Deck 4: Internal Analysis: Resources, Capabilities, and Core Competencies

Question 1

The management of a company is assessing the value of all the tangible resources the company owns.Which of the following will be included in this assessment?

A) the company's copyrights
B) the company's brand equity
C) the company's patents
D) the company's machinery

Answer 1

D
Explanation: The company's plant and machinery will be included in the assessment of the value of all the tangible resources the company owns. Tangible resources have physical attributes and are visible. Examples of tangible resources are labor, capital, land, buildings, plant, equipment, and supplies.

Question 2

Which of the following statements accurately brings out the difference between tangible and intangible resources?

A) Tangible resources contribute to a company's competitive advantage, whereas intangible resources fail to do the same.
B) Tangible assets can be bought on the open market, whereas intangible assets cannot be easily purchased.
C) Tangible resources take a longer time to build, whereas intangible assets can be built comparatively easily.
D) Tangible assets are difficult to imitate, whereas intangible assets can be easily replicated.

Answer 2

B
Explanation: Tangible assets, like buildings or computer servers, can be bought on the open market by any comers who have the necessary cash. However, a brand name must be built, often over long periods of time.

Question 3

_____ are best described as unique strengths,embedded deep within a firm,that allow a firm to differentiate its products and services from those of its rivals,creating higher value for the customer or offering products and services of comparable value at lower cost.

A) Resource leverages
B) Core competencies
C) Capital gains
D) Equity reserves

Answer 3

B
Explanation: Core competencies are unique strengths, embedded deep within a firm. They allow a firm to differentiate its products and services from those of its rivals, creating higher value for the customer or offering products and services of comparable value at lower cost.

Question 4

Which of the following is an example of a firm's resources?

A) routine activities like order taking and invoicing customers, performed in a firm
B) assistance available from the government in the form of rules and regulations
C) assets such as land and buildings owned by a firm
D) liabilities such as bills payables and short-term debts

Question 5

Dandelions Max is a consumer electronics company.It has acquired an edge over its competitors through its ability to provide breakthrough technology at the lowest price in the market.This advantage of Dandelions Max best exemplifies a

A) markup.
B) resource flow.
C) capital gain.
D) core competency.

Question 6

Amazon.com's ability to provide the largest selection of items online,combined with superior IT systems and customer service,can be referred to as its

A) equity reserve.
B) economic equity.
C) core competency.
D) capital gain.

Question 7

Although True Ion Inc.and One Electro Inc.operate in the same consumer electronic industry,True Ion Inc.has better sales and brand equity.This is attributed to True Ion Inc.'s commitment to innovation.The company has adequate financial and human capital to invest in research and development,an area in which One Electro Inc.lacks.In this scenario,which of the following critical assumptions of the resource-based view of a firm has been illustrated?

A) resource equality
B) resource heterogeneity
C) resource mobility
D) resource maturity

Question 8

As a result of _____,a critical assumption in the resource-based model of a firm,the resource differences that exist between firms are difficult to replicate.

A) resource immobility
B) resource homogeneity
C) resource perishability
D) resource equality

Question 9

Due to resource immobility,a critical assumption in the resource-based model of a firm,the

A) competitive advantage of a firm exists for a short period of time.
B) resource bundles of a firm can be easily imitated by competitors.
C) resource differences between firms last for a long time.
D) competencies and capabilities of all firms in an industry are similar.

Question 10

Which of the following is an example of a firm's intangible resources?

A) the firm's cash at bank
B) the firm's finished goods inventory
C) the firm's organizational culture
D) the firm's land and building

Question 11

Kaleidoscope Inc.is a leading international apparel company.Competitors across the globe have failed to imitate Kaleidoscope Inc.'s production models,supply chain systems,knowledge systems,and culture.These attributes have remained unique to Kaleidoscope Inc.for a long time.Which of the following assumptions of the resource-based model of competitive advantage does this scenario best illustrate?

