Deck 3: Leveraging Resources and Capabilities

Question 1

The performance of a firm is not altered negatively or positively by non-value-adding assets.

Answer 1

False

Question 2

In order for the VRIO framework to provide effective information, the various capabilities of a company such as LeapFrog Enterprises needs to be evaluated in isolation from other resources and capabilities.

Answer 2

False

Question 3

In SWOT analysis, the industry view focuses on SW: strengths and weaknesses.

Answer 3

False

Question 4

For any given activity, one of the four choices for managers in terms of modes and locations includes onshoring.

Question 5

Brick-and-mortar assets are considered tangible, whereas financial assets are considered intangible.

Question 6

Intangible assets include the technological resources a company has that no other company can claim.

Question 7

The resource-based view sees capabilities as a firm's tangible and intangible assets that it uses to choose and implement its strategies.

Question 8

A fundamental question in a value chain analysis is whether a firm's resources and capabilities add value.

Question 9

A SWOT analysis of the value chain engages managers in ascertaining a firm's strengths and weaknesses on an activity-by-activity basis.

Question 10

It is easier to imitate intangible resources/capabilities than tangible ones.

Question 11

Intangible resources and capabilities are assets that are more easily quantified.

Question 12

Outsourcing is possible for both manufacturing and servicing activities.

Question 13

A value chain for Nike would include shoe manufacturing as a primary activity and Nike branded stores as a support activity.

Question 14

Tightly bundled resources/capabilities may be a disadvantage in high velocity environments.

Question 15

Conducting a value chain analysis helps a firm see how it is good at all its primary and support activities.

Question 16

In SWOT analysis, the resource view focuses on OT: opportunities and threats.

Question 17

IBM is an example of how capabilities may cease to add value and instead become core rigidities.

Question 18

In markets where a high quality in a product is expected, providing that level of quality provides little advantage, and at best could be considered competitive parity.

Question 19

Offshoring and outsourcing interchangeable concepts.

Question 20

Most goods and services are produced through a chain of vertical activities which add value.

Question 21

Critics suggest that the resource-based view should eliminate dynamic capabilities.

Question 22

Companies in developing countries are the most frequent users of offshoring opportunities.

Question 23

A resource-based view is good at explaining what happened in the past, but has difficulty predicting what will happen in the future.

Question 24

Causal ambiguity is the hallmark of many industries with ambiguous industry structure and blurred boundaries.

Question 25

The logic of the resource-based view is relatively static.

Question 26

Many multinationals consist of many people scattered in many different countries. As a result, their invisible relationships do not add value.

Question 27

The proposition that firm performance is most fundamentally determined by firm-specific resources and capabilities is at the heart of the industry-based view.

Question 28

Strategy execution in a high-velocity industry would be characterized as linear rather than iterative in nature.

Question 29

Valuable, rare, but imitable resources/capabilities may provide temporary competitive advantage.

Question 30

TheChapter indicates that Burberry is an example of causal ambiguity.

Question 31

A sustained competitive advantage can last because not all advantages eventually erode.

Question 32

One of the most valuable and organizationally complex resources that is difficult for other firms to imitate is tacit knowledge within a given firm.

Question 33

One of the most important implications for strategic action is that relentless imitation and benchmarking are important but not likely to be a sustainable successful strategy.

Question 34

Resource-based studies of firm performance need to describe the measurement of firm-specific factors such as organizational learning, knowledge management, and managerial talent.

Question 35

When making strategic plans, a manager needs to integrate resources and capabilities that are valuable, rare, and difficult to imitate with those that do not have these attributes.​

Question 36

Causal ambiguity refers to the difficulty of identifying the outcomes of causal determinants.

Question 37

How a firm performs different value-adding activities relative to rivals determines the scope of a firm.

Question 38

Resource-based theorists readily admit that "the source of sustainable competitive advantage is likely to be found in different places at different points in time in different industries."

Question 39

A common mistake made when evaluating a firm's capabilities is failing to assess them relative to the capabilities of the firm's rivals.
​

Question 40

Imitation is not likely to be a successful strategy over the long term.

Question 41

A firm's__________ are its tangible and intangible assets a firm uses to choose and implement its strategies.

A)Resources
B)Dynamic capabilities
C) Core competencies
D) Net worth

Question 42

Traditional resource-based view:

A)Overemphasizes leveraging existing resources/capabilities.
B)Overemphasizes developing new resources/capabilities.
C) Does not include an assessment of a firm's capabilities.
D) Is primarily focused on a firm's tangible resources and capabilities.

