Deck 3: Internal Analysis: Strengths, Weaknesses, and Competitive Advantage

Question 1

Which of the following statements is true of a value chain?

A) It is a process of analyzing the corporate social responsibilities of a company.
B) It is a process of enhancing value by eliminating quality checks in a company.
C) It is a method of analyzing the feedback a company receives from its clients.
D) It is a method of depicting and evaluating the activities performed by a company.

Answer 1

D

Question 2

The employees at Voyage Ink Corp.were asked to draw a chart that explains the elements which go into making one of their products.They were asked to create a diagram showing the different types of materials that help create the whole product.Which of the following are the employees at Voyage Ink Corp.creating in this scenario?

A) A value chain
B) A product line
C) A virtuous circle
D) A growth-share matrix

Answer 2

A

Question 3

The customers, investors, and employees of Pisces Inc.are invariably satisfied with the services and culture of the company.Pisces Inc.has delivered on all its promises and has continued to create a sense of worth among its varied audiences.Which of the following terms best categorizes the elements of Pisces Inc.described in this scenario explaining?

A) Competitive parities
B) Dynamic capabilities
C) Network externalities
D) Operating capabilities

Answer 3

D

Question 4

Which of the following is true of a tangible resource?

A) It is an economically valuable asset such as brands and patents.
B) It has a physical presence such as land, machinery, and cash.
C) It includes employee and management skills and talents.
D) It includes organizational assets like knowledge and reputation.

Question 5

The management at WonderPlanners Inc.wants to improve their production and operating capabilities by adopting a leaner process.As such, the employees of WonderPlanners are asked to eliminate the excess use of efforts and materials.WonderPlanners Inc.finally manages to achieve a competitive advantage after its employees follow these new practices repeatedly over time.From the information given in this scenario, we can infer that WonderPlanners Inc.has developed _____.

A) competitive parity
B) dynamic capabilities
C) service inimitability
D) network externalities

Question 6

All assets, capabilities, organizational processes, firm attributes, information, knowledge, and so on, controlled by a firm that enable the firm to conceive of and implement strategies that improve its efficiency and effectiveness most accurately defines the term _____.

A) priorities
B) capabilities
C) resources
D) functions

Question 7

LittleHut Inc., an international food company, has a number of resources to its credit.Over the years, the company has acquired factories, machinery, in-depth knowledge, and a stable reputation.The elements mentioned in this scenario can be best categorized as LittleHut Inc.'s _____.

A) equipment
B) personnel
C) assets
D) capabilities

Question 8

The procedures, processes, or routines for delivering value to customers, employees, suppliers, or investors most accurately define the term _____.

A) competitive parities
B) operating capabilities
C) dynamic capabilities
D) network externalities

Question 9

Value is usually created when:

A) the end user enjoys direct pleasure and satisfaction from a company's product.
B) a company survives but has no real competitive advantage over rivals.
C) a company eliminates quality control processes as much as possible.
D) the steps in the production chain of a company are reduced.

Question 10

A survey is conducted among the customers of a supermarket chain.This survey reveals that the majority of these customers prefer to buy Lia, a brand of soap, because they feel that the company Lia Products Inc.has created a product that is of worth to the customers.The reason for the customers' preference is because the company constantly delivers what it promises.In this scenario, the factor that has made the brand of soap named Lia popular among these customers can be best categorized as _____.

A) value
B) rarity
C) inimitability
D) prestige

Question 11

A firm's values and rankings of what is most important most accurately defines the term _____.

A) assets
B) priorities
C) resources
D) capabilities

Question 12

Pinto's Home Bakes is a 64-year-old company established in the year 1950.The company has been providing freshly baked breads and pastries daily for many years and has created a high reputation for itself.Its customers have always been satisfied with its timely service and delivery.The customers of Pinto's Home Bakes state that they prefer to go this deli because the products it delivers are never stale and have a unique flavor.Which of the following has Pinto's Home Bakes created for its customers?

A) Priority
B) Value
C) Parity
D) Prestige

Question 13

The employees at Williamson Corp.are finding it hard to manage their daily work in an efficient manner.They are consistently not able to meet their daily targets because they have too much of unorganized workload to handle.Frustrated, they seek help from their managers requesting them to create a system wherein they are allotted work according to their level of importance, so that the important work gets done before they take up the work that is categorized as comparatively lesser important.This system is put into practice, and the employees find it easier to handle work in a systematic and sequential manner.From the information given in this scenario, we can infer that Williamson Corp.has worked out its _____.

