Chapter 3

Question 1

Core competencies

Answer 1

Collective learning in the organization, related to the coordination of diverse production skills and the integration of mutiple streams of technologies

Focus: technology

Visibility: Often not visible to customers and competitors

Investment: process of continuous improvement and enhancement of chosen technologies

Question 2

Core capabilities

Answer 2

Set of business processes strategically understood and implemented in a manner that is of value to the customer

Focus: organizational processes

Visibility: generally visible to customers and competitors

Investment: variety of interlocking support systems

Question 3

Competitive advantage

Answer 3

When a company’s profitability is greater then the average profitability of all companies in its industry

Question 4

Sustained competitive advantage

Answer 4

When a company maintains above-average profitability over a number of years

Question 5

Distinctive core competencies/capabilities

Answer 5

Firm-specific strengths that allow a company to differentiate its products and/or achieve lower costs to achieve a competitive advantage

Question 6

Resources

Answer 6

Assets of a company including:
- basic factors of production (labor, land, management, buildings, and equipment)
- advanced factors of production (process, knowledge, organizational architecture, IP)

Question 7

Process knowledge (advanced factor of production)

Answer 7

Knowledge of the internal rules, routines, and procedures of an organization that managers can leverage to achieve organizational objectives

Question 8

Organizational structure (advanced factor of production)

Answer 8

The combination of the organizational structure of a company
- Control systems
- Incentive systems
- Organizational culture
- Human capital strategy

Question 9

Intellectual property (advanced factor of production)

Answer 9

Knowledge, research, and information that is owned by an organization

Question 10

VRIO framework

Answer 10

A framework used to determine the quality of a company’s resources

Question 11

Barriers to imitation

Answer 11

Make it difficult for a competitor to copy and company’s distrinctive competencies

Question 12

Building blocks of competitive advantage

Answer 12

• Efficiency
• Quality
• Innovation
• Customer responsiveness