Question 43

In the VRIO framework, the questions of value and rarity are:

A)​Determinants of the level of competitive advantage.
B)​Mostly unrelated issues.
C) ​Less important than whether a firm's activity can be imitated.
D) ​Essentially the same question.

Question 44

A small U.S. company located in the West has outsourced its payroll activities to a company in a Midwestern state. This action is known as:

A)​Offshoring.
B)​Onshoring.
C) ​Reshoring.
D) ​Reshoring.

Question 45

Which view of strategy focuses on how individual firms differ from each other in one industry?

A)​Industry-based view.
B)​Resource-based view.
C) ​Organizational-based view.
D) ​Institution-based view.

Question 46

According to the text, which of the following are intangible resources and capabilities?

A)Trade secrets.
B)Organizational.
C) Formal structures.
D) All of the above.
E) None of the above.

Question 47

One of the ways in which a firm makes it more difficult for other firms to imitate its resources and capabilities is through:

A)Direct duplication.
B)Non-value-adding activities.
C) Causal ambiguity.
D) None of the above

Question 48

The VRIO framework is based on a(n):

A)​Captive-sourcing view.
B)​Industry-based view.
C) ​Resource-based view.
D) ​Institutional-based view.

Question 49

International outsourcing involves:

A)Offshoring.
B)Onshoring.
C) Reshoring.
D) Captive sourcing.

Question 50

In conducting a value chain analysis, a manager at a small manufacturing firm looks at a particular department within the company and sees that its activities are proprietary to the company's yet common across the industry. In this case, the manager would:

A)​Definitely work toward outsourcing this activity.
B)​Definitely work toward keeping this activity in-house.
C) ​Want to consider outsourcing this activity, sell the unit involved, or lease the unit's services to other firms.
D) ​Try to make the activity less proprietary.

Question 51

Having valuable, but common resources/capabilities leads to:

A)Competitive parity.
B)Competitive advantage.
C) Lack of competition.
D) Competitive disadvantage.

Question 52

The terms outsourcing and offshoring are:

A)​Identical in meaning.
B)​Two completely separate concepts.
C) ​Closely related but not identical in meaning.
D) ​Descriptive of activities to be avoided.

Question 53

Which of the following is considered a benefit of outsourcing activities?

A)​Leverages activities of multiple clients for greater economies of scale.
B)​Shares activities with relatively generic attributes across industries.
C) ​Allows a firm to focus on its core activities.
D) ​All of the above.

Question 54

Which of the following statements about resources is true?

A)​The dynamics capabilities view makes no distinction between resources and capabilities.
B)​Scholars agree that the terms resources and capabilities are interchangeable.
C) ​A firm uses its tangible assets to choose and implement its strategies.
D) ​Intangible resources include a firm's technological capabilities.

Question 55

A firm with valuable, rare, and hard-to-imitate resources and capabilities will:

A)​Always have a sustained competitive advantage.
B)​Have difficulty sustaining a competitive advantage if it is not well organized.
C) ​Outsource all activities except for core activities.
D) ​Be highly susceptible to commoditization.

Question 56

When a company's product is easily imitate:

A)​Valuable and rare resources are not really a source of competitive advantage.
B)​The company needs more tangible resources.
C) ​The company benefits from causal ambiguity.
D) ​None of the above.

Question 57

In the opening case, which of the following attributes describe IBM is part of the strategy Burberry uses?

A)Outsourcing.
B)Imitation of luxury market competitors.
C) Focus on high value and rarity.
D) Proliferation of unrelated products.

Question 58

The relationship between valuable resources and capabilities and firm performance is:

A)​Only a factor for large manufacturing organizations.
B)​Most often a competitive disadvantage.
C) ​The primary factor is deciding whether to exit an industry.
D) ​Basis for determining whether activities are value-adding or non-value-adding.

Question 59

To choose and implement its strategies, Whole Foods uses:

A)​Tangible and intangible assets.
B)​Capabilities.
C) ​Human resources and reputation.
D) ​All of the above.

Question 60

Managers who are involved in value chain analysis:

A)​Benchmark the firm's overall capabilities.
B)​Assess their firm's resources and capabilities at a micro, activity-based level
C) ​Look for ways to commoditize a firm's product lines.
D) ​None of the above.

Question 61

In assessing and choosing a firm's strategy, a manager will usually find that benchmarking is:

A)​Likely to be the most successful strategy.
B)​Can be a valuable part of evaluating a firm's capabilities.
C) ​Unimportant to any well-thought-out strategy.
D) ​The surest way to dilute strengths and magnify weaknesses.

Question 62

Methods that measure organizational learning, knowledge management, and managerial talents:

A)​Look at unobservable firm-specific characteristics.
B)​Result in observable consequences of unobservable resources.
C) ​Are subject to methodological criticisms.
D) ​All of the above.

