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

Costly-to-imitate capabilities are those which other firms cannot easily develop as they have no strategic equivalent.

Which of the following is NOT a factor affecting sustainability of a competitive advantage?

Which of the following is a true statement about capabilities?

In the television show Mad Men,Don Draper is in charge of the creative department at an advertising agency. He appears to spend most of his time drinking and relaxing,but occasionally he has a flash of insight that leads to a New ad campaign. He provides which valuable intangible resource?

Case Scenario 2: ERP Inc. ERP Inc. is a leading provider of enterprise integration software (EIS). EIS allows a firm to connect and integrate processes across all aspects of its business, regardless of where they are located around the world. ERPI is a product-focused company, whereas most competitors in its market space, such as Oracle, operate as "solutions companies." Oracle and Microsoft have begun to devote considerable resources to the development of and acquisition of products to compete in the EIS space. Despite these recent threats, one benefit of its product-focused strategy is that ERPI's proprietary product is generally recognized as being 200 percent to 300 percent better than competitors' software. ERPI estimates it will take two to three years for competitors to develop the capabilities needed to bring a competing product to market. ERPI invests a considerable percentage of its profits in basic R&D to support its core products. As evidence of this, among its competitors the firm maintains the largest in-house programming staff dedicated solely to the development of advanced enterprise integration software. Installation and related consulting for EIS typically cost between $100 million and $200 million, with the ERPI software component accounting for about 20 percent of the installed cost (the remaining 80 percent is spent on the actual installation, not counting the value of the customer's time). ERPI's target market consists of the world's largest manufacturing and industrial firms, and it currently enjoys a 60 percent market share. -(Refer to Case Scenario 2). Which of the following represents the maximum level of performance ERPI should expect to achieve?

Supply and demand impacts the level at which people are paid. If there are few people with a proven record of using judgment effectively then they will be in high demand and offered high compensation. CEOs are valued for their judgment as

Which of the following is NOT a component of internal analysis leading to competitive advantage?

The foundation of many capabilities lies in the unique skills and knowledge of a firm's employees.

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). Mangler's physical locations are best an example of