A) priorities
B) capabilities
C) parities
D) attributes

Question 14

A visual description of the steps required to turn raw materials into finished products and/or services most accurately defines the term _____.

A) virtuous circle
B) culture chain
C) value chain
D) product line

Question 15

Erik, the CEO of Indigo Inc.wants to improve the efficiency and effectiveness of his company.In order to do this, he lists out the assets of Indigo and the knowledge that the company has acquired over the years.Erik also analyzes the company's processes and its overall culture.The factor of production that Erik is studying can be best categorized as:

A) capabilities.
B) resources.
C) attributes.
D) priorities.

Question 16

Which of the following is a disadvantage of the value chain process?

A) It does not help analyze a company's strength compared to its competitors.
B) It does not take into account firm infrastructure or human resource management.
C) It does not help managers to identify areas in which a firm has an absolute strength.
D) It does not span all of a firm's economic activities.

Question 17

Procedures, processes, and routines that continuously expand existing resources or improve operating capabilities most accurately define the term _____.

A) network externalities
B) competitive parities
C) dynamic capabilities
D) operating capabilities

Question 18

Resources that create _____ can be defined as those that create economic value for a firm.

A) opportunities
B) liabilities
C) costs
D) profits

Question 19

Neptune LLC is a company that manufactures electronic products.Its employees are given specific guidelines regarding the resources and capabilities that they should invest their company's money and time in.The employees are expected to follow these guidelines during Neptune's lean as well as peak seasons.Which of the following terms best reflects the guidelines that the employees of Neptune LLC are expected to follow?

A) Capabilities
B) Assets
C) Priorities
D) Attributes

Question 20

Todd & Tyler Inc.is an organization that has gained reputation in the market primarily because of its values.The managers of this organization have created a list that ranks the most important job of the day and then consecutively lists the other jobs according to a descending order of importance.In this way, the managers of Todd & Tyler Inc.ensure that the organization's deadlines are handled efficiently.From the information given in this scenario, we can infer that Todd & Tyler Inc.has worked out its _____.

A) parities
B) capabilities
C) attributes
D) priorities

Question 21

TumbleDry Inc., a washing machine company, has been able to make minimal profits in the market.However, TumbleDry has not been able to come up with any product innovations that are unique and hard to imitate.This scenario best exemplifies _____.

A) competitive success
B) competitive failure
C) competitive parity
D) competitive advantage

Question 22

Leon Royal Hotel was the first inn in the county of Belvore.It had started out as a small investment with seven rooms, providing bed and breakfast in 1949 to many travelers who came to Belvore.Another inn called Meltown Inn started out a decade after Leon Royal Hotel.After 20 years of giving unique and satisfying service to its customers, Leon Royal Hotels was well established as a large hotel with more than 1,500 rooms.The facilities and services provided by the hotel made it one of the best hotels in the Belvore, while Meltown Inn started losing profits and eventually shut down in 1968 because of providing bad service.Which of the following factors of inimitability is explained in this scenario?

A) Tacit knowledge
B) Path dependence
C) Casual ambiguity
D) Complexity

Question 23

A media house wanted to report on the continued success of the software company, AlphaDigiPro Inc.The reporters decided to assess the company in two ways.They spoke to the top management employees and handed out questionnaires to other employees.The results of these data collection techniques helped the media house construct a good article.This scenario illustrates the use of _____.

A) focus groups
B) archival data
C) interviews
D) observation

Question 24

Bertha, a business analyst, wants to analyze Shop Wise Inc., a software company.She wants to know how the company, supplying its products and services for over a decade, still maintains competitive advantage over other companies.She does the analysis simply by walking around the company and taking notes.She even tries out one of the company's software programs and finds it useful.This scenario illustrates the use of _____.

A) interviews
B) focus groups
C) archival data
D) observation

Question 25

A company named Runathon Inc.had opened its store that displayed only shoe brands.The employees at the store were very service-oriented, and attended their customers and solved their queries efficiently.Runathon also had a special team of experts who advised customers on the type of shoe to choose for a particular sport.Few years later, another company called FitRight Corp.opened its store right opposite Runathon.Although FitRight had shoe brands, trekking gear, and sportswear displayed in its store, it was not able to attain the profits that Runathon did because its salespeople were not as experienced and learned as Runathon.Which of the following factors of inimitability did Runathon Inc.have?

