Chapter 3

Question 1

resource-based view

Answer 1

A leading perspective of strategy that suggests that differences in firm performance are most fundamentally driven by differences in firm resources and capabilities

Question 2

resource & capability

Answer 2

The tangible and intangible assets a firm uses to choose and implement its strategies

Question 3

dynamic capability

Answer 3

A firm’s capacity to build and protect competitive advantage, including the ability to sense and seize opportunities and reconfigure existing assets

Question 4

tangible resources and capabilities

Answer 4

Observable and quantifiable resources and capabilities that are physical

Question 5

intangible resources and capabilities

Answer 5

Hard-to-observe and difficult-to-codify resources and capabilities

Question 6

design thinking

Answer 6

An iterative process in which firms seek to
- understand users
- challenge assumptions
- solve problems in a creative way

Question 7

sensing

Answer 7

Abilities to discover opportunities

Question 8

seizing

Answer 8

Abilities to capture value from opportunities

Question 9

reconfiguration

Answer 9

Abilities to remain flexible by redesigning
- business models
- realigning assets
- revamping routines

Question 10

value chain

Answer 10

Goods and services produced through a chain of vertical activities that add value

Question 11

benchmarking

Answer 11

Examination as to whether a firm has resources and capabilities to perform a particular activity in a manner superior to competitors

Question 12

commoditization

Answer 12

A process of market competition through which unique products that command high prices and high margins generally lose their ability to do so—these products thus become “commodities”

Question 13

outsourcing

Answer 13

Turning over all or part of an activity to an outside supplier to improve the performance of the focal firm

Question 14

offshoring

Answer 14

International/foreign outsourcing

Question 15

onshoring

Answer 15

Outsourcing to a domestic firm

Question 16

captive sourcing

Answer 16

• Setting up subsidiaries to perform in-house work in foreign locations
• Conceptually identical to foreign direct investment (FDI)

Question 17

VRIO framework

Answer 17

A resource-based framework that focuses on the aspects of resources and capabilities which include
- value (V)
- rarity (R)
- imitability (I)
- organizational (O)

Question 18

causal ambiguity

Answer 18

The difficulty of identifying the causal determinants of successful firm performance

Question 19

complementary asset

Answer 19

Noncore assets that complement and support the value-adding activities of core assets

Question 20

ambidexterity

Answer 20

Ability to use one’s both hands equally well. In management jargon, this term has been used to describe capabilities to simultaneously deal with paradoxes (such as exploration versus exploitation)

Question 21

social complexity

Answer 21

The socially complex ways of organizing (typical of many firms)

Question 22

strategic sweet spot

Answer 22

the overlap of customer needs and the company’s capabilities

Question 23

hypercompetition

Answer 23

A way of competition centered on dynamic maneuvering intended to unleash a series of small, unpredictable, but powerful actions to erode the rival’s competitive advantage

Question 24

business process outsourcing (BPO)

Answer 24

Outsourcing of business processes such as
- loan origination
- credit card processing
- call center operations

Question 25

original equipment manufacturer (OEM)

Answer 25

A firm that executes design blueprints provided by other firms and manufactures such products

Question 26

original design manufacturer (ODM)

Answer 26

A firm that both designs and manufactures products

Question 27

original brand manufacturer (OBM)

Answer 27

A firm that designs, manufactures, and markets branded products

Question 28

reshoring

Answer 28

Moving formerly offshored activities back to the home country of the focal firm

Question 29

The title of Chapter 3

Answer 29

Leveraging Resources and Capabilities