Exam 3: The Internal Organization: Resources, Capabilities, Core Competencies, and Competitive Advantages

Firms should never outsource a primary activity because of the danger of the activity being imitated by rivals.

An investor is considering buying a restaurant that has been in operation for a number of years. The restaurant has a highly regarded chef,and many long-term kitchen and wait staff who work together smoothly. It has a reputation for dishes of consistently high quality and an appealing dining atmosphere. What should the investor consider when making a decision?

A major U.S. manufacturer of children's toys believes its main competitive advantage lies in its continuing development of innovative toys and games. The company is facing increasing competition on price,and it is strongly considering outsourcing to offshore firms as a means of reducing costs. The LAST function this firm should Consider outsourcing is

Why is it important to prevent core competencies from becoming core rigidities?

Compared to tangible resources,intangible resources are and

Innovation,consumer understanding,brand-building,go-to-market,and scale are activities that P&G performs well and are examples of the company's

Walmart uses core competencies such as information technology and distribution channels to create value for its customers through its "everyday low prices."

Apple has combined some of its tangible resources (such as financial resources and research laboratories)and intangible resources (such as scientists,engineers,and organizational routines)to create a capability in R&D which creates a core competence in innovation.

Case Scenario 3: B.B. Mangler. B.B. Mangler is a top U.S. business-to-business distributor of maintenance, repair, and service equipment, components, and supplies such as compressors, motors, signs, lighting and welding equipment, and hand and power tools. Customers include contractors, service and maintenance shops, manufacturers, hotels, government, and health care and educational facilities. Mangler's industry is typically referred to as MRO, an acronym for maintenance, repair, and supplies. Mangler states its strategy as having the "capacity to quickly offer an unmatched breadth of lowest total cost MRO solutions to business." Mangler's GoMRO sourcing center for indirect spot buys locates products through its unique database of 8,000 suppliers and 5 million products. Mangler also dominates the North American market in terms of its sheer local physical presence. It has 388 physical branches in the U.S. largest cities, including Puerto Rico (90 percent of sales), 184 in Canada, and 5 in Mexico. This physical presence also has garnered Mangler a reputation for excellent, dependable service in its target markets, which in turn translates into a vast and loyal clientele. -(Refer to Case Scenario 3). The Internet threatens to displace physical locations as a basis for competitive advantage. If Mangler's vast network of branch offices were an integral part of its core competencies,what might the branches become if the basis for competitive advantage in the MRO industry moves to the Internet?

ACME Corp. is a leading provider of radios to the commercial market. Its products all rely on printed circuit-board technology. ACME has protected its market leadership with continued advancements in this technology,which it patents. A competitor has developed a radio for this market with equal performance but uses a software-based technology instead of circuit boards. ACME's technology leadership fails which capability test?

One reason executive judgment can be a particularly important source of competitive advantage is that judgment

Costly-to-imitate capabilities can emerge for all of the following reasons EXCEPT

A major reason outsourcing is effective is that

A major department store chain has a strict policy of banning photographs or videos of its sales floor or back-room operations. It also does not allow academics to conduct studies of it for publication in research journals. In fact,some of its own top managers refer to the management's policies on secrecy as "verging on paranoid." These policies indicate that the top management of the firm believes the organization's core competencies are

Value chain activities include all of the following EXCEPT

Value is measured by the variable and fixed costs associated with the production and marketing of a particular product compared with the revenue and profits the product generates.

______ is the 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.

To provide a sustainable competitive advantage,a capability must satisfy all of the following criteria EXCEPT

Because firms combine tangible and intangible resources to create capabilities,

A firm's core competencies,integrated with an understanding of the results of studying the conditions in the external environment,should