Exam 5: Analyzing Resources and Capabilities

A major reason why many companies have the high valuation ratios (ratio of stock market value to balance sheet net asset value)is:

Strategy needs to take account of both the requirements of the firm's external environment and the firm's own resources and capabilities.Resources and capabilities rather than requirements of the external environment offer a more stable basis for strategy formulation when:

The difference between a resource and a capability is:

In 1990,C.K.Prahalad and Gary Hamel introduced the concept of "core competence." Their argument was that:

Honda Motor Company,Microsoft,and 3M Corporation are examples of companies whose corporate strategies have been focused on satisfying a clearly defined customer need.

To exploit its tangible assets more effectively requires that a firm:

The more stable is a firm's external environment,the more likely it is that the firm's resources and capabilities,rather than customer needs,will offer a more stable foundation for strategy.

Companies with the highest ratios of market value to book value tend to be those,either with valuable brands or valuable proprietary technologies.

A strong brand is unlikely to be a source of sustainable competitive advantage since brands lack durability and can be purchased or created through advertising and promotion.

Strategy is concerned with matching a firm's resources and capabilities to the opportunities emerging from its environment.

When a company has weaknesses relative to competitors among strategically important resources and capabilities,the appropriate strategic response is to:

The main problem in using a company's balance sheet to identify its resources and capabilities is that:

Resources lack transferability between firms when:

If an organization possesses strengths in a resource or capability that bears little relationship to the industry's key success factors it should:

Benchmarking is seldom an effective means of assessing the strength of a firm's resources and capabilities relative to those of competitors.

Enterprise Resource Planning software (such as that supplied by SAP)is unlikely,on its own,to be source of competitive advantage because:

For the purposes of strategy formulation,a firm needs to consider only those resources and capabilities that are strategically unimportant.Any strengths in what appear to be strategically unimportant resources and capabilities ("superfluous strengths")are best ignored.

The "resource-based view" emphasizes that a firm's strategy needs to be environmentally sustainable.

Organizational capabilities are built upon an organization's processes and routines.

The firm's ability to appropriate the rents generated by its organizational capabilities: