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

The more core competencies a firm has, the more likely it is to generate a sustained competitive advantage.

Describe the importance of internal analysis to the strategic success of the firm.

Core competencies are the activities a company performs especially well compared with competitors and through which the firm adds unique value to its goods and services.

Describe a value chain analysis. How does a value chain analysis help a firm gain competitive advantage?

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

Regardless of the industry, the most valuable links on a firm's value chain will likely be

Analyzing the internal environment enables a firm to determine what it can do by identifying what opportunities exist.

Acme Auto Repair has a thriving business based on its reputation for high-quality work, honesty, and skilled employees. For continued long-term success, Acme's owner should

A company can earn above-average returns only when the value it creates is less than the costs incurred to create that value.

Capabilities are often developed in specific functional areas such as manufacturing, R&D, and marketing.

Which of the following is a true statement about capabilities?

A person who has made a successful decision when no obviously correct model or rule is available or when relevant data are unreliable or incomplete has exercised

Some resources, such as financial capital, have inherent value to the firm, while others are not inherently valuable.

One benefit of outsourcing is that it allows a firm to focus on those few value chain activities where it can produce the greatest value.

GE was effective in developing its human capital, but failed in transferring that knowledge throughout the organization.

Value chain analysis is a tool used to

Value consists of

Which of the following is NOT required for a firm to achieve strategic competitiveness and earn above-average returns from its core competencies?

Capabilities may be costly to imitate if they are causally ambiguous or socially complex.

Gamma, Inc., has struggled for industry dominance with Ardent, Inc., its main competitor, for years. Gamma has gathered and analyzed large amounts of competitive intelligence about Ardent. It has observed as much of the firm's internal functioning and technology as it can legally, yet Gamma cannot understand why Ardent has a competitive advantage over it. The source of Ardent's success is