MQM 385 EXAM 1 PREP // QUIZ 4

Cartzy Inc., Cartific Inc., and Clustercart Inc., are three consumer-product retailing companies. Their products consist primarily of day-to-day items that are easy to imitate and sell. All three companies use the same resources and capabilities in the production and distribution of their products. Judging from the market conditions described in this scenario, which of the following statements is true?

Any advantage that one firm has will be short-lived.

Buzztronic is a market leader in consumer electronics. If Ficolee and Ficola, companies that manufacture televisions, develop the same customer knowledge base and create products with the same customer appeal as Buzztronic, then

Buzztronic will have a resource that is valuable but no longer rare.

Intellectual property (IP) protections such as trademarks or patents are proven methods of establishing permanent barriers to imitation (T/F)

FALSE

Accounting, human resources, and research and development (R&D) are examples of primary activities that add value directly to the value chain. (T/F)

FALSE *Accounting, human resources, and research and development are examples of support activities that add value indirectly.

One of Tiffany & Co's tangible resources is its well-known brand name and reputation for quality timepieces. (T/F)

FALSE *Brand equity is an example of an intangible resource. Tangible resources include a well-trained workforce, advanced machinery, or expansive facilities.

High demand for online video streaming options is one of Netflix's core competencies. (T/F)

FALSE *Core competencies are unique strengths possessed by a firm which allow it to differentiate its products and services from its rivals. Consumer demand is external to the firm. An example of Netflix's core competencies is its use of proprietary algorithms to determine its customer's needs.

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?

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.

When conducting a _______________, it's best to examine both PESTEL and Porter's five forces analyses because these tools focus on the external environment.

SWOT analysis *The "O" and "T" in SWOT are used to identify external factors, while the other answer options are all internal to the firm.

Shippity and ShipING Inc. are two competing firms in the same industry. Shippity's tangible assets are valued at $15 billion and its intangible assets are valued at $35 billion. ShipING Inc.'s tangible assets are valued at $5 billion and its intangible assets are valued at $45 billion. What can be concluded from this information?

It is likely that ShipING Inc. is better enabled than Shippity to gain and sustain a competitive advantage. *It can be concluded that ShipING Inc. is better positioned than Shippity to gain and sustain a competitive advantage. Competitive advantage is more likely to spring from intangible rather than tangible resources. Tangible assets, like buildings or computer servers, can be bought on the open market by any comers who have the necessary cash. However, a brand name must be built, often over long periods of time.

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

Path dependence

The core competencies of a firm are determined by the interplay of its tangible resources and intangible capabilities. (T/F)

TRUE *Core competencies emerge when managers skillfully combine tangible resources such as machinery and cash with capabilities such as an efficient company culture.

Which of the following statements accurately brings out the difference between tangible and intangible resources?

Tangible assets can be bought on the open market by anyone with the necessary cash, whereas intangible assets cannot be easily purchased.

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? (D!)

a.) culture of proactive communication b.) patents for electronic components c.) a reputation for fast customer service d.) the punch presses that produce parts

The ___________________ suggest(s) that because the external environment changes, strategic leaders must choose their current and future investments carefully over time in order to best maintain their firm's competitive advantage.

dynamic capabilities perspective ****Dynamic capabilities allow a firm to integrate, build, and reconfigure internal and external competences to address rapidly changing environments.

As manager of a relatively new company, you are tasked with analyzing company resources to identify core competencies capable of supporting a competitive advantage. Which of the following resources is most likely to generate a competitive advantage?

enthusiastic company culture

Facing stiff competition in the e-reader market, Smart Reads wants to protect its competitive advantage by increasing the perceived value of its reader. Smart Reads' best strategy to accomplish this would be to

highlight the number of celebrities who use Smart Reads e-readers.

Given the accelerated pace of technological change, in combination with deregulation, globalization, and demographic shifts, a firm will be successful today only if its

internal strengths change with its external environment in a dynamic fashion.

Southwest Airlines (SWA) and Alaska Airlines both compete as point-to-point airlines, but they draw upon different resource bundles. This example best illustrates which of the following assumptions regarding the resource-based view?

resource heterogeneity

Amazon.com's network of distribution centers allow it to drastically reduce its delivery times compared to other online retailers. These distribution centers are examples of Amazon's

tangible resources.

Which of the following will most likely be considered as an airlines core competency?

the airline's ability to make its fleet more fuel efficient than their competitors