MGMT 466 Exam 1 - FLASHCARDS - Chapter 3
True or false: technological resources are tangible resources?
TRUE
True or false: Firms and organizations achieve strategic competitiveness and earn above-average returns by:
acquiring, bundling, and leveraging their resources for taking advantage of opportunities in the external environment to create value for customers?
TRUE
Do all competitive advantages have a limited life?
Yes
What is a competitive advantage’s sustainability based on?
- The rate of core competence obsolescence because of environmental changes
- The availability of substitutes for the core competence
- The imitability of the core competence
Why in today’s global economy, are some of the resources that were traditionally critical to firms’ efforts to produce, sell, and distribute their goods or services, now less likely to be the source of competitive advantages?
because an increasing number of firms are using their resources to form core competencies through which they successfully implement an international strategy as a means of overcoming the advantages created by more traditional resources
What is a global mindset?
ability to analyze, understand, and manage an internal organization in ways that are not dependent on the assumptions of a single country, culture, or context
What is measured by a product’s performance characteristics and by its attributes for which customers are willing to pay?
Value
What does making decisions regarding the firm’s assets involve?
involves identifying, developing, deploying, and protecting resources, capabilities, and core competencies
True or false: making decisions regarding the firm’s assets is challenging and difficult?
TRUE
True or false: making decisions regarding the firm’s assets is increasingly internationalized?
TRUE
True or false: A firm can improve by studying its mistakes?
TRUE
Where does uncertainty exist?
Uncertainty exists about the characteristics of the firm’s general and industry environments and customers’ needs
Where does complexity result from?
Complexity results from the interrelationships among conditions shaping a firm.
How do firms create value?
Firms create value by innovatively building and leveraging their resources to form capabilities and core competencies
What is the source of above average returns for a firm?
Creating value for customers is the source of above- average returns for a firm
True or false: The strategic decisions managers make about the internal organization are nonroutine?
TRUE
True or false: The strategic decisions managers make about the internal organization has ethical implications?
TRUE
True or false: The strategic decisions managers make about the internal organization significantly influence the firm’s ability to earn above-average returns?
TRUE
What is the capability of making successful decisions when no obviously correct model or rule is available or when relevant data are unreliable or incomplete?
Judgement
When exercising judgement, decision makers must be aware of possible cognitive biases, such as overconfidence?
Yes
When exercising judgement, decision makers often take intelligent risks?
Yes
What is the foundation of a competitive advantage?
−Resources
−Capabilities
−Core competencies
True or false: resources are broad in scope?
TRUE
By themselves, do resources allow firms to create value?
No
What are resouces of Amazon?
Internet, access to wide product inventory
What are assets that can be observed and quantified?
Tangible resources
What are examples of tangible resources?
Financial resources, organizational resources, physical resources, and technological resources
What type of resources are a firm’s capacity to borrow?
Financial resources
What type of resources are a firm’s ability to generate funds through internal operations?
Financial resources
What type of resources are formal reporting structures?
Organizational resources
What type of resources are the sophistication of a firm’s plant and equipment and the attractiveness of its location?
Physical resources
What type of resources are distribution facilities?
Physical resources
What type of resources are product inventory?
Physical resources
What type of resources is the availability of technology-related resources such as copyrights, patents, trademarks, and trade secrets?
Technological resources
What are assets that are rooted deeply in the firm’s history, accumulate over time, and are relatively difficult for competitors to analyze and imitate?
Intangible resources
What are examples of intangible resources?
Human resources, innovation resources, and reputational resources
What are human resources?
Knowledge
Trust
Skills
Abilities to collaborate with others
What type of resources are ideas, scientific capabilities, and capacity to innovate?
Innovation resources
What type of resources are brand name?
Reputational resources
What type of resources are perceptions of product quality, durability, and reliability?
Reputational resources
What type of resources are a positive reputation with stakeholders such as suppliers and customers?
Reputational resources
When did IKEA transform to digital?
2018
What are created by combining individual tangible and intangible resources?
Capabilities
What are used to complete the organizational tasks ?
Capabilities
What is the foundation for building core competencies and hopefully competitive advantages?
Capabilities
What are capabilities based on?
Often based on developing, carrying, and exchanging information and knowledge through the firm’s human capital
A firm with what functional area has the capability of: effective use of logistics management techniques?
Distribution
What capability does a firm with a functional area of human resources have?
Motivating, empowering, and retaining employees
What capability does a firm with a functional area of management information systems have?
Effective and efficient control of inventories through point-of-purchase data collection methods
What capability does a firm with a functional area of marketing have?
• Effective promotion of brand-name products
• Effective customer service
• Innovative merchandising
What is an example of a firm with a functional area of distribution?
Walmart
What is an example of a firm with a functional area of human resources?
Microsoft
A firm with what functional area has the capability of: Ability to envision the future of clothing?
Management
What capability does a firm with a functional area of manufacturing have?
• Design and production skills yielding reliable
products
• Product and design quality
• Miniaturization of components and products
What capability does a firm with a functional area of research and development have?
• Innovative technology
• Development of sophisticated elevator control
solutions
• Rapid transformation of technology into new
products and processes
• Digital technology
What is an example of a firm with a functional area of management?
• Hugo Boss
• Zara
What functional area does the company Sony have?
Manufacturing
What capabilities does the company Sony have?
• Design and production skills yielding reliable
products
• Product and design quality
• Miniaturization of components and products
What are capabilities that serve as a source of competitive advantage for a firm over its rivals?
Core competencies
True or false: core competencies emerge over time through an organizational process of accumulating and learning how to deploy different resources and capabilities?