A) resource homogeneity
B) resource perishability
C) resource equality
D) resource immobility

Question 12

Home Value Inc.,Max Cart Inc.,and Nice Necessities Inc.are three consumer-product retailing companies.Their products consist primarily of day-to-day items that are easy to imitate and sell.All three companies use the same resources and capabilities in the production and distribution of their products.Which of the following is an implication of the market condition indicated in this scenario?

A) Resource immobility of the firms will be low.
B) The industry structure will be far from perfect competition.
C) Barriers to entry within the industry will be high.
D) Any advantage that one firm has will be short-lived.

Question 13

Smooth Fusion Inc.is a software company,which has built and acquired numerous assets over the years.According to the resource-based view of a firm,which of the following assets of Smooth Fusion Inc.will best enable it to gain and sustain a competitive advantage?

A) the resources of the company that are mobile
B) the capital raised by the company from its shareholders
C) the expertise acquired by the employees in the company
D) the headquarters owned by the company

Question 14

In the context of the resource-based model of competitive advantage,if a successful firm exhibits resource immobility it means that the

A) rival firms have better accessibility to quality resources.
B) firm will have a sustained competitive advantage because of its unique resources.
C) competitors can easily replicate or copy the firm's resource bundles and capabilities.
D) resources of the firm cannot be effectively deployed within its own organization.

Question 15

Coral Think Inc.is a new company in the publishing industry.It has raised sufficient capital from multiple sources.It is planning to use its capital to purchase certain assets.Which of the following assets will be the most difficult for Coral Think Inc.to acquire using its capital?

A) inventory
B) tools and equipment
C) land and building
D) brand name

Question 16

GN Corp.and BC Inc.are two competing firms in the same industry.GN Corp.'s tangible assets are valued at $15 billion and its intangible assets are valued at $35 billion.BC Inc.'s tangible assets are valued at $5 billion and its intangible assets are valued at $45 billion.What can be concluded from this information?

A) It is easier to buy intangible assets with cash than tangible assets.
B) It is likely that BC Inc. is better enabled than GN Corp. to gain and sustain a competitive advantage.
C) It takes longer time to build tangible assets than intangible assets.
D) There is no resource heterogeneity between the two firms, BC Inc. and GN Corp., as they operate in the same industry.

Question 17

Organizational and managerial skills that find their expression in a company's structure,routines,and culture are referred to as

A) tangible resources.
B) reserves.
C) capital gains.
D) capabilities.

Question 18

Intangible assets add great value to a firm primarily because the firm's

A) reputation and brand equity are accumulated quickly and can be leveraged easily.
B) knowledge and culture take time to develop and are generally difficult to imitate.
C) tangible assets require a higher degree of capital than its intangible assets.
D) capabilities are by nature typically tangible.

Question 19

Beats Electronics has been able to outperform Audio-Technica,Bose,JBL,Skullcandy,Sennheiser,and Sony in the high-end,premium headphone market.Which of the following statements accurately explains one of the main reasons for the success of Beat?

A) It produced the highest-quality headphones.
B) It created a perception that owning its products was cool.
C) It emphasized marketing over core competency.
D) It focused on sponsoring future athletic superstars.

Question 20

The resource-based view of a firm assumes that the

A) resources of firms are highly scarce and hence the government interferes to ensure equal distribution.
B) resources of firms are highly exhaustible and hence they cannot contribute to their competitive advantage.
C) resource bundles of firms competing in the same industry are unique to some extent and thus differ from one another.
D) resource bundles of firms competing in the same industry tend to be highly mobile, moving easily from firm to firm.

Question 21

Next Door Cellular is a leading mobile network operator.Since most of the resources used by Next Door Cellular are easily available,the company's brand name is the only resource that distinguishes it from the other operators.No other competitor in the industry has a strong brand name like that of Next Door Cellular.This unique asset that has helped the company gain a competitive advantage will be considered as a(n)_____ resource in the VRIO framework.

A) tangible
B) mobile
C) imperishable
D) rare

Question 22

The competitive advantage that one firm has will be short-lived in an industry where

A) resource immobility is high.
B) perfect competition exists.
C) resource heterogeneity is high.
D) capabilities of a firm are not easily replicable.

