Chapter 4

Question 1

• The two best indicators of how well a firm’s

strategy is working are:

Answer 1

Whether the firm is recording gains in financial
strength and profitability.
Whether the firm’s competitive strength and market
standing is improving.

Question 2

A company’s strategy and business model when exploiting resources that are

Answer 2

Valuable, Rare, Inimitable, Not substitutable

Question 3

is a competitive asset that is owned

or controlled by a firm.

Answer 3

resource

Question 4

is the capacity of a firm to

competently perform some internal activity.

Answer 4

capabilities

Question 5

is a proficiently performed
internal activity that is central to a company’s
strategy and competitiveness.

Answer 5

core competency

Question 6

A core competence that is performed with a
very high level of proficiency is referred to as
a

Answer 6

distinctive competency

Question 7

Companies that lack a stand-alone resource that
is competitively powerful may nonetheless
develop a competitive advantage through
resource bundles that enable the superior
performance of

Answer 7

a

Question 8

Useful tools for analyzing cost structures

Answer 8

Value chain analysis

Benchmarking