Exam 2: Competitive Advantage

Causal ambiguity is gained when competitors are able to determine how or why another firm is enjoying a competitive advantage.

Patents protect the ownership interests of firms that develop new products, services, and technologies by slowing the diffusion of innovations.

Early studies of the impact of firm-specific factors and capabilities on firm performance showed that firms in the same industry pursuing the same strategies had similar levels of performance.

If resources and capabilities are both valuable and rare, and also difficult for rivals to imitate, then those resources can be

Strategy content describes how a firm does what it does.

__________________ include reputation, culture, trust, and friendships among managers in an organization, teamwork among managers and workers, the knowledge of employees, and the learning embedded in organizational processes, routines, and standard operating procedures.

A capability that is not difficult to imitate cannot provide an __________ competitive advantage.

Firms that earn above-average economic profits over the long run are said to enjoy economic rents.

Strategies do not affect firm performance directly, but affect performance through the development of firm-specific resources and capabilities that can lead to both competitive advantage and high performance.

"Structural" explanations for firm performance predict that firms in the same industry pursuing similar strategies in the same industry will have ____________ performance outcomes.

Sustainable competitive advantage is the set of factors or capabilities that allows firms to consistently outperform their rivals.

___________ is the reason why venture capital tends to flow to start-up firms that have executives with proven track records.