SB Chapter 4

A(n) ______ is a unique strength, embedded deep within a firm, that is critical to gaining and sustaining competitive advantage.

Core competency

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

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

Path dependence

Which of the following can help a firm extend its competitive advantage? (Check all that apply.)

Path dependence. Intellectual property protection. Better expectations of future resource value.

______ activities add value directly by transforming inputs into outputs as the firm moves a product or service horizontally along the internal value chain.

Primary

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

Social complexity

Capital, land, buildings, and plants are examples of ______ resources.

Tangible

______ resources have physical attributes and are visible.

Tangible

Unlike capabilities, resources can be both ______.

Tangible and Intangible

The resource-based view classifies all resources as ______.

Tangible or Intangible

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

The resource-based model views resources as ______.

The main driver of firm performance

How are intangible resource stocks acquired?

Through investments over time in intangible resources

A core competency can help a company achieve which of the following? (Check all that apply.)

To offer products of comparable value at lower cost than rivals can. To differentiate its products and services. To create higher value for the consumer.

Which of the following are intangible resources that can be protected as intellectual property?

Trademarks. Trade Secrets. Copyrights.

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

True

VRIO resources can lay the foundation of a competitive advantage, no competitive advantage can be sustained indefinitely.

True

The interaction of the many individual systems in the operation of a company often leads to causal ambiguity because of ______.

Social complexity

According to the VRIO framework, a rare resource is ______ if firms that do not possess the resource are unable to develop or buy the resource at a comparable cost.

Costly to imitate

Strategic fit ______ the likelihood that a firm is able to gain a competitive advantage.

Increases

In contrast to primary activities, support activities add value ______, but are necessary to sustain primary activities.

Indirectly

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

Intellectual property protection

Accounting and finance are ______ activities in a firm's value chain.

Support

A firm's network of interconnected activities is referred to a strategic activity system because activities that are interconnected are very difficult for competitors to copy effectively.

True

Which of the following is not considered an isolating mechanism?

Uncertainty about future resource value

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

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

A strategic fit between them

"Time compression diseconomies" refers to the concept that ______.

Attempting to get a good outcome in less time tends to be ineffective.

Time compression diseconomies occur when a firm ______.

Attempts to reach an outcome in a reduced amount of time

According to the VRIO framework, to fully exploit the competitive potential of its resources, capabilities, and competencies, a firm must ______.

Be organized to capture value

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 ambuiguity

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

True or false: The value chain concept is applicable primarily to high-tech firms in rapidly changing environments.

False

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. Carefully choosing the supplier of the potatoes for their fries.

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.

Resource ______ and resource ______ are the key assumptions behind the resource-based model of the firm.

Heterogeneity; Immobility

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 causally ambiguous. It is socially complex

Which of the following best describes the core competency of the Five Guys Burgers and Fries company?

Making high-quality burgers without limiting costs

Primary activities include which of the following? (Check all that apply.)

Operations Supply chain management

A resource is ______ if the number of firms that possess it is less than the number of firms required to reach a state of perfect competition.

Rare

Which of the following is true according to the assumption of resource heterogeneity?

Resource bundles vary from company to company

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

Resource flows

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

Resources

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.)

Resources Capabilities Core competencies

Identify the framework that allows managers to synthesize insights obtained from internal and external analysis.

SWOT analysis

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

SWOT analysis

The concept of social complexity suggests that ______.

Social and business systems that work for one firm may be hard to imitate because of complex interactions between these systems

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

The ______ is a theoretical model that explains and predicts what resource attributes underpin competitive advantage. It identifies which types of resources are key to firm performance.

VRIO framework

A resource is considered ______ if it helps a firm to deal with an external threat.

Valuable

The VRIO framework is used to evaluate a firm's resources. VRIO is an acronym for which of the following?

Valuable Rare Imitate

The ______ describes the internal activities a firm engages in when transforming inputs into outputs.

Value chain

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

rare and valuable

Core competencies of a business are generated by the interaction of ______.

resources and capabilities

For a firm to sustain any competitive advantage over time, the fit between its internal strengths and external environment needs to be ______.

Dynamic

What should a firm do in order to be organized to capture value? (Check all that apply.)

Have a good organizational structure. Have a rare and valuable resource. Have good coordinating systems.

Intellectual property protection and social complexity are examples of ___ mechanisms, which help a firm sustain a competitive advantage.

Isolating

___ suggests that sometimes even random events may have a large impacts on an outcome.

Path dependence

When strategizing about possible competitive advantages, a major advantage of the SWOT analysis is that it allows managers to simultaneously consider ______.

Internal and external factors

Strategic leaders use internal and external analyses in tandem to create a customized fit between a company's ______.

Internal resources and external environment

Which of the following are situations in which a resource is considered valuable? (Check all that apply.)

The resource helps a firm exploit an external opportunity. The resource helps the firm increase its economic value creation (V-C)