Exam 7: The Sources and Dimensions of Competitive Advantage

Isolating mechanisms are:

Business Process Reengineering that starts with a "clean sheet of paper" runs the risk of destroying some valuable organizational capabilities which have taken many years to build

Of the two sources of superior profitability, industry attractiveness and competitive advantage within an industry, the latter is more important.

Which of the following product categories offers the greatest potential for differentiation?

If the prices of securities fully reflect all the information available, then passive investors are best advised to invest in index-based mutual funds (unit trusts) with the lowest administration costs.

Banks spend more money on their head office buildings than most other large corporations because:

Which of the following is not an isolating mechanism?

Competitive advantage can be defined as:

Most of the business models deployed in electronic commerce have no historical precedence

Complementarity between a firm's management practices means that:

What is the difference between differentiation and segmentation?

Physical characteristics of a product are of little importance in determining its potential for differentiation

The main strategy implication of the Boston Consulting Group's analysis of experience curves was that firms should avoid cutting prices in order to expand market share.

Firms pursuing differentiation advantages will implement their strategies differently from those pursuing cost advantage.The implementation of differentiation strategy is likely to feature:

Kim and Mauborgne's "strategy canvas" is a tool for identifying novel recombinations of product attributes.

Designing a differentiation strategy requires understanding every possible interaction between a firm and its customers

Compared with simple products like flour or toilet paper, complex products such as cars or hotels:

A firm's competitive advantage is not necessarily revealed in higher profitability; it may be reflected in:

A basic principle of Business Process Reengineering is that dramatic improvements in cost efficiency are better achieved through incremental improvements rather than fundamental redesign.

Causal ambiguity-difficulties over diagnosing the sources of a rival's compeititve advantage-creates uncertain imitability-uncertainty over the ability to replicate that competitive advantage.