Deck 3: Strategic Capability

Question 1

Which of the following definitely cannot be a core competence?

A) Best in class quality management systems
B) Branding skills
C) Strong profitability
D) Human resource development

Answer 1

C

Question 2

In which ways may customers benefit from economies of scale? Choose all that apply.

A) More product features may be available for the same price.
B) Company profits are increased.
C) All companies in a sector are able to operate more efficiently.
D) Prices may become lower.

Answer 2

A, D

Question 3

Which of the following is not an intangible resource?

A) Legal permissions
B) Patent registrations
C) Quality control procedures
D) Culture
E) Contract agreements

Answer 3

C

Question 4

Which of the following statements is a definition of a 'core competence'?

A) Core competencies are those competencies related to the core business of the organisation, rather than those peripheral areas it has diversified into.
B) Core competencies are the collective learning in the organisation, especially how to co- ordinate diverse production skills and integrate multiple streams of technologies.
C) Core competencies are those strategic capabilities shared by all major players in a given industry sector and distinguish them from those organisations that struggle for survival.
D) Core competencies are the strategic capabilities that an organisation must posses if it is to survive in its chosen environment.

Question 5

An effective internal analysis of strategic capability should provide answers to which of the following questions?

A) Does the organisation posses the basic resources and competencies needed to survive in its environment?
B) Does the organisation target appropriate market segments?
C) What are the resource capabilities of the firm's main rivals?
D) What are the critical success factors that the resources must match?

Question 6

What is meant by an organisation's strategic capability?

A) The capability to respond effectively to the competitive threat posed by rivals
B) The adequacy and suitability of the resources and competences of an organisation for it to survive and prosper
C) This refers to an organisation's ability to think strategically rather than get bogged down in day- to- day operational detail.
D) The ability to undertake effective strategic analysis and develop strategy

Question 7

What does RBV stand for?

A) Real book value
B) Resource based value
C) Resource based view
D) Realisable book value

Question 8

Which two of the following are the key reasons why cost efficiency is becoming a threshold strategic capability?

A) Supplier power increases as product life increases.
B) Barriers to entry increase as cost decreases.
C) Customer do not value product features at any price.
D) Competitive rivalry continually drives down costs.

Question 9

In which of the following organisations do you think core competencies are most dependent on tacit knowledge?

A) Grocery retailing
B) Manufacturers of consumer products
C) Professional service organisations such as consultancies and accountants
D) Heavy engineering

Question 10

What is the difference between explicit and tacit knowledge?

A) Explicit knowledge is equivalent to know- how, while tacit knowledge is know- what.
B) Explicit knowledge can be transferred through books and manuals, while tacit knowledge can only be learned by personal experience.
C) Explicit knowledge is knowledge that is known (i.e. made explicit), while tacit knowledge is yet to be discovered.
D) Explicit knowledge is quantitative in nature, while tacit knowledge is qualitative.

Question 11

The process of applying the value chain model involves which of the following steps?

A) Identification of different types of resources as used in the resource audit
B) Identification of the effectiveness and efficiency of individual activities and processes
C) Aggregation of all the activities of the organisation
D) Allocation of all of the organisation's processes to the categories in Porter's diagram

Question 12

Which of the following reasons explains why many organisations are seeking external linkages as a way of creating more value?

A) Outsourcing is a way of reducing the complexity involved in managing an organisation and creates a 'lean organisation'.
B) Partnership arrangements with suppliers are the key to effective JIT.
C) Outsourcing non- core activities allows the organisation to focus on maximising value creation in its core.
D) Outsourcing is currently fashionable in many industry sectors.

Question 13

What is 'benchmarking'?

A) Setting a standard (benchmark) that acts as a strategic objective for the firm to achieve
B) A performance appraisal system for evaluating the contribution each member of staff makes to overall performance
C) Evaluating an organisation's performance relative to others which are best in class
D) A method of raising quality standards by comparing current performance with last year's data to ensure things improve year on year

Question 14

Which of the following techniques is not a process to reconfigure a value chain?

