Chapter 3 Flashcards
True or False. Innovation may be a vital path to efforts to develop sustainable competitive advantages
True
________ are the foundation for strategy, and unique bundles of resources generate _______ that lead to wealth creation
- Resources
- Competitive advantages
3 factors of sustainability of a competitive advantage (RAI)
- The rate of core competence obsolescence because of environmental changes
- The availability of substitutes for the core competence
- The imitability of the core competence
_____ and _____ are not inherently valuable, but they create value when the firm can use them to perform certain activities that result in a competitive advantage
Resources and capabilities
True or False. Traditional factors such as labor costs, access to financial resources and raw materials, and protected or regulated markets remain sources of competitive advantage to a higher degree
False. Traditional factors such as labor costs, access to financial resources and raw materials, and protected or regulated markets remain sources of competitive advantage, but to a lesser degree
It is the ability to study an internal organization in ways that are not dependent on the assumptions of a single country, culture, or context.
global mindset
It is measured by a product’s performance characteristics and its
attributes for which customers are willing to pay
value
Firms create value by innovatively bundling and leveraging their ____ and _____
resources and capabilities
creating _____for customers is the source of above-average returns for
a firm
value
It is the firm’s most important sources of competitive advantage
core competencies
The _____of a firm, in addition to the results of analyses of its _____, ______, and _____ should drive its selection of strategies. The ______ held by the firm and their context are important when formulating a strategy
- core competencies
- general, industry, and competitor
environments - resources
3 conditions of difficult managerial decisions concerning resources, capabilities, and core competencies (ICU)
- uncertainty
- complexity
- intraorganizational conflict
It is the capability of making successful decisions when no obviously correct model or rule is available or when relevant data are unreliable or incomplete
judgment
conditions of _____ is regarding characteristics of the general and the industry environments, competitors’ actions, and customers’ preferences
uncertainty
condition of _______ regarding the interrelated causes shaping a firm’s environments and perceptions of the environments
complexity
condition of _____ among people making managerial decisions and those affected by them
intraorganizational conflict
____, ______, and ______ are the foundation of competitive advantage
resources, capabilities, and core competencies
______ are bundled to create organizational_______. In turn, capabilities are the source of a firm’s _________, which are the basis of competitive advantages
- resources
- capabilities
- core competencies
True or False. Resources alone yield a competitive advantage.
False. Resources alone do not yield a competitive advantage.
True or False. Competitive advantage is generally based on the unique bundling of several resources
True
They are assets that can be seen and quantified. Production equipment, manufacturing facilities, distribution centers and formal reporting structures are examples of tangible resources
tangible assets
They are assets that are rooted deeply in the firm’s history and have accumulated over time
intangible assets
4 types of tangible resources (FOPT)
- financial
- organizational
- physical
- technological
It is a tangible resource that refers to the firm’s ability to generate internal funds and borrowing capacity
financial resources
It is a tangible resource that refers to the firm’s formal reporting structure and its formal planning, controlling, and coordinating systems
organizational resources
It is a tangible resource that refers to the sophistication and location of a firm’s plant and equipment, as well as the access to raw materials
physical resources
It is a tangible resource that refers to the stock of technology, such as patents, trademarks, copyrights, and trade secrets
technological resources
It is an intangible resource that refers to the knowledge, trust, managerial capabilities, and organizational routines
human resources
It is an intangible resource that refers to the ideas, scientific capabilities, and capacity to innovate
innovation resources
It is an intangible resource that refers to the reputation with customers, brand name, perceptions of product quality, durability, and reliability, and reputation with suppliers, for efficient, effective, supportive, and mutually beneficial interactions and relationships
reputational resources
_______ resources are a superior source of core competencies
intangible resources
True or False. Tangible resources can be leveraged while intangible resources cannot be leveraged.
False. Tangible resources cannot be leveraged while intangible resources can be leveraged.
It exists when resources have been purposely integrated to achieve a specific task or set of tasks.
capabilities
________ are capabilities that serve as a source of competitive advantage for a firm over its rivals
core competencies
It is referred to as the crown jewels of a
company
core competencies
What are the two tools help firms identify and build their core competencies
- four specific criteria for sustainable competitive advantage
- value chain analysis.
capabilities that are _____, ______, ______, and _____ are core competencies
Valuable
Rare
Costly to imitate
Nonsubstitutable
For a _____ to be a core competence, it must be _____ and ____ from a customer’s point of view. For a ______ to be sustainable, the core competence must be _____, and ______from a competitor’s point of view
- capability
- valuable and unique
- competitive advantage
- inimitable and nonsubstitutable
True or False. A sustained competitive advantage is achieved only when competitors cannot duplicate the benefits of a firm’s strategy or when they lack the resources to attempt imitation
True
It allows the firm to exploit opportunities or neutralize threats in its external environment.
valuable capabilities
They are capabilities that few, if any,
competitors possess.
rare capabilities
They are capabilities that other firms cannot easily develop.
costly-to-imitate
Reasons why capabilities can be costly to imitate (USC)
- unique historical conditions
- the link between the firm’s capabilities and its competitive advantage is causally ambiguous
- social complexity
They are capabilities that do not have strategic equivalents
nonsubstitutable capabilities
True or False. The strategic value of capabilities increases as they become easier to substitute
False. The strategic value of capabilities increases as they become more difficult to substitute
It allows the firm to understand the parts of its operations that create value and those that do not
value chain analysis
It is a template that firms use to understand their cost position and to identify the multiple means that might be used to facilitate the implementation of a chosen business-level strategy
value chain
They are involved with a product’s physical creation, its sale and distribution to buyers, and its service after the sale.
primary activities
It provides the assistance necessary for the primary activities to take place.
support activities
It is the purchase of a value-creating activity from an external supplier
outsourcing
In internal analysis, firms must identify their _____, and ______ in resources, capabilities, and core competencies
strengths and weaknesses
It is an evaluation tool used by an organization to assess its internal environment.
internal analysis