Question 23

How are the critical assumptions of the resource-based model of a firm fundamentally different from the way in which a firm is viewed in the perfectly competitive industry structure?

A) In the resource-based model, resources are freely available and mobile, whereas in the perfectly competitive industry structure, resources are highly immobile.
B) In perfect competition, it is extremely difficult to replicate the resource bundles of a firm, whereas in the resource-based model, it is extremely easy to imitate them.
C) In perfect competition, all firms have access to the same capabilities, whereas in the resource-based model, resource differences exist between firms in the same industry.
D) In the resource-based model, only physical assets of a firm are considered as resources, whereas in perfect competition, a firm's capabilities and competencies are also considered as resources.

Question 24

The perfectly competitive industry structure differs from the resource-based model in its view that

A) all firms have access to the same resources.
B) accessibility to bundles of resources differ across firms.
C) resources tend to be "sticky."
D) competencies differ across firms working in the same industry.

Question 25

If a resource is common

A) competitive advantage will persist with one firm for a long period of time.
B) it will result in perfect competition.
C) it will result in greater resource immobility.
D) competitive parity will cease to exist.

Question 26

In knowledge-intensive industries,the marginal costs after initial invention are

A) low.
B) high.
C) moderate.
D) unpredictable.

Question 27

A firm's resource is most likely to be an internal strength and a core competency when the resource is

A) valuable but common.
B) valuable and costly to imitate.
C) easily accessible and mobile.
D) easy to substitute.

Question 28

True Moto Corp.(TMC)is a leading automobile company.The company has been able to sustain its competitive advantage primarily due to its high-quality and efficient electric motors.Most of its competitors have failed to develop similar electric motors at a reasonable price.Which of the following resource attributes listed in the VRIO framework has helped TMC sustain its competitive advantage?

A) resource mobility
B) inexhaustible nature
C) intangibility of the company's resource
D) high costs involved in imitation

Question 29

In the context of the resource-based model of competitive advantage,which of the following scenarios best exemplifies resource immobility?

A) AP Corp. has earned a good reputation among its shareholders by investing more in tangible assets over intangible assets.
B) Two Triangle Inc. has lost its market share because its resources are not mobile, that is rigid, inflexible, and static.
C) Blue Elixir Corp. has been able to gain a competitive advantage because of its ability to efficiently move its resources from one manufacturing unit to another.
D) True 3 Inc. has been able to outperform its competitors because the uniqueness of its resources is difficult to replicate.

Question 30

Gene Craft Inc.is the market leader in the pharmaceutical industry.Though most of its resources are common to those of its competitors,a few rare resources have helped the company gain and sustain a competitive advantage.Which of the following assets of Gene Craft Inc.is most likely to be considered a rare resource that is best contributing to its competitive advantage?

A) the company's land and buildings
B) the company's plant and machinery
C) the company's raw material supplies
D) the company's chemical patents

Question 31

With regard to the VRIO framework,Crocs Shoes was unable to sustain its competitive advantage primarily because its products were

A) invaluable and common.
B) easy to imitate.
C) extremely expensive.
D) non-substitutable.

Question 32

The "Gold Crisps" potato wafers manufactured by True Foods Inc.have been the highest selling wafers in the market.Though the market for wafers is flooded with competitors,True Foods Inc.has been able to maintain its market position for a long time.This is mainly attributed to the unique taste of the wafers that comes from the unique natural flavoring used by the company.This competency of True Foods Inc.will be considered as a(n)_____ resource in the VRIO framework.

A) inexhaustible
B) rare
C) intangible
D) virtual

Question 33

Otion Inc.is a relatively new firm in the consumer electronics industry.The company's primary objective is to become the market leader in less than 5 years,for which it has to gain and sustain a competitive advantage.In the context of the VRIO framework,which of the following resources should Otion Inc.primarily focus on to achieve its objective?