A) Business process reengineering
B) Differentiation
C) Downsizing
D) De- layering

Question 15

Which of the following is not an implication of the experience curve?

A) Enhancing the product/service offering adds to customer perceived value.
B) Outsourcing to those with more experience can make sense.
C) Growth is not optional in many markets.
D) Organisations should expect real unit costs to decline year on year.
E) First mover advantage can be important.

Question 16

Which of the following are important for understanding strategic capability?

A) Customers and stakeholders
B) Macroenvironment and industry context
C) Resources and competences
D) Skills and knowhow

Question 17

Which of the following statements best explains the value chain model?

A) The value chain is a model for evaluating the linkages between the various departments that make up the organisation.
B) The value chain is a model for evaluating how value is added at all stages in the industry supply chain.
C) The value chain is a model for evaluating the cost and value of the various activities performed by an organisation and how these activities are interlinked.
D) The value chain is a model for evaluating which of an organisation's suppliers offers the best value for money.

Question 18

Which two comments accurately explain what the experience curve predicts will happen as an organisation undertakes any activity?

A) Costs can be increased.
B) The organisation develops competences in the activity.
C) Staff training needs increase to ensure that suitable experience is available.
D) The organisation becomes more efficient at the activity.

Question 19

Which of the following is not a requirement for sustained competitive advantage?

A) Robustness
B) Rarity
C) Customer value
D) Good supplier relationships
E) Non- substitutability

Question 20

What term is used for the resources that underpin competitive advantage and are difficult for competitors to imitate or obtain?

A) Threshold resources
B) Core competences
C) Unique resources
D) Threshold competences

Question 21

Which of the following is a danger for an organisation that uses outsourcing as part of its strategy for reconfiguring its value chain?

A) That the organisation's employees will be replaced by cheaper staff
B) That the firm loses control of activities
C) That core activities will be outsourced and core competencies lost
D) That they will select companies on the basis of lowest price

Question 22

What is the difference between inbound and outbound logistics?

A) Inbound logistics concerns ease of access to a manufacturing site, whereas outbound logistics concerns ease of exit.
B) Inbound logistics involves scheduling of all production activity, whereas outbound logistics involves the despatch of finished goods to the appropriate customer.
C) Inbound logistics is concerned with the processes for handling all deliveries of materials, mail, returned goods, etc. to the organisation, while outbound logistics is concerned with their return to whoever sent them in the event of a problem
D) Inbound logistics describes the purchase of input (feed or raw material) stocks, their storage and internal distribution, while outbound logistics concerns finished goods storage and distribution.

Question 23

Which of the following may be a contributor to strategic drift?

A) Core rigidities
B) Core competences
C) Unique resources
D) Strategic capability

Question 24

Which of the following is not a key stage in the process of an internal analysis?

A) Structural analysis
B) Cultural analysis
C) A resource audit
D) Value chain analysis
E) Scenario planning

Question 25

Which of the following is not one of the criteria for core competences, if they are to create inimitable strategic capabilities?

A) They must easily be transferrable.
B) They must lead to levels of performance that are significantly better than those of competitors.
C) They must be difficult for competitors to imitate.
D) They must relate to an activity or process that underpins the value in the product or service.

Question 26

Which of the following statements accurately relates to economies of scale? Choose all that apply.

A) The introduction of a new supplier generally encourages economies of scale.
B) Economies of scale occur whenever a new product enters the market.
C) Economies of scale relating to distribution are particularly important in the drinks and food industries.
D) Economies of scale are particularly important in industries such as motor manufacturing.

Question 27

Which of the following is not a key stage in the process of analysing strategic capability?

A) Value chain analysis
B) Business process re- engineering
C) Resource audit
D) Activity mapping
E) Analysis of cost and value drivers

Question 28

Which of the following resources do you think is the key resource in attracting students to a university?

