Looking Inside For Competitive Advantage

Question 1

Financial

Answer 1

Debt, equity, retained earnings

Question 2

Physical

Answer 2

Machines, facilities, buildings

Question 3

Human

Answer 3

Experience and knowledge, risk taking propensity

Question 4

Organizational assets

Answer 4

History, relationships, management control, HR policies

Question 5

Sustainable competitive advantage is developed when resources

Answer 5

1. Add value to the firm
2. Are rare
3. Are hard to imitate
4. Interact with organizational structure

Question 6

Even though a firm’s resources have added value in the past

Answer 6

Changed in consumer taste, industry structure, or technology can make it less valuable in the future

Question 7

Imitation

Answer 7

Builds the same kind of resources as the competitor

Question 8

Substitution

Answer 8

Substitute some resources for other resources.

Question 9

Reasons why it’s hard to imitate?

Answer 9

1. Importance of history- experience or government contracts example
2. Importance of numerous small decisions
3. Socially complex resources- teamwork, work culture