A) Complexity
B) Time compression diseconomy
C) Path dependence
D) Virtuous circle

Question 26

Kleo wants to start his own textile business.He believes that the best way to pull customers into buying his product is to be the first to create lightweight woolen jackets that would keep an individual warm and would also look good on the person.He decides to set up his store in the small town of Marida, which has a rough wintery season almost throughout the year.Kleo believes that he will be able to achieve plenty of profits with this idea with a commodity that is a needed all throughout the year.Which of the following statements strengthen Kleo's idea?

A) Kleo requires a colder place than the town of Marida in order to make profits using these woolen jackets.
B) The people of Marida are not ready to welcome any type of commercialism in their town.
C) Kleo feels his customers will not be willing to try out a lightweight jacket as they believe it will not be able to keep them warm.
D) Kleo has access to all the clothing materials that will be needed to create these jackets.

Question 27

Michelle, the CEO of Nariko Jets, an airlines company, stated that she owes the credit of her professional success to the time spent as a volunteer at a homeless shelter and her passion for artwork.She said that she learned to never stop dreaming from her work as a volunteer.Nariko Jets, according to Michelle, was the result of her combined efforts at life lessons that she learnt at the homeless shelter and her paintings which provided her the inspiration to help create passenger and jet airlines that would make travel easier and comfortable.Her competitors have always envied her success.Which of the following factors of inimitability is best reflected in this scenario?

A) First-mover advantage
B) Positive network externalities
C) Causal ambiguity
D) Tacit knowledge

Question 28

UniFront Corp., a telecommunications company, has launched a new limited edition smartphone called zNINE that has advanced technology features and is built using high-grade material.The company has made only 99 of these zNINE cellphones and customers are ready to pay more than what the cellphone is worth because it is so limited in number.This scenario can be best categorized as an example of _____.

A) parity
B) complexity
C) rarity
D) inimitability

Question 29

If a project requires a $20 million investment a year for the next two years, time compression diseconomies mean that you can't get the same results by spending $40 million in one year.MediCure Corp.is a pharmaceutical company that invested $30 million during the last financial year on research.The CEO of its rival company, PolyMed Inc., decides to spend $60 million on the research during the next year in order to exceed the findings of MediCure.However, PolyMed fails to get the same results.Which of the following best reflects the factor that acted as a barrier to imitation for PolyMed Inc.?

A) Tacit knowledge
B) Path dependence
C) Complexity
D) Time compression diseconomy

Question 30

The exclusive sofa company, Seaterz Inc., has the best resources in terms of equipment, employees, infrastructure, and technology.Yet, it is not able to keep pace with its competitor SoftSofa Corp.After extensive analyses, the CEO of Seaterz stated the reason for their limitation.He stated that their company did not have a definite administrative system to audit and retain the profits created by the employees.Which of the following statements can be inferred about Seaterz Inc.from this scenario?

A) It was not organized to exploit.
B) It was not organized to perform.
C) It does not have competitive parity.
D) It has a successful virtuous circle.

Question 31

Speed Express, a courier company, proves to be a definite challenge to its competitors.The technology, personnel, services, and organizational structure of the company are intricately bound together to create a system that is widely appreciated by its customers.Speed Express has state-of-the-art facilities for its transportation, delivery, or packaging operations.Speed Express also has a range of travelling bags and brand of wrist watches.The company's success rests on the complex interplay between all of its functions, products, and operations.Customers remain loyal to the company and prefer it over other brands and services.Which of the following factors of inimitability does Speed Express have?

A) Time compression diseconomy
B) Path dependence
C) Complexity
D) Tacit knowledge

Question 32

Kevin, the General Manager at KlockWorks Inc., wants to assess the true worth of his company.Kevin wants to know the amount of profits accrued by the company, its strengths and weaknesses, and how far ahead is the company compared to its rivals.In order to conduct the research, he does an online search, studies the annual reports, the audits, and pays a visit to a local library.Which of the following types of data gathering techniques for company diamond analysis is being illustrated in the scenario?

A) Observation
B) Interviews
C) Archival data
D) Focus groups

Question 33

Lynx Inc., a startup firm, has been trying to sell its product to customers.However, the customers do not perceive any value in the product and neither do they find it unique in any way.Lynx Inc.also does not have proper systems and processes that can help in auditing and retaining the profits created by their employees.The company has drained its funds in the process, but it has not been able to successfully establish itself in the market.As a result, the firm has not been able to successful to its stakeholders.Ultimately, the board of directors at Lynx Inc.decides to shut it down completely.This scenario best exemplifies _____.

