Chapter 4

Question 1

Resource-based view

Answer 1

Certain resources and capabilities specific to one company that are not shared by competitors.

Question 2

SWOT Analysis

Answer 2

A tool for determining a firm’s strengths (S), weaknesses (W), opportunities (O), and threats (T).

Question 3

Resources/Capabilities

Answer 3

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

Question 4

Tangible resources/capabilities

Answer 4

Assets that are observable and easily quantified

Financial, Physical, Technological, Organizational

Question 5

Intangible resources/capabilities

Answer 5

Assets that are hard to observe and difficult (if not impossible) to quantify.
Human, Innovation, Reputational

Question 6

Value Chain

Answer 6

Series of activities used in the production of goods and services that make a product or service more valuable

Question 7

Benchmarking

Answer 7

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

Question 8

Commoditization

Answer 8

Process of market competition through which unique products that command high prices and high margins gradually lose their ability to do so, thus becoming commodities

Question 9

Do not outsource when

Answer 9

• Cheaper in-house
• Requires specialized assets which few suppliers can provide
• Core product or core part

Question 10

Outsourcing

Answer 10

Turning over an organizational activity to an outside supplier that will perform it on behalf of the focal firm

Question 11

Offshoring

Answer 11

Outsourcing to an international or foreign firm

Question 12

In/Onshoring

Answer 12

Outsourcing to a domestic firm

Question 13

Captive sourcing

Answer 13

Setting up subsidiaries abroad so that the work done is in-house but the location is foreign. Also known as foreign direct investment (FDI).

Question 14

Resource-based view

Answer 14

focusing on the value (V), rarity (R), imitability (I), and organizational (O) aspects of resources and capabilities

Question 15

Value

Answer 15

Adding resources lead to competitive advantage

Question 16

Rarity

Answer 16

Valuable and rare resources provide competitive advantage

Valuable and common resources at best lead to competitive parity

Question 17

Imitability

Answer 17

Valuable and rare resources offer competitive advantage when they are hard for competitors to imitate

Question 18

Casual ambiguity

Answer 18

Difficulty of identifying the actual cause of a firm’s successful performance

Question 19

Organization

Answer 19

Firms must be properly organized to take full advantage of the resources and capabilities they possess

Question 20

Complementary assets

Answer 20

Combination of numerous resources and assets that enable a firm to gain a competitive advantage
Example: expertise and talent involved in making a film production

Question 21

Social complexity

Answer 21

Socially intricate and interdependent ways firms are typically organized
Opposite: LEGO view - employees are identical and replaceable

Question 22

Original equipment manufacturer (OEM)

Answer 22

Firm that executes design blueprints provided by Western firms

Question 23

Original design manufacturer (ODM)

Answer 23

Firm that executes manufacturing based on their own design blueprints

Question 24

Original brand manufacturer (OBM)

Answer 24

Firm that executes manufacturing based on their own design blueprints and sells the product under their own name