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

At IBM, human capital is critical to forming and using the firm's capabilities in customer relationships, scientific and research skills, and technical skills in hardware, software, and services.

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

Resources must be combined to form capabilities, as illustrated by Chipotle, which linked fresh ingredients with several other resources, including the marketing and training of employees, as the foundation for customer service as a capability.

When firms lay off employees, they are:

The learning generated by making and correcting mistakes is generally unimportant to efforts to create new capabilities and core competencies.

Because firms combine tangible and intangible resources to create capabilities:

A firm's core competencies, integrated with an understanding of the results of studying the conditions in the external environment, should:

Several months ago, a restaurant developed a new appetizer that is a hit with customers. Many customers go to the restaurant just for the appetizer, and it was at the center of a recent highly positive review by a food critic. Preparation involves common ingredients and average culinary skills but requires a very high oven temperature, which significantly increases utility costs. Several competing restaurants have since added their own version of the appetizer to their menu. Which criterion for assessing capabilities/core competencies is met?

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:

Any core competency has the potential to lose its value-creating ability.

Core competencies are capabilities that serve as a source of competitive advantage for a firm over its rivals.

Why is it important to prevent core competencies from becoming core rigidities?

______ is measured by a product's performance characteristics and its attributes for which customers are willing to pay.

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

Value consists of:

Valuable capabilities allow the firm to exploit strengths or neutralize weaknesses in the internal environment.

Describe the importance of internal analysis to the strategic success of the firm.  Should not-for-profit organizations perform internal analysis?  Why or Why not?

Which of the following is NOT an external event that reveals the "dark side" of core capabilities?

The challenge and difficulty of making effective decisions are implied by preliminary evidence that ______ of organizational decisions fail.

Firms that achieve competitive parity can expect to: