When performing internal analysis of firms, how would you answer the question, “why do companies exist?”

Companies exist because they create value for customers in ways that customers are unable to replicate on their own.

Companies exist because they provide a means of investment income for shareholders, who otherwise would be able to invest only in government securities.

Companies exist because they provide a tax base for government to draw upon in creating and maintaining public works projects.

Companies exist because they give college professors something to teach about.

Core competencies are derived from the combination of

key strategic resources and a firm’s capabilities.

export barriers, trade barriers, and credit barriers faced recently by the company

tax policy changes driven by federal programs and R&D grants at the state level.

When company managers formulate strategy decisions resulting from their internal analysis, they are primarily making decisions about how to

obtain and allocate critical and scarce resources.

reduce costs in their industry.

minimize foreign corporate income taxes.

grow their company at any cost.

Value chain analysis consists of systematically analyzing a firm’s key activities that for analysis purposes are categorized into two groups:

primary activities and support activities.

products and service activities.

Business managers are often concerned that just one of their company’s activities will make or break their company’s competitive advantage.However, you know that

their company’s success depends on an array of many key activities, not just one activity.

they are right; it is usually just one single activity that makes or breaks their competitive advantage.

it depends on the industry—sometimes this is true, sometimes it is not true.

they should worry more about their competitor’s activities than their own company’s activities.

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

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

the airline’s ability to navigate federal laws just like its competitors

the airline’s ability to partner at the same airports as their competitors

the airline’s ability to manufacture planes at a cost that is average in the industry

Crocs Shoes was unable to sustain its competitive advantage over their rivals because its key strategic resource was

not costly to imitate by competitors.

valuable in the eyes of the consumer.

CarTsar Inc. is a manufacturer of automobile parts, which it sells to retail auto supply stores. Its core competencies include superior design and engineering capabilities, as well as a highly integrated and efficient supply chain. To sustain its competitive advantage, CarTsar should first

upgrade its engineering department and improve its supply chain.

seek to replicate its nearest competitor’s competency in innovative marketing.

attempt to cut costs by replacing assembly line workers with robots.

diversify its product offerings by developing parts for construction equipment.

Beats Electronics has been able to outperform Audio-Technica, Bose, JBL, Skullcandy, Sennheiser, and Sony in the high-end, premium headphone market. Which of the following statements accurately explains one of the main reasons for the success of Beats?

It created a perception that owning its products was cool.

It produced the highest-quality headphones.

It emphasized marketing over core competency.

It focused on sponsoring future athletic superstars.

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?

the punch presses that produce parts

a reputation for fast customer service

a culture of proactive communication

patents for electronic components

STRIKEBYTE Inc. is a software company that has built and acquired numerous assets over the years. According to the resource-based view of a firm, which of the following assets of STRIKEBYTE Inc. will best enable it to gain and sustain a competitive advantage?

the expertise acquired by the employees in the company

the cloud computing service that it uses

the capital the company raised from its shareholders

the headquarters building owned by the company

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.

Tangible resources contribute to a company’s competitive advantage, whereas intangible resources have little effect on competitive advantage.

Tangible resources take a longer time to build, whereas intangible assets can be built comparatively easily.

Tangible assets are difficult for competitors to imitate, whereas intangible assets can be easily replicated.

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.

ShipING Inc. will be less competitive than Shippity because of its smaller investment in tangible assets.

Judging from the assets listed, ShipING Inc. has probably been in the industry a much shorter time than Shippity.

There is no resource heterogeneity between the two firms, ShipING Inc. and Shippity, as they operate in the same industry.

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.

Resource immobility of the firms will be low.

The industry structure will be far from perfect competition.

Barriers to entry within the industry will be high.

In the context of the resource-based model of competitive advantage, if a successful firm exhibits resource immobility it means that the

firm will have a sustained competitive advantage because of its unique resources that are difficult for others to replicate that are difficult for others to replicate.

rival firms have better accessibility to quality resources, which they will be able to acquire and deploy to their benefit.

competitors can easily replicate or copy the firm’s resource bundles and capabilities.

resources of the firm cannot be effectively deployed within its own organization.

