Deck 5: The Internal Environment

Question 1

Firms should seek to continually develop new core competencies because all core competencies have limited life spans.

Answer 1

True

Question 2

If an organization possesses a valuable and unique resource,it is always a source of competitive advantage.

Answer 2

False

Question 3

Compared to tangible resources,intangible resources are an inferior source of core competencies.

Answer 3

False

Question 4

Resources are bundled to create capabilities which in turn are the source of core competencies which are then the basis of competitive advantages.

Question 5

Every core competence is a capability and every capability is a core competence.

Question 6

Given enough time,any firm's competitive advantage can be imitated by its competitors.

Question 7

Interpersonal relationships,trust,friendships,and a firm's reputation are all examples of complex social phenomena that make capabilities costly to imitate.

Question 8

The resource-based model assumes that if firms have resources that are rare or costly to imitate,this is sufficient to form a basis for competitive advantage.

Question 9

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

Question 10

If a core competence is emphasized when it is no longer competitively relevant,it can become a core rigidity.

Question 11

A capability is a set of tightly integrated activities,organizational skills,and internally developed routines that relies on ordinary resources. Combining resources into activities eliminates the requirement that they be extraordinary to produce superior performance.

Question 12

Intangible resources include such things as the skills of the founders of a company,the organization's culture,and relationships with key suppliers.

Question 13

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

Question 14

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

Question 15

The more core competencies a firm has,the more likely it is to generate a sustained competitive advantage.

Question 16

Capabilities of an organization emerge spontaneously through the interaction of tangible and intangible resources.

Question 17

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

Question 18

Tangible resources include physical assets such as equipment,buildings,land,furniture,money and patents.

Question 19

Capabilities and resources have the potential to lead to competitive advantage if they are valuable and unique.

Question 20

The foundation of many capabilities lies in the unique skills and knowledge of a firm's employees.

Question 21

The resource-based view of the firm:

A) Emphasizes that it is difficult to develop and sustain a competitive advantage based on resources alone
B) Argues that the industry environment has a stronger influence on firms' ability to implement strategies successfully than does the competitor environment
C) Calls for firms to focus on their homogeneous capabilities to compete against their rivals
D) Suggests that vision and mission are closely linked to sustainable competitive advantage

Question 22

Value chain analysis is a tool used to:

A) Analyze a firm's external environment for value-creating opportunities
B) Analyze a firm's primary and support activity in isolation from influences of the external environment
C) Understand the parts of the firm's operation that create value and those that do not
D) Identify the firm's core competencies in each of the primary activities of the firm

Question 23

Internal analysis enables a firm to determine what the firm:

A) Can do
B) Should do
C) Will do
D) Might do

Question 24

According to the resource-based view of the firm:

A) Strategies are neither deliberate nor emergent
B) Competitors may all develop the same competitive strength
C) The environment offers significant challenges to be overcome
D) Organizations are bundles of resources

Question 25

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

Question 26

Imitation is not likely to be a successful strategy.

Question 27

The resource-based model of the firm argues that:

A) All resources have the potential to be the basis of sustainable competitive advantage
B) Resources alone can be a source of sustainable competitive advantage
C) The key to competitive success is the structure of the industry in which the firm competes
D) Resources that are valuable, rare, costly to imitate, and non-substitutable form the basis of a firm's core competencies

Question 28

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

Question 29

Which of the following is least likely to be a source of sustainable competitive advantage?

A) A unique and valuable relationship with an important stakeholder
B) A computer program
C) An organization's culture
D) An organization's reputation

Question 30

Regardless of the industry,the most valuable links on a firm's value chain will likely be:

A) Financial managers
B) Technology experts
C) People who have knowledge of customers
D) Research and development specialists

Question 31

A realized competitive advantage becomes sustainable when:

A) It is unique, valuable, and based on strong financial resources
B) It involves all of the functional areas of the organization
C) It is based on physical assets rather than knowledge
D) It is based on a resource or capability that is difficult to imitate by competitors and there is no readily available substitute

Question 32

Compared to tangible resources,intangible resources are:

A) Of less strategic value to the firm
B) Not the focus of strategic analysis
C) A superior source of core competencies
D) More likely to be reflected on the firm's balance sheet

Question 33

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

Question 34

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

Question 35

If an organizational capability or resource is valuable and unique,but it is easy to imitate:

A) It cannot be a source of competitive advantage
B) It is likely to lead to a sustainable competitive advantage
C) It is a core competency or capability
D) It can be a source of competitive advantage for a limited period of time

Question 36

What is the most logical relationship between a sustainable competitive advantage and an organizational strength?

