CHAPTER 5

Question 1

A name that identifies a particular company’s product in the mind of the consumer

Answer 1

brand

Question 2

The mix of activities a company performs to earn a profit.

Answer 2

business model

Question 3

A corporation’s ability to exploit
its resources.

Answer 3

capability

Question 4

The process of analyzing and ranking possible investments in terms of the additional outlays and additional receipts that will result from each investment.

Answer 4

capital budgeting

Question 5

A cross-functional integration and coordination of capabilities.

Answer 5

competency

Question 6

An assemblage of legally independent firms (subsidiaries) operating under one corporate umbrella but controlled through the subsidiaries’ boards of directors.

Answer 6

conglomerate structure

Question 7

A representation that indicates how durable and imitable
an organization’s resources and capabilities are.

Answer 7

continuum of sustainability

Question 8

A collection of corporate capabilities that cross divisional borders and are widespread within a corporation, and is
something that a corporation can do exceedingly well

Answer 8

core competencies

Question 9

A collection of beliefs, expectations, and values learned and shared by a corporation’s members and transmitted
from one generation of employees to another.

Answer 9

corporate culture

Question 10

A widely held perception of a company by the general public

Answer 10

corporate reputation

Question 11

A firm’s competencies that are superior to those of competitors.

Answer 11

distinctive competencies

Question 12

An organizational structure in which employees tend to be functional specialists organized according to product/market distinctions

Answer 12

divisional structure

Question 13

The rate at which a firm’s underlying resources and capabilities depreciate or become obsolete

Answer 13

durability

Question 14

A process in which unit costs are reduced by making large numbers of the same product.

Answer 14

economies of scale

Question 15

A process in which unit costs are reduced when the value chains of two separate products or services share activities, such as the same marketing channels or manufacturing facilities.

Answer 15

economies of scope

Question 16

A conceptual framework that states that unit production costs decline by some fixed percentage each time the total accumulated volume of production in units doubles.

Answer 16

experience curve

Question 17

Knowledge that can be easily articulated and communicated.

Answer 17

explicit knowledge

Question 18

The ratio of total debt to total assets.

Answer 18

financial leverage

Question 19

An organizational structure in which employees tend to be specialists in the business functions important to
that industry, such as manufacturing, sales, or finance.

Answer 19

functional structure

Question 20

A table that organizes internal factors into strengths and weaknesses and how well management is responding to these specific factors

Answer 20

IFAS (Internal Factor Analysis Summary)
table

Question 21

The rate at which a firm’s underlying resources and capabilities can be duplicated by others.

Answer 21

imitability

Question 22

The particular combination of key variables (product, place, promotion, and price) that can be used to affect demand and to gain competitive advantage.

Answer 22

marketing mix

Question 23

The impact of a specific change in sales volume on net operating income

Answer 23

operating leverage

Question 24

Internal scanning concerned with identifying an organization’s strengths and weaknesses.

Answer 24

organizational analysis

Question 25

The formal setup of a business corporation’s value chain components in terms of work flow, communication channels, and hierarchy

Answer 25

organizational structures

Question 26

A graph showing time plotted against sales of a product as it moves from introduction through growth and maturity to decline

Answer 26

product life cycle

Question 27

A company’s spending on research and development as a percentage of sales revenue

Answer 27

R&D intensity

Question 28

The balance of basic, product, and process research and development

Answer 28

R&D mix

Question 29

The ability of competitors to duplicate resources and imitate another firm’s success

Answer 29

replicability

Question 30

A company’s physical, human, and organizational assets that serve as the building blocks of a corporation

Answer 30

resource

Question 31

A structure for new entrepreneurial firms in which the employees tend to be generalists and jacks-of-all-trades

Answer 31

simple structure

Question 32

A division or group of divisions composed of independent product-market segments that are given primary authority for the management of their own functions.

Answer 32

strategic business unit (SBU)

Question 33

The formation of networks for sourcing raw materials, manufacturing products or creating services, storing and distributing goods, and delivering goods or services to customers and consumers

Answer 33

supply chain management

Question 34

Knowledge that is not easily communicated because it is deeply rooted in employee experience or in a corporation’s culture

Answer 34

tacit knowledge

Question 35

A corporation’s proficiency in managing research personnel and integrating their innovations into its day-to-day operations.

Answer 35

technological competence

Question 36

The displacement of one technology by another.

Answer 36

technological discontinuity

Question 37

The process of taking a new technology from the laboratory to the marketplace

Answer 37

technology transfer

Question 38

The ability of competitors to gather the resources and capabilities necessary to support a competitive challenge

Answer 38

transferability

Question 39

The speed with which other firms can understand the relationship of resources and capabilities supporting a successful firm’s strategy.

Answer 39

transparent

Question 40

A linked set of value-creating activities that begins with basic raw materials coming from suppliers and ends with distributors getting the final goods into the hands of
the ultimate consumer.

Answer 40

value chain

Question 41

A group of geographically and/or organizationally dispersed coworkers that are assembled using a combination of telecommunications and information technologies to accomplish an organizational task.

Answer 41

virtual teams

Question 42

Barney’s proposed analysis to evaluate a firm’s key resources in terms of value, rareness, imitability, and organization.

Answer 42

VRIO framework

Question 43

level of resource sustainability

Answer 43

Slow-Cycle Resource
Standard-Cycle Resource
Fast-Cycle Resources

Question 44

Some of the many
possible business models are:

Answer 44

Customer solutions model
Profit pyramid model
Multi-component system/installed base model
Advertising model
Switchboard model
Time model
Efficiency model
Blockbuster model
Profit multiplier model
Entrepreneurial model
De Facto industry standard model

Question 45

basic organizational structure

Answer 45

Simple structure
functional structure
Divisional structure