Topic 3: Internal Environment

Question 1

What is a resource?

Answer 1

A competitive asset that is owned or controlled by a firm

Question 2

What is capability?

Answer 2

The capacity of a firm to competently perform some internal activity

Question 3

What is the VRIO Framework?

Answer 3

A model that provides a mechanism for testing the competitive resources of a business

Question 4

What does the V,R,I and O in VRIO framework stand for?

Answer 4

Value –> defined by market demand

Rarity –> be scarce with some degree of surplus demand

Imitability –> costly and/or not able to be easily imitated/replicated, competitors face a cost disadvantage in imitating resource

Organizational capability –> the ability to use the resources within the organization and support the strategic positioning

Question 5

What is SWOT Analysis?

Answer 5

An analysis tool that identifies the strengths, weakness, opportunities and threats of the business

Question 6

What is the Boston Consulting Group (BCG) Matrix?

Answer 6

A planning tool that uses graphical representations of a company’s products and services to help the company decide what it should keep, sell, or invest more in?

Question 7

What are the quadrants of the BCG Matrix? What do they mean?

Answer 7

○ Star –> products that are high in growth and generate high income
○ Puzzles/Question marks –> products that are high in growth and generate low income
○ Cash cow –> products that are low in growth and generate high income
Dogs –> products that are low in growth and generate low income