Due to resource immobility, a critical assumption in the resource-based model of a firm, the

resource differences between firms last for a long time.

competitive advantage of a firm exists for a short period of time.

resource bundles of a firm can be easily imitated by competitors.

competencies and capabilities of all firms in an industry are similar.

\In the context of the resource-based model of competitive advantage, which of the following scenarios best exemplifies resource immobility?

PaluniInc. has been able to outperform its competitors because the uniqueness of its employee experience is difficult for competitors to replicate.

Acme Corp. has earned a good reputation among its shareholders by investing more heavily in equipment than in building up brand equity.

TooFirm Inc. has lost its market share because its resources are rigid, inflexible, and static.

Purple Dreams Corp. has been able to gain a competitive advantage because of its ability to efficiently move its resources from one manufacturing unit to another.

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.

In the resource-based model, resources are freely available and mobile, whereas in the perfectly competitive industry structure, resources are highly immobile.

In perfect competition, it is extremely difficult to replicate the resource bundles of a firm, whereas in the resource-based model, it is extremely easy to imitate them.

In the resource-based model, only physical assets of a firm are considered as resources, whereas in perfect competition, a firm’s capabilities and competencies are also considered as resources.

The competitive advantage that one firm has will be short-lived in an industry in which

resource heterogeneity is high.

capabilities of a firm are not easily replicable.

You are the manager of Value Printing, a leading print shop. Value’s resources include a highly experienced staff and state-of-the-art printing presses. However, your closest competition has started to cut into your market share by offering same-day turnaround on most orders. Although your staffing and equipment is not optimized for rapid production, you decide to start offering a same-day guarantee to your customers. According to the resource-based view, what is wrong with this decision?

You have failed to take into account resource immobility.

Customers tend to have negative opinions of firms that imitate other firms.

Employees are often resistant to changes in strategy.

Your business is not organized to capture value

Viral Apparel is the market leader in the sportswear industry. Though most of its resources are common to those of its competitors, a few rare resources have helped the company gain and sustain a competitive advantage. Which of the following assets of Viral Apparel is most likely to be considered a rare resource that is contributing to its competitive advantage?

the company’s land and buildings

the company’s plant and machinery

the company’s raw material supplies

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.

increase the cost of production to add innovative new features.

lower the retail price of its e-reader to attract new customers.

try to imitate some of the features found in competing products.

Chap 4: QTCL

Authored by Vũ Huyền

Other

University

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

High demand for online video streaming options is one of Netflix’s core competencies.

True

False

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The core competencies of a firm are determined by the interplay of its tangible resources and intangible capabilities.

True

False

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

One of Tiffany & Co’s tangible resources is its well-known brand name and reputation for quality timepieces.

True

False

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

According to the resource-based view, a firm that differentiates itself from its competitors through its personalized approach to customer service is likely to sustain its competitive advantage for a long time.

True

False

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

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

True

False

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A music distributor that decides to launch a proprietary music streaming service to respond to changes in music consumption trends exhibits dynamic capabilities.

True

False

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Amazon’s tendency to reinvest a large share of its profits into new services and capabilities exemplifies a low level of resource flows.

True

False

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Chap 4: QTCL

High demand for online video streaming options is one of Netflix’s core competencies.

The core competencies of a firm are determined by the interplay of its tangible resources and intangible capabilities.

One of Tiffany & Co’s tangible resources is its well-known brand name and reputation for quality timepieces.

According to the resource-based view, a firm that differentiates itself from its competitors through its personalized approach to customer service is likely to sustain its competitive advantage for a long time.

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

A music distributor that decides to launch a proprietary music streaming service to respond to changes in music consumption trends exhibits dynamic capabilities.

Amazon’s tendency to reinvest a large share of its profits into new services and capabilities exemplifies a low level of resource flows.

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

Dynamic strategic activity systems help a firm to maintain a competitive advantage for extended periods of time.

A SWOT analysis would provide a definitive answer as to whether a firm’s growing footprint in overseas markets is a strength or weakness.

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