A) quality standards, which are common and mandatory throughout the industry
B) inexpensive unskilled labor that is easily accessible by all companies
C) component parts that are sourced from competitors' suppliers
D) production systems that reduce costs by 30 percent below the current industry standards

Question 34

The "diagonal assembly system" was a production system pioneered by the automobile company Gogo.Recently,Gogo was able to sue a competitor and won the suit,thereby receiving $100 million in damages.Which of the following would most likely enable Gogo to win such a lawsuit?

A) The competitor used a title for its assembly system that was similar to the title of Gogo's system.
B) The competitor failed to apply for a patent of its assembly system.
C) The competitor infringed on Gogo's patent of the "diagonal assembly system."
D) The competitor produced an assembly system that was somewhat similar to Gogo's system.

Question 35

Trust Machines Inc.is a company that manufactures and markets consumer electronics.The unique microprocessors developed by the company contribute to its high resource immobility.According to the resource-based view of competitive advantage,which of the following is an implication of this situation?

A) The competitive advantage of Trust Machines Inc. will soon be lost.
B) The resource heterogeneity of Trust Machines Inc. is low within the industry.
C) The resources of Trust Machines Inc. are difficult to replicate or imitate.
D) The environment in which Trust Machines Inc. operates is closest to perfect competition.

Question 36

If a resource is rare or unique to a particular firm,then

A) the industry in which the firm operates will experience perfect competition.
B) the mobility of the resource will be high.
C) the firm will be able to maintain a competitive advantage for a long period.
D) it will be less costly for rivals to imitate the resource.

Question 37

Riya has recently started a restaurant in a commercial area where there are many other established restaurants and popular fast-food chains.Riya owns the plot on which her restaurant is located and this makes her cost of operations lower than the competitors.This factor allows her to offer her products at a competitive price.Riya has also invested a huge amount on the interiors of the restaurant and in equipping the kitchen with the latest appliances used by her competitors.In this scenario,which of the following is the most valuable resource for Riya's business?

A) the investments made by Riya on the restaurant's interiors
B) the latest kitchen equipment that is at par with the restaurant's competitors
C) the restaurant's late entry into the market
D) the land owned by Riya, which reduces cost of operations

Question 38

If Finolo and Ethver,companies that manufacture televisions,develop the same customer knowledge base and create products that provide the same customer appeal as Invoro,a market leader in consumer electronics,then

A) Finolo and Ethver will have a VRIO resource.
B) Invoro will have a resource that is valuable but no longer rare.
C) Invoro will have a sustainable competitive advantage in the industry.
D) Invoro will have a resource that is rare but no longer valuable.

Question 39

Crystal Tech Inc.'s competency in designing and manufacturing efficient microprocessors has made its laptops the most advanced computers in the market.This competency,along with the just-in-time manufacturing system,has enabled Crystal Tech Inc.to increase its profitability by lowering its production costs.Thus,Crystal's competency in designing and manufacturing microprocessors will be considered a(n)_____ resource in the VRIO framework.

A) valuable
B) inexhaustible
C) tangible
D) perishable

Question 40

EasyOpen Inc.gained a patent for an electronic corkscrew.Soon the company made a huge profit on this device.Recently,however,other firms have produced electronic corkscrews.As a result,EasyOpen lost its competitive advantage.Which of the following would most likely be the reason for this development?

A) EasyOpen failed to renew the patent after 10 years.
B) EasyOpen's patent expired after 20 years.
C) EasyOpen failed to copyright the corkscrew.
D) EasyOpen's copyright expired after 30 years.

Question 41

Due to path dependence

A) strategic decisions have long-term consequences.
B) the occurrence of time compression diseconomies becomes rare.
C) competitors can easily imitate or create core competencies quickly.
D) past decisions of a firm do not affect its current situation.

Question 42

Which of the following best explains why IBM has been able to maintain its competitive advantage?

