Ch. 4 & 5 Flashcards
Which of the following were resources and capabilities that helped Five Guys gain a competitive advantage and develop into a successful restaurant chain?
Carefully choosing the supplier of the potatoes for their fries
Focusing on such details as store layout and design
The core competencies of a business are generated by the interaction of ______.
resources and capabilities
A core competency can help a company achieve which of the following?
to offer products of comparable value at lower cost than rivals can
to create higher value for the consumer to differentiate its products and services
Which of the following are examples of resources for a firm?
cash
intellectual property buildings
Which of the following statements are true about the capabilities of a firm?
They concern the deployment of resources.
They include managerial skills. They include organizational skills.
Which of the following best describes the core competency of the Five Guys Burgers and Fries company?
Making high-quality burgers without limiting costs
What are the distinct and fine-grained business processes that enable firms to add incremental value by transforming inputs into goods and services?
Activities
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?
resources
capabilities core competencies
True or false: Core competencies should be continuously improved so that the firm can acquire or maintain a competitive advantage.
True
A(n) ______ is a unique strength, embedded deep within a firm, that is critical to gaining and sustaining competitive advantage.
Core competency
The resource-based view classifies all resources as ______.
Tangible or intangible
Unlike capabilities, resources can be both ______
Tangible or intangible
Capital, land, buildings, and plants are examples of ______ resources.
Tangible
The organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically are called ______.
capabilities
______ do not have physical attributes.
Intangeble resources
Which are examples of activities that create value?
invoicing a customer
taking an order from a customer making a physical delivery of a product
Why is competitive advantage more likely to spring from intangible rather than tangible assets?
Tangible assets can be bought on the open market.
In a highly competitive industry, what are the likely consequences of a firm neglecting its current core competencies?
Competitors will gain market share.
Competitors will outperform the firm by creating competitive advantage. Competitors will develop equivalent or superior skills.
According to the resource-based view of a firm, what are defined as any asset, capability, or competency that a firm can draw upon when formulating and implementing strategy?
resources
The resource-based model views resources as ______.
the main driver of firm performance
According to the resource-based model, a firm is assumed to be a unique bundle of resources, capabilities, and competencies.
True
______ resources have physical attributes and are visible.
tangible
What critical assumption comes from the insight that bundles of resources differ across firms?
resource heterogeneity
A firm’s culture, brand equity, and intellectual property are examples of ______.
intagible resources
What does the concept of resource immobility imply?
that reproducing the set resources from another company is difficult
that resource differences between firms can last a long time
______ has a greater chance of arising from intangible resources than from tangible resources.
Competitive advantage
Using the “resource-based view” helps firms ______.
gain or maintain competitive advantage
Which of the following are considered resources under the resource-based view of the firm?
Assets
Competencies Capabilities
Resource ______ and resource ______ are the key assumptions behind the resource-based model of the firm.
heterogeneity; immobility
Which of the following identifies the resources that can lead to a competitive advantage?
VRIO framework
Which of the following is true according to the assumption of resource heterogeneity?
Resource bundles vary from company to company.
______ refers to the assumptions that resources tend to be “sticky” and do not move easily from firm to firm.
Resource immobility
A resource is considered ______ if it helps a firm to deal with an external threat.
Valuable
In the resource-based model, ______ is possible if all firms have access to the same resources and capabilities, which means that any competitive advantage acquired by a firm will be brief.
perfect competition
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
According to the resource-based view of a firm, what are defined as any asset, capability, or competency that a firm can draw upon when formulating and implementing strategy?
resources
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
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 firm trying to compete with the leading firm in a competitive industry can try to negate the leading firm’s competitive advantage through which of the following?
direct imitation
substitution
What critical assumption comes from the insight that bundles of resources differ across firms?
resource heterogeneity
In order to be successful, a firm must have a resource that is valuable, rare, costly to imitate, and the firm must ______.
be organized to capture value
Which of the following are situations in which a resource is considered valuable?
The resource helps the firm increase its economic value creation (V-C).
The resource helps a firm exploit an external opportunity.
Groupon’s ______ was temporary since its resource was neither rare nor costly to imitate.
competitive advantage
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
Which of the following can help a firm extend its competitive advantage?
better expectations of future resource value
path dependence
intellectual property protection
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
Isolating mechanisms are considered to be ______.
barriers to imitation
Javier, the owner of Javier’s Tacos, has noticed that residents of his town are flocking to a new taco truck in increasing numbers. After doing some research, Javier learns that consumers enjoy the food truck because almost all the taco ingredients are locally sourced. Javier decides to add locally sourced ingredients to his menu. This is an example of ______.
direct imitation
Susan is a consultant for a grocery store chain that wants to open several new stores in the St. Louis area. She has selected several sites for the company to consider based in part on projected population growth near those sites. What isolating mechanism does this best illustrate?
better expectations of future resource value
What should a firm do in order to be organized to capture value?
have a good organizational structure
have good coordinating systems have a rare and valuable resource
Groupon’s initial success was largely due to the company’s Blank______.
first mover advantage
______ describes a process in which the options one faces in the current situation are limited by decisions made in the past.
Path dependence
VRIO resources can lay the foundation of a competitive advantage, no competitive advantage can be sustained indefinitely.
True
Intellectual property protection and social complexity are examples of _____ mechanisms, which help a firm sustain a competitive advantage.
isolating
Time compression diseconomies occur when a firm ______.
attempts to reach an outcome in a reduced amount of time
Better expectations of future resource value ______ a firm’s competitive advantage.
positively impact
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
______ suggests that sometimes even random events may have a large impacts on an outcome.
Path dependence
Understanding the cause and effect of a strategy may help managers avoid ______.
Casual ambiguity
Which of the following can help a firm extend its competitive advantage?
path dependence
intellectual property protection better expectations of future resource value
“Time compression diseconomies” refers to the concept that Blank______.
attempting to get a good outcome in less time tends to be ineffective
The interaction of the many individual systems in the operation of a company often leads to causal ambiguity because of ______.
social complexity
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
______ describes a situation where the cause and effect of a phenomenon are not readily apparent.
Causal ambiguity
Which isolating mechanism provides a competitive advantage for a successful company when the source of that company’s success is difficult to specify?
causal ambiguity
Which isolating mechanism is set up to legally prevent companies from copying products that give a firm a competitive advantage?
intellectual property protection
VRIO resources can lay the foundation of a competitive advantage, no competitive advantage can be sustained indefinitely.
True
______ describes a situation in which different social and business systems interact with each other.
Social complexity
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
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
Dynamic capabilities are most relevant in ______.
changing markets
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
According to the dynamic capabilities perspective, competitive advantage stems from a firm’s ability to ______.
agilely transform its resource base
Which of the following are intangible resources that can be protected as intellectual property?
trademarks
copyrights trade secrets
How are intangible resource stocks acquired?
through investments over time in intangible resources
Which of the following can help a firm extend its competitive advantage?
better expectations of future resource value
path dependence intellectual property protection
What are actions that strategic leaders of a company can take to increase their firm’s intangible resource stocks?
retain key employees
promote in-house recertification programs make ongoing investments in company resources
For a firm to sustain any competitive advantage over time, the fit between its internal strengths and external environment needs to be Blank______.
dynamic
The two types of value chains are value chains, which are ____ vertical value chains, and ______ value chains, which are horizontal value chains.
Blank 1: industry
Blank 2: firm