A) A sustainable competitive advantage is a strength that is difficult for competitors to imitate
B) A strength cannot be duplicated while a sustainable competitive advantage is easily copied
C) Every strength leads to a sustainable competitive advantage
D) Every sustainable competitive advantage leads to a strength

Question 37

By emphasizing core competencies when formulating strategies,companies learn to compete primarily on the basis of:

A) Intangible resources
B) Their primary activities
C) Firm-specific differences
D) Efficiency of production

Question 38

When resources and capabilities serve as a source of competitive advantage for a firm,the firm has created a(n):

A) Strategic mission
B) Inspiring vision
C) Core competence
D) Sustainable market niche

Question 39

Primary activities of the value chain include all of the following except:

A) Inbound logistics
B) Procurement
C) Marketing and sales
D) Service

Question 40

According to the resource-based view of the firm:

A) Organizational resources include physical resources such as plants
B) One of the most important roles of strategic managers is to manage resources so as to produce a sustainable competitive advantage
C) Organizational resources include organizational culture
D) All of the above

Question 41

When the link between a company's resources and its competitive advantage is poorly understood a state of ________ exists.

A) Causal ambiguity
B) Market uncertainty
C) Poor management
D) Strategic uncertainty

Question 42

Traditional resource-based view:

A) Overemphasizes leveraging existing resources/capabilities
B) Underemphasizes developing new resources/capabilities
C) Both of the above
D) Underemphasizes leveraging existing resources/capabilities

Question 43

Which of the following questions should repeatedly be asked of managers to help them understand the nature of their core resources?

A) What products or services are most likely to be successful in the market?
B) Who are your most important competitors?
C) What is the cause of this outcome?
D) What do your competitors do well that you do not?

Question 44

Describe the importance of internal analysis to the strategic success of the firm.

Question 45

What is the relationship between resources and capabilities? Is one more important than the other in creating a sustainable competitive advantage?

Question 46

Explain the value chain and how it can be used to help firms develop competitive advantages.

Question 47

Define capabilities and how they affect the firm's strategic success.

Question 48

Briefly describe the steps involved in a resource-based analysis.

Question 49

Resources that are not physical in nature,including such things as relationships with suppliers,an organization's culture,business processes or the skills of the founders are ________ resources.

A) Ephemeral
B) Intangible
C) Creative
D) Exemplary

Question 50

Which of the following is a potential drawback of value chain analysis?

A) It offers a heavily market-based view
B) It depends on information systems to provide useful data
C) It requires managers to set aside time from their regular duties to examine data
D) It requires thorough knowledge of financial ratios if it is to be done right

Question 51

What is the difference between a tangible and an intangible resource? Give an example of each? Which of these types of resources is most likely to lead to competitive advantage? Why?

Question 52

Explain the essential characteristics of a resource or capability that leads to a sustainable competitive advantage.

Question 53

Describe the four specific criteria that managers can use to decide which of their firm's capabilities have the potential to create a sustainable competitive advantage.

Question 54

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

Question 55

Having valuable,but common resources/capabilities leads to:

A) Competitive parity.
B) Competitive advantage.
C) Competitive disparity.
D) Competitive disadvantage

Question 56

What is the resource-based view of the firm? What categories of resources does a firm possess?

Question 57

Tacit knowledge is probably the most _________ resource.

A) Valuable
B) Unique
C) Hard-to-imitate
D) All of the above

Question 58

Value chain activities:

A) Are used to identify the industry profit pool that the firm should target
B) Show that there are multiple means that can be used to implement a business strategy
C) Focus on the links between primary activities, because these are the true source of competitive advantage for the firm
D) Can be used in not-for-profit organizations if the analysis focuses on support activities

Question 59

Significant results of a value chain analysis include which of the following?

A) It can identify how much of a contribution is made by some of the intangible service activities performed in the company
B) It can shed light on how or where in the company the creation and capture of value can be enhanced and/or costs can be lowered without sacrificing value
C) It creates a better understanding of the complete set of value-creating activities in which the company engages
D) All of the above

Question 60

Which of the following is not one of the basic methods for conducting an internal analysis?

A) Resource-based analysis
B) SWOT analysis
C) Value chain analysis
D) Probability-impact analysis

Question 61

What are some of the things that make a resource or capability difficult for competitors to imitate?

Question 62

Briefly describe the steps to be taken when performing a value chain analysis. Don't merely list them; be sure to explain each step.