A) IBM successfully transformed itself multiple times in the data information industry over a period of more than 100 years.
B) IBM hired a new CEO to refocus the company on satisfying market needs, which demanded IT services.
C) IBM focused on producing mainframe and mini-computers that would be produced by fully integrated companies.
D) IBM helped kick-start the PC revolution in 1981 by setting an open standard in the computer industry with the introduction of the IBM PC.

Question 43

How does causal ambiguity act as an isolating mechanism for organizations?

A) It makes it difficult for the competitors to understand why a company has been so successful.
B) It creates a situation in which different social and business systems interact with one another.
C) It makes it difficult for competitors to deploy their resources by creating ambiguity within their organizational structures.
D) It makes it difficult for competitors to imitate core competencies quickly due to time compression diseconomies.

Question 44

Ambrosia Inc.,a leading chocolate producer,anticipated that the prices of cocoa beans would double in less than three years.This would disrupt the availability of cocoa in the industry.Thus,Ambrosia Inc.decided to purchase cocoa plantations in Ghana.As predicted,the prices of cocoa increased twofold.Because of the company-owned cocoa plantations,Ambrosia Inc.was able to sustain its competitive advantage in turbulent times.Which of the following isolating mechanisms does this scenario best illustrate?

A) social complexity
B) causal ambiguity
C) time compression diseconomies
D) better expectations of future resource value

Question 45

Which of the following is not a condition that can help a firm sustain its competitive advantage?

A) when managers have consistently better expectations about the future value of resources
B) when the resource advantage can only be imitated after a long period of time
C) when past decisions act as constraints for the current dynamic capabilities
D) when the source of the competitive advantage is causally ambiguous

Question 46

_____ are barriers to imitation that prevent rivals from competing away the advantage a firm may enjoy.

A) Embargoes
B) Cartel arrangements
C) Isolating mechanisms
D) Market niches

Question 47

Creating resources that meet the VRIO criteria is strategically important to a firm because it

A) helps the firm curb its resource heterogeneity and resource immobility.
B) facilitates greater knowledge diffusion in the industry.
C) leads to competitive parity within the industry.
D) helps the firm to gain and sustain a competitive advantage.

Question 48

_____ describes a process in which the options one faces in a current situation are limited by decisions made in the past.

A) Social complexity
B) Path dependence
C) Cannibalization
D) Causal ambiguity

Question 49

Path dependence rests on the notion that

A) time cannot be compressed at will.
B) strategic decisions are easily reversible.
C) rare resources can be built in a short period of time.
D) competitive advantage can be sustained indefinitely.

Question 50

VRD Systems Inc.took many decades to build its core competencies,and these competencies were based primarily on the decisions made by the company's top management in the past.This process is called

A) path dependence.
B) dependence complexity.
C) causal dependence.
D) path immobility.

Question 51

Competitors have found it extremely difficult to imitate Gene Electronics Inc.'s valuable resources,capabilities,or competencies.This is primarily because the source for the company's success has been unclear.The competitors are uncertain if Gene Electronics Inc.'s success is due to its strong leadership,the skills of its research and development team,or the timing of the company' s product introductions.Gene Electronics Inc.has been protected from losing its competitive advantage as a result of

A) time compression diseconomies.
B) resource homogeneity.
C) causal ambiguity.
D) path dependence.

Question 52

_____ describes a situation in which the cause and effect of a phenomenon are not readily apparent.

A) Resource immobility
B) Causal ambiguity
C) Resource heterogeneity
D) Social complexity

Question 53

Even though many valuable,rare,and inimitable resources were generated at Xerox's Palo Alto Research Center (PARC),the management at Xerox's headquarters failed to gain a competitive advantage by exploiting the breakthroughs in computing software and hardware.What is the most likely implication of this example?

A) It is advisable to outsource research and development functions.
B) Competitive advantage cannot be gained through unrelated diversification.
C) A firm must be effectively organized to capture value.
D) It is better to build competitive advantage on tangible assets rather than intangible assets.