A) Reputation
B) Staff skills
C) Financial stability
D) Facilities

Question 29

Which of the following defines the concept of 'core competencies'?

A) Core competencies are the strategic capabilities that an organisation must posses if it is to survive in its chosen environment.
B) Core competencies are the activities and processes through which resources are deployed in such a way as to achieve competitive advantage in ways that others cannot imitate or obtain.
C) Core competencies are those competencies related to the core business of the organisation rather than those peripheral areas it has diversified into.
D) Core competencies are those strategic capabilities shared by all major players in a given industry sector and distinguish them from those organisations that struggle for survival.

Question 30

Which of the following is not one of the four main classes of resources evaluated as part of the internal analysis?

A) Physical resources
B) Human resources
C) Intellectual capital
D) Raw material supplies
E) Intangible resources

Question 31

Which of the following are not sources of cost efficiency?

A) Product/process design
B) Selling prices
C) Experience
D) Economies of scale
E) Supply costs

Question 32

Which of the following is not one of the criteria for assessing the robustness of strategic capability?

A) Benchmarking
B) Complexity
C) Path dependency
D) Culture and history
E) Causal ambiguity

Question 33

What does the term 'competence leveraging' mean?

A) The ability of the firm to exploit its core competencies in new markets meeting new customer needs
B) Sharing expertise with other organisations in a strategic alliance
C) Developing new competencies to stay ahead of the competition
D) Building upon and enhancing the existing capabilities of the organisation to reinforce its advantages

Question 34

Which of the following characteristics is not a test of whether a strategic capability is a core competence?

A) It makes a significant contribution to perceived customer benefits from final products.
B) It is protected by patents.
C) It provides access to a wide variety of markets.
D) It is hard for competitors to imitate.

Question 35

What does it mean to outsource an activity?

A) Contracting with another organisation to carry out non- core activities
B) Contracting with another organisation to carry out core activities
C) Something to do with tomato sauce
D) Buying in expertise from other organisations

Question 36

Which of the following best defines dynamic capabilities?

A) An organisation's ability to develop and change competences to meet the needs of rapidly changing environments
B) An organisation's ability to develop and change competences to meet the rapidly changing needs of customers
C) An organisation's ability to maintain its position as the most cost efficient in its industry/sector
D) An organisation's ability to develop and change its staff if they fail to meet the requirements of the managers

Question 37

Which of the following is not a support activity in the value chain?

A) Marketing and sales
B) Procurement
C) Human resource management
D) Technology development
E) Infrastructure

Question 38

What term is used for the activities that underpin competitive advantage and are difficult for competitors to imitate or obtain?

A) Threshold resources
B) Core competences
C) Unique resources
D) Threshold competences

Question 39

Which of the following is not an implication of the experience curve?

A) Possibility of outsourcing
B) Necessity of continual reduction in costs
C) Importance of first mover advantage
D) Need to enhance perceived customer value

Question 40

Nonaka and Takeuchi differentiate between two types of knowledge. Which are they?

A) Explicit and tacit knowledge
B) Corporate and divisional knowledge
C) Data and information
D) Personal and organisational knowledge

Question 41

The experience curve shows that there is generally an increase in unit costs as the total number of units increases over time.

Question 42

The value chain analyses value drivers not cost drivers.

Question 43

Activity map is used to show how the different activities of an organisation are linked together.

Question 44

Causal ambiguity refers to the inability of an organisation's rivals to determine the exact source of its competitive advantages.

Question 45

Information technology is a critical resource for storing, disseminating and controlling tacit knowledge.

Question 46

The aim of a resource audit is to determine the value added to raw material inputs.

Question 47

The value network shows how the different activities of an organisation are linked together.

Question 48

It is easier to evaluate whether an internal capability as a strength or weakness if you already have an understanding of the key success factors for the external environment.

Question 49

If the capabilities of an organisation do not meet customer needs, at least to threshold level, the organisation cannot survive.

Question 50

The likelihood of sustained advantage through experience curve benefits is high.