TRUE
What are the activities the company performs especially well compared to competitors?
Core competencies
What are the activities through which the firm adds unique value to the goods or services it sells to customers?
Core competencies
How is Intel an example of a core competency?
Ability to design and manufacture ever more powerful microprocessors for PCs
How is Netflix an example of a core competency?
Creates proprietary algorithms-based on individual customer preferences
How is Tesla an example of a core competency?
Engineering expertise in designing battery powered motors and power trains
What are two tools to help firms identify their core competencies?
The four criteria of sustainable competitive advantage VRIN analysis
Value chain analysis
What are the four criteria of a sustainable competitive advantage (VRIN)?
Valuable capabilities
Rare capabilities
Costly to imitate
Nonsubstitutable capabilities
How do valuable capabilities help a firm have a competitive advantage?
Help a firm neutralize threats or exploit opportunities
How do rare capabilities help a firm have a competitive advantage?
They are not possessed by many other firms
How do capabilities that are costly to imitate help a firm have a competitive advantage?
They prevent competitors from easily copying the firm’s unique strengths, allowing the firm to maintain a distinct market position and potentially charge premium prices or capture a larger market share due to its superior offerings, which are difficult for rivals to replicate
How do nonsubstitutable capabilities help a firm have a competitive advantage?
There is no strategic equivalent
What if a firm’s capability is not valuable, rare, costly to imitate, or nonsubstitutable? What happens to their competitive advantage and returns?
There is a competitive disadvantage and below average returns
What if a firm’s capability is valuable, and is nonsubstitutable, but their capability is not rare or costly to imitate? What happens to their competitive advantage and returns?
There is a competitive parity and average returns
What if a firm’s capability is valuable and rare, but is not costly to imitate? What happens to their competitive advantage and returns?
There is a temporary competitive advantage and average to above average returns
What if a firm’s capability is valuable, rare, costly to imitate, and nonsubstitutable? What happens to their competitive advantage and returns?
There is a competitive advantage and above average returns
True or false: Every core competence is a capability, not every capability is a core competence?
TRUE
True or false: For a capability to be a core competence, it must be valuable and unique from a customer’s point of view?
TRUE
True or false: For a core competence to be a potential source of competitive advantage, it must be inimitable and nonsubstitutable by competitors?
TRUE
What allows the firm to understand the parts of its operations that create value and those that do not?
Value chain analysis
What are activities or tasks the firm completes in order to produce products and then sell, distribute, and service those products in ways that create value for customers?
Value chain activities
What are activities or tasks the firm completes in order to support the work being done to produce, sell, distribute, and service the products the firm is producing?
Support functions
What are the different support functions in a value chain analysis?
Finance
Human resource management
Information technology management
Research and development
What are the different value chain activities in a value chain analyis?
Supply chain management
Operations
Distribution
Marketing (including sales)
Follow up service
What are activities including sourcing, procurement, conversion, and logistics management that are neccesary for the firm to recieve raw materials and convert them into final products?
Supply chain management
What are activities taken to increase a product’s value for customers?
Follow up service
What are examples of follow up service?
Surveys to recieve feedback about the customer’s satisfaction, offering technical support after the sale, and fully complying with a product’s warranty
What are activities related to getting the final product to the customer?
Distribution
What are examples of distribution?
Efficiently handling customer’s orders, choosing the optimal delivery channel, and working with the finance support function to arrange for customer’s payments for delivered goods
What are activities taken for the purpose of segmenting target custoemers on the basis of unique needs, satisfying customer needs, retaining customers, and locating additional customers?
Marketing
What are advertising campaigns, developing and managing product brands, determining appropriate pricing strategies, and training the sales force examples of?
Marketing
What are activities neccesary to efficiently change raw materials into finished products, such as developing employee work schedules, designing production processes and physical layout of operational facilities, determining production capacity needs, and selecting and maintaining production equipment?
Operations
What are activities associated with managing a firm’s human capital such as selecting, training, retaining, and compensating human resources in ways that create a capability and hopefully a core competency?
Human resource management
What are ativities associated with discovering or creating new technologies, products, or services, that can be combined where thay are difficult for competitors to imitate, leading to a core competency?
Research and development
What are activities associated with effectively acquiring and managing financial resources?
Finance
What are activities taken to obtain and manage information and knowledge throughout a firm, such as identifying and utilizing technologies, determining the best ways to gain and distribute knowledge, and linking relevant information and knowledge to organizational functions?
Information technology management
In order to become a core competence and a source of competitive advantage, a capability must allow the firm to either what?
Perform an activity in a manner that provides value superior to that provided by competitors, or
Perform a value-creating activity that competitors cannot perform
What can value chain analysis help managers do?
Value chain analysis can help managers determine which activities hold the most potential for the firm to develop a competence
What is a value creation system?
Each part of a system depends on other parts of the system to create value
True or false: Creating value for customers by completing activities that are part of the value chain requires building strong and productive relationships with stakeholders (social capital)?
TRUE
What is the purchase of a value-creating activity or a support function activity from an external supplier?
Outsourcing
When might outsourcing be neccesary?
When the firm cannot create value in either a value chain activity or a support function
What is offshoring?
Increases the probability of developing core competencies
What are potential concerns of outsourcing?
Potential loss in a firm’s ability to innovate
Loss of jobs within the focal firm
Is having a significant quantity of resources is the same as having the “right” resources potential to be formed into core competencies?
No
True or false: All core competencies have the potential to become core rigidities that generate inertia and stifle innovation?
TRUE
