Class 4 (Integration/Responsiveness)

Question 1

what are the 3 stages in Vernon’s Product Life Cycle Theory?

Answer 1

1. new product stage
2. maturing product stage
3. standardized product stage

Question 2

what are the 4 parts in Porter’s Theory of National Competitive Advantage?

Answer 2

• factor conditions
• demand conditions
• related and supporting industries
• firm strategy, structure, and rivalry

Question 3

describe Porter’s competitive advantage of nations (10 yrs after competitive strategy)

Answer 3

• Competitively successful industry sectors arise from the interaction of four country and firm specific elements
– Factor conditions (similar to factor endowment but emphasis on upgrading factors- education, infrastructure)
– Demand conditions (emphasis on sophisticated demanding customers)
– Related and supporting industries (cluster / agglomeration of rivals,
suppliers, supporting industries as in Silicon Valley- proximity aids flow of ideas & innovation)
– Firm strategy, structure, and rivalry (vigorous domestic rivalry helps firms become competitive)
plus
– Chance
– Government

Question 4

what is another name for Competitive Advantage of Nations

Answer 4

national diamond

Question 5

Firms achieve strategic competitiveness and earn above average returns when their core competencies are effectively:

Answer 5

–Acquired
– Bundled
– Leveraged

Question 6

To achieve strategic competitiveness and earn above-average returns, firms must:

Answer 6

leverage their core competencies to

exploit opportunities in the external environment

Question 7

how do you create competitive advantage

Answer 7

Core competencies, in combination with product-market positions,
are the firm’s most important sources of competitive advantage

Question 8

By exploiting their Core Competencies or Competitive Advantages, firms create value:

Answer 8

– Value is measured by:
• product performance characteristics
• product attributes for which customers will pay
– Firms create value by innovatively bundling and leveraging their
resources and capabilities
– Superior value leads to above-average returns

Question 9

sustainability of a competitive advantage is a function of the:

Answer 9

– rate of core competence obsolescence because of
environmental changes
– availability of substitutes for the core competence
– imitability of the core competence

Question 10

what are the 4 criteria for sustainable advantage?

Answer 10

1. value capabilities
2. rare capabilities
3. costly-to-imitate capabilities
4. nonsubstitutable capabilities

Question 11

describe value capabilities

Answer 11

help a firm neutralize threats or exploit opportunities

Question 12

describe rare capabilities

Answer 12

are not possessed by many others

Question 13

describe costly-to-imitate capabilities

Answer 13

• historical: a unique and a valuable organizational culture or brand name
• ambiguous cause: the causes and uses of a competence are unclear
• social complexity: interpersonal relationships, trust, and friendship among managers, suppliers, and customers