a strength because weaknesses prevent a firm from being a winner in the marketplace -causes the company to fall into a lower strategic group than it otherwise could compete in -prevents a company from having a distinctive competence -is something a company lacks or does poorly (in comparison to rivals) or a condition that puts it at a disadvantage in the marketplace -usually stems from having a missing link or links in the industry value chain
usually stems from having a missing link or links in the industry value chain