Question 54

During market testing,Sensation Cosmetics (SC)realized that the cosmetics industry was dominated with multiple,well-established brands.These brands mostly sold their products in exclusive outlets and departmental stores.A new entrant like SC would require a different business model to be successful.Thus,SC started selling its products through direct marketing.In this scenario,Sensation Cosmetics accomplished substitution primarily through

A) path dependence.
B) technology transfer.
C) knowledge diffusion.
D) strategic equivalence.

Question 55

When the laptop market overtook the desktop market,Blue Tech Inc.,a leader in desktop technology,was left at a competitive disadvantage.Later,Blue Tech Inc.'s management channeled all of the company's efforts and revenue to develop an efficient laptop from scratch in less than a year.However,the company failed because most of its competitors had already been in the laptop market for five years.Blue Tech Inc.'s models were inferior to the ones in the market.In this scenario,Blue Tech Inc.'s failure can be best attributed to

A) causal ambiguity.
B) diseconomies of scope and scale.
C) time compression diseconomies.
D) social complexity.

Question 56

The share price of Groupon,a daily-deal website,fell by 90 percent just a year after its successful initial public offering.The firm was not able to sustain its competitive advantage because of the emergence of other daily-deal sites that were able to better serve the needs of local markets and specific population groups.Which of the following is the most accurate inference from this example?

A) Groupon's competency was not hard to imitate.
B) Groupon's competency was built more on an intangible resource than on a tangible one.
C) Groupon operated in an industry where the barriers to entry were high.
D) Groupon invested in resources that were invaluable and common.

Question 57

Mova Electronics,a leading pager manufacturer,recently declared itself bankrupt.This was attributed to a decision the company made in the past.While most of Mova's competitors were shifting their research focus toward cell phones,Mova invested most of its retained earnings on improvising its pagers.Once the pager market drastically declined,Mova Electronics was unable to capitalize on the new technology.Which of the following does this scenario best illustrate?

A) causal ambiguity
B) knowledge diffusion
C) social complexity
D) path dependence

Question 58

Value Autos Inc.has been trying to directly copy the strategies of Honk Autos Inc.Even though it is evident that Honk Autos Inc.'s success comes from its just-in-time inventory system,Value Autos Inc.has not been able to effectively apply the system in the same way.This is because the organizational structures,employees,cultures,and the overall business systems of both the companies vary from each other.Which of the following barriers to imitation does this scenario best illustrate?

A) path dependence
B) social complexity
C) resource mobility
D) resource homogeneity

Question 59

A firm's resources and capabilities are costly to imitate.This is because rival companies do not clearly understand the relationship between the resources and capabilities controlled by the firm.In this case,the firm's competitive advantage is protected against imitation by

A) path dependence.
B) dependence complexity.
C) causal ambiguity.
D) social complexity.

Question 60

Pulse Mobiles Inc.is a cell phone manufacturing company.Its latest range of smartphones bears a straight resemblance to the Y-series range of smartphones from Talkie Gen Inc.,in terms of its shape and look-and-feel.Which of the following strategies has Pulse Mobiles Inc.used to replicate the valuable and rare resource of Talkie Gen Inc.?

A) direct imitation
B) strategic equivalence
C) substitution
D) innovation

Question 61

Which of the following statements accurately describes a firm's resource stock?

A) Resource stocks are a firm's level of resources that are common to competitors.
B) Resource stocks are a firm's future estimate of both tangible and intangible resources.
C) Resource stocks are a firm's current level of intangible resources.
D) Resource stocks are a firm's level of investments to maintain or build a resource.

Question 62

A firm will fail to create a sustained competitive advantage when the

A) fit between its internal strengths and the external environment is static.
B) source of its competitive advantage is causally ambiguous.
C) source of its competitive advantage is socially complex.
D) resource bundles exhibit heterogeneity and immobility.

Question 63

In a generic value chain,a firm's after-sales service will be referred to as its _____.

A) primary activity
B) support activity
C) static resource
D) resource flow

Question 64

Which of the following statements fails to bring out the essence of the dynamic capabilities perspective?

