QUIZ 8

The share price of Groupon, a daily-deal website, fell by 90 percent just a year after its successful initial public offering. The firm was not able to sustain its competitive advantage because of the emergence of other daily-deal sites that were able to better serve the needs of local markets and specific population groups. Which of the following is the most accurate inference from this example?

Groupon's competency was not hard to imitate.

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

Isolating mechanisms

How does causal ambiguity act as an isolating mechanism for organizations?

It makes it difficult for the competitors to understand why a company has been so successful.

It is difficult even for Apple's managers to pinpoint the underlying cause of the company's phenomenal success. The term that best applies to this difficulty is known as

casual ambiguity

A firm's resource is most likely to be an internal strength and a core competency when the resource is

valuable and 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

valuable, rare, costly to imitate

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 breakthroughs in computing software and hardware. What is the most likely implication of this example?

A firm must be effectively organized to capture value.

Which of the following is an accurate statement about value chain analysis?

The value chain concept can be applied to all firms, including service firms.

Which of the following describes a situation in which firms acquire resources at a low cost, laying the foundation for a competitive advantage later?

better expectations of future resource value

Intangible assets add great value to a firm primarily because the firm's

knowledge and culture take time to develop and are generally difficult to imitate