Strat Man Test 2
Resoruces
Assets that a company can draw on when crafting & executing a strategy (tangible or intangible)
Blue Ocean Strategy
Business-level strategy that successfully combines differentiation and cost-leadership activities using value innovation to reconcile the inherent trade-offs.
Triple Bottom Line
Economic, social, and environmental impact metrics used to determine an organization's success. (Profits, people, planet)
Resource-based view
Firm performance, which is superior to the average performance of the firms in an industry, is mainly determined by the characteristic internal to the firm
support activities
Research & development, info systems, HR, accounting & finance, infrastructure
VRIO Framework
Valuable Rare Costly to Imitate Organized to capture value
Dynamic Capabilities Perspective
a firm's ability to create, deploy, modify, reconfigure, upgrade, or leverage its resources in its quest for competitive advantage
core rigidity
a former core competency that turned into a liability because the firm failed to hone, refine, and upgrade the competency as the environment changed
One of the reasons that Kodak filed for bankruptcy was due to its inability to reinvest, hone, and upgrade its once impressive film camera capabilities. Ultimately, Kodak's core competences became A) core rigidities. B) value chain activities. C) strategic resources. D) costly to imitate.
a. core rigidities
________ is best described as the difference between a buyer's willingness to pay for a product or service and a firm's total cost to produce it. A) Economic value created B) Break-even point C) Consumer surplus D) Cost of capital
a. economic value created
According to the resource-based view, a firm's competitive advantage often stems from its A) intangible resources. B) tangible resources. C) dynamic strengths. D) external environment.
a. intangible resources
Value chain analysis consists of systematically analyzing a firm's key activities that for analysis purposes are categorized into two groups: A) primary activities and support activities. B) products and service activities. C) customers and suppliers. D) profits and losses.
a. primary & support
Customer service and ________ are two of the value drivers that managers can utilize when trying to improve a firm's differentiation strategic position. A) product uniqueness B) experience curve C) cost of input factors D) economies of scale
a. product uniqueness
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? A) resource heterogeneity B) resource homogeneity C) resource allocation process D) resource immobility
a. resource heterogenity
WeComput Inc.'s competency in designing and manufacturing efficient microprocessors has made its laptops the most advanced computers in the market. This competency, along with the just-in-time manufacturing system, has enabled WeComput Inc. to increase its profitability by lowering its production costs. Thus, WeComput's competency in designing and manufacturing microprocessors will be considered a(n) _____ resource in the VRIO framework. A) valuable B) substitute C) imitable D) organized
a. valuable
Gr8t Food is a chain of "fast casual" restaurants that sells its menu items at higher prices than its competitors. The restaurant has a large customer base due to its wide product portfolio and superior customer service. Which of the following generic business strategies has Gr8t Food adopted in this scenario? A) cost-leadership B) differentiation C) market penetration D) product diversification
b. Differentiation
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 A) Ficolee and Ficola will have a VRIO resource. B) Buzztronic will have a resource that is valuable but no longer rare. C) Buzztronic will have a sustainable competitive advantage in the industry. D) Buzztronic will have a resource that is rare but no longer valuable
b. valuable but not rare
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 A) core competency. B) intangible resources. C) tangible resources. D) capabilities.
c. tangible resources
intangible resources
culture, knowledge, brand equity, reputation, intellectual property
Economies of Scale
decreases in cost per unit as output increases
primary activities
firm activities that add value directly by transforming inputs into outputs as the firm moves a product or service horizontally along the internal value chain
support activities
firm activities that add value indirectly, but are necessary to sustain primary activities
Tangible Resources
labor, capital, land, buildings, plant, equipment, supplies
resource heterogeneity
model assumption that a firm is a buncle of resources & capabilities differ across firms
Capabilities
organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically
RBV (Resource Based View)
provides a method to study how a firm's internal resources and capabilities are a source of competitive advantage
resource immobility
resources tend to be "sticky" and don't move easily from firm to firm
primary activities
supply chain management, operations, distribution, marketing and sales, after-sales service
Value Chain
the internal activities a firm engages in when transforming inputs into outputs; each activity adds incremental value
core competencies
unique strengths, embedded deep within a firm, that are critical to gaining and sustaining competitive advantage