A) competitive advantage
B) competitive parity
C) competitive success
D) competitive failure

Question 34

LuxeDrive Inc.is an automobile company with unmatched competition because it has certain qualifications and assets that set it apart from the rest of the companies selling similar products.These act as qualifications that rival companies find hard to configure and replicate.This scenario regarding LuxeDrive Inc.can be best categorized as an example of _____.

A) serviceability
B) reliability
C) inimitability
D) parity

Question 35

ZipTag Inc.is an online company that allows venders of varied products to display their products to prospective buyers.This company has been providing service to both customers and sellers and has established itself in the market as a credible company to conduct business with.This has caused more dealers to display their products in ZipTag as they trust that the company will provide the necessary advertising to pull in prospective customers.This is an example of a _____.

A) time compression diseconomy
B) virtuous circle
C) tacit knowledge
D) path dependence

Question 36

The CEO of Saturn Interiors Corp., an interior designing company, stated in an interview that he credits the company's success to the scenic environment that the company is located in.The employees of Saturn Interiors are inspired by the beauty of nature and that helps them create perfectly aesthetic homes for their customers.A similar company named Virgo Designs LLC had also started up in the same location and around the same time as Saturn Interiors.However, this company was unable to provide the same services to its customers even though the management hoped to do what Saturn Interiors did.It was later found that the employees of Saturn Interiors were trained in a specific way, and the culture of the company was very different from the way Virgo Designs functioned.Which of the following factors of inimitability does Saturn Interiors Corp., have?

A) Tacit knowledge
B) Complexity
C) Causal ambiguity
D) Path dependence

Question 37

Weavers Inc., a popular clothing brand, has been providing its customers with the best quality silk products for many years.The employees of Weavers Inc.use pink berry silkworms for their silk products and weave their greased silk threads in such a way that they produce different shades of colors when held at different angles.Weavers Inc.has been providing unmatched service toward millions of customers around the world.Other companies have tried to imitate their products and services, but have not been successful.Few competitors who captured these silkworms did not know the precise temperatures that were essential for their breeding and survival.Which of the following factors of inimitability does this scenario regarding Weavers Inc.best reflect?

A) Positive network externalities
B) Tacit knowledge
C) Time compression diseconomies
D) Causal ambiguity

Question 38

Rize Inc.has been running efficiently as a real estate organization for 25 years.It has consistently provided customer satisfaction by maintaining a customer-friendly culture in the organization.Their competitors have not been able to replicate Rize's services.This has helped then generate and hold on to profits accrued by its vast and rare resource pool.This is an example of _____.

A) inconsistent competitive advantage
B) sustained competitive advantage
C) competitive parity
D) competitive failure

Question 39

Annabey Inc., a small candy manufacturing company established in 1937, now has several large units that sell unique flavors of candies and assorted chocolates.When the company started out in 1937, it initially experienced slow growth as it was selling brand new products in the market, but later on, their sales picked up at a drastic speed when customers decided to try their products.The CEO of Annabey credits its growth to all the customers who love their candies and chocolates.Which of the following factors of inimitability is best reflected in this scenario?

A) Positive network externality
B) Time compression diseconomy
C) Virtuous circle
D) Complexity

Question 40

Walter Evans, the founder of IronRod Shipping Industry, in order to manage his company more efficiently, suggested using the company diamond model to help counter the fierce competition in the market.Walter believes that this is a successful model and that it would open new doors into the line of systematic and efficient work processes.He believes the model to be an all-purpose solution whether it is in terms of managing resources, prioritizing work, or acknowledging capabilities.Which of the following would strengthen Walter's suggestion to adopt the company diamond method?

A) Since the model relies exclusively on data provided by the company, Walter thinks that it will work in favor of the company.
B) Since the model avoids taking into account the company's weaknesses, it is more likely to be successful.
C) The model will only be fully successful if all employees comply to follow through.
D) The model will allow Walter to fully become aware of the limitations and assets of his company.

Question 41

What is an asset and how does it create an economic value to an organization?

Question 42

The characteristics that make a resource or capability difficult to imitate is known as _____.

Question 43

Differentiate between explicit knowledge and tacit knowledge.

Question 44

A resource creates _____ if its contributions allow a company to produce a product or service that is of worth to end users.

Question 45

Define rarity and explain how it creates competitive advantage.

Question 46

What is an intangible resource?

Question 47

A firm's advantage becomes stronger if it develops _____, processes that are designed to continuously expand existing resources or to improve or modify operating capabilities.

Question 48

State the difference between operating capabilities and dynamic capabilities.

Question 49

Define resources.

Question 50

Define capabilities and briefly describe the two types of capabilities.