Question 63

Which of the following is an excellent example of a firm's tacit knowledge?

A)​The static nature of the firm's resources.
B)​Familiarity with the preferences of the firm's customers.
C) ​Hard-to-imitate aspect of the firm's premier product.
D) ​The firm's reputation within the industry.

Question 64

Firm A designs an innovative product. Firm B manufacturers the product based on the designs provided by Firm A. Firm C markets the product in global markets. In this case, Firm B is considered to be the:

A)​Original equipment manufacturer (OEM).
B)​Original design manufacturer (ODM).
C) ​Original brand manufacturer (OBM).
D) ​None of the above.

Question 65

Recent aspects of outsourcing include all of the following EXCEPT:

A)"Business process outsourcing" (BPO).
B)High-end services to countries such as India.
C) Digitization and commoditization of service work.
D) Definite long-term benefits.

Question 66

Which of the following is a leading debate about the resource-based view of strategy?

A)​The identification of a clearly defined industry.
B)​The necessity of choosing a cost leadership or differentiation strategy.
C) ​The benefits of strategic groups within an industry.
D) ​The need to move toward dynamic, rather than static, capabilities.

Question 67

Which of the following is better performed in-house rather than being outsourced?

A)An activity with a high degree of industry commonality.
B)An activity with a high degree of commoditization.
C) An industry-specific and firm-specific (proprietary) activity.
D) All of the above.

Question 68

Tacit knowledge is probably the most _________ resource.

A)Static
B)Organizationally complex resource
C) Hard-to-imitate
D) Outsourced

Question 69

All of the following are arguments used by proponents of offshoring EXCEPT:

A)It is not true that some US employees may lose their jobs.
B)Western firms are able to tap into low-cost and high-quality labor.
C) Firms can focus on their core capabilities.
D) It creates enormous value for firms and economies.

Question 70

Academic research has found support for ______________effects on firm performance.

A)Resource-based
B)Industry-based
C) Complementary specific collective
D) All of the above

Question 71

When it comes to competing internationally, firms that are successful domestically typically:

A)​Are more successful internationally.
B)​Are on their way to becoming global cult brands.
C) ​Find that cross-border capabilities may or may not be the same.
D) ​Find that factors that lead to success domestically are easily translated to competing internationally.

Question 72

The VRIO framework does not include capabilities and resources that are:

A)Valuable.
B)Rare.
C) Imitable.
D) Organizationally embedded.

Question 73

Critics of offshoring make all of the following arguments except:

A)If even core functions such as engineering, R&D, manufacturing, and marketing can-and often should-be moved outside the country, what is left of the firm?
B)In some cases, it undermines national security.
C) Offshoring increasingly results in job losses in high-end areas such as design, R&D, and IT/BPO.
D) Many large US firms claim that they are "global companies" but they seem to be bound by "American values."

Question 74

Critics of outsourcing agree that firms who outsource aspects of their activities are ineffective at:

A)Exploiting cheap labor.
B)Treating people as "tradable commodities."
C) Upholding corporate social responsibility.
D) Protecting customer privacy.

Question 75

Which of the following is not involved in hypercompetition?

A)A shortened window during which a firm may command competitive advantage.
B)Static yet deliberate maneuvering.
C) Unleashing a series of small, unpredictable, but powerful actions.
D) Attempts to erode rivals' competitive advantage.

Question 76

Examining whether a firm has resources and capabilities to perform a particular activity in a manner superior to competitors is known as _________ in SWOT analysis.

A)Parity
B)Competition
C) Benchmarking
D) Standardization

Question 77

If Company A and Company B both have valuable assets that are identical, the text indicates that in order for A to gain a competitive advantage over B, A must:

A)Use its assets differently.
B)Find some basis for suing B.
C) Get out of its existing business.
D) Increase its quantity of those assets.

Question 78

Firms that have a sustained competitive advantage will find that:

A)​Anticipation of future needs is still necessary.
B)​The particular advantage will last indefinitely.
C) ​Sustained competitive advantage is realistic in today's global competition.
D) ​They have eliminated all non-value-adding activities.

Question 79

Recent research suggests that capabilities in very dynamic high-velocity industries (such as IT) are characterized by all of the following EXCEPT:

A)Simple (not complicated).
B)Experiential (not analytic).
C) Linear (not iterative processes).
D) "Learning by doing."

Question 80

Taking advantage of strengths embodied in resources/capabilities and overcoming weaknesses deals with which fundamental question?

A)Why do firms differ?
B)What determines the scope of the firm?
C) How do firms behave?
D) What determines the international success and failure of firms?