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

The need to meet quarterly earnings numbers disciplines managers to accurately examine the firm's internal organization.

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

A major reason outsourcing is being used is that

The sustainability of a competitive advantage depends upon the imitability of the core competence, the availability of substitutes for the core competence, and the rate of obsolescence of the core competence.

Organizational culture is

Resources are bundled to create capabilities which in turn are the source of core competencies which are then the basis of competitive advantages.

Judgment is the capability of making successful decisions when no obviously correct model or rule is available or when relevant data are unreliable or incomplete.

Firms should seek to continually develop new core competencies because all core competencies have limited life spans.

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

In the global economy, traditional factors such as labor costs, access to financial resources and raw materials, and protected or regulated markets are no longer sources of competitive advantage.

The most numerous of the following organizational characteristics are

Of Southwest Airline's competitors, Ryanair has been the most successful at imitating Southwest's low-cost strategy.

The proper matching of what a firm can do with what it might do allows the firm to

Creating customer value is the source of the firm's potential to earn above-average returns.

Value-creating primary activities include

____ can be viewed as the capacity to take action.

Internal analysis enables a firm to determine what the firm

The owner of a store retailing fine quality fabrics for home-sewers bewails the fact that few young women know how to do fine tailoring, much less simple dressmaking. Many potential customers are unable to appreciate the premium quality of the fabrics available and are deterred by the high prices, as well as the complexity of fine sewing. In the past, the store had a strong demand for fabrics, large classes for women learning the fine points of sewing, and a reputation for excellent service and technical advice. Now the store is earning lower-than-average returns. This case is an example of

Interpersonal relationships, trust, friendships, and a firm's reputation are all examples of complex social phenomena that make capabilities costly to imitate.

Define capabilities and how they affect the firm's strategic success.