A) A firm's competitive advantage is derived from static resource or market advantages.
B) A firm must be able to change its resource base as the external environment changes in order to sustain its competitive advantage.
C) A firm should modify its core competencies to effectively compete in dynamic markets.
D) A firm's external environment is rarely stable, and in many industries, change is fast and ferocious.

Question 65

GreenHarvest Inc.has used $350,000 from its total annual earnings of $1,250,000 to invest in the research and development of a multi-purpose vaccine.Its account receivable from customers is estimated to be $150,000 and accounts payable $80,000.In monetary terms,what would GreenHarvest Inc.'s resource flows be?

A) $1,250,000
B) $150,000
C) $80,000
D) $350,000

Question 66

Which of the following is an implication of high employee turnover in a company?

A) It results in a reduction in the company's intangible-resource stocks.
B) It makes the source of the company's competitive advantage causally ambiguous.
C) It makes the source of the company's competitive advantage socially complex.
D) It results in greater immobility and heterogeneity of the company's resources.

Question 67

Which of the following resources is a firm's resource stock?

A) cash in the bank
B) reputation for quality
C) land and building
D) plant and machinery

Question 68

According to the value chain analysis,which of the following is a primary activity?

A) research and development
B) human resources management
C) accounting and finance
D) marketing and sales

Question 69

Which of the following statements accurately describes a firm's resource flow?

A) It is the firm's level of investments to maintain or build a resource.
B) It is the firm's current level of intangible resources.
C) It is the firm's current level of tangible resources that are common to other firms.
D) It is the firm's level of expertise to efficiently deploy a valuable resource.

Question 70

Onyxo Inc.,a consumer electronics company,is the leading manufacturer of LCD televisions.LCD technology has been its core competency and the company holds 80 percent shares in that market.However,Onyxo Inc.'s competitors have now moved on to advance technologies like LED and 3-D televisions.According to the dynamic capabilities perspective,what should Onyxo Inc.do?

A) Onyxo Inc. should start working on LED and 3-D television technologies to adapt its core competency to suit the external environment.
B) Onyxo Inc. should stick to its existing core competency, that is LCD technology, as it is the best in that segment.
C) Onyxo Inc. should take proactive steps to reduce the causal ambiguity and socially complexity of its core competency.
D) Onyxo Inc. should work on enhancing the mobility of its core competency.

Question 71

Several senior managers recently left Bass Automobile Inc.and went to work at Unicorn Autos Inc.,a rival company.What does this imply?

A) The resource stock of Bass Automobiles Inc. increased.
B) Bass Automobiles Inc. faced resource leakage.
C) The resource flow into Unicorn Autos Inc. reduced.
D) Bass Automobiles Inc.'s tangible assets decreased.

Question 72

According to the _____,competitive advantage is the outflow of a firm's ability to modify and leverage its resource base in a way that enables it to gain and sustain competitive advantage in a constantly changing environment.

A) value chain perspective
B) two-factor theory
C) expectancy theory
D) dynamic capabilities perspective

Question 73

To help a firm achieve a competitive advantage,each distinct activity performed in the value chain needs to

A) contribute to the firm's strategic position as either low-cost leader or differentiator.
B) reduce the immobility and the heterogeneity of the firm's resources.
C) create a static fit between the company's internal resources and the external environment.
D) reduce the causal ambiguity and the social complexity of the firm's source of success.

Question 74

_____ describes a firm's ability to create,deploy,modify,reconfigure,upgrade,or leverage its resources over time in its quest for competitive advantage.

A) Dynamic capability
B) Resource immobility
C) Resource heterogeneity
D) Time compressed diseconomy

Question 75

It is difficult even for Apple's managers to pinpoint the underlying cause of the company's phenomenal success.The term that best applies to this difficulty is known as

A) competitive dependence.
B) resource mobility.
C) causal ambiguity.
D) path dependence.

Question 76

Given the accelerated pace of technological change,in combination with deregulation,globalization,and demographic shifts,a firm will only be successful today if its

A) competitive advantage is derived from static resource or market advantages.
B) resource advantage is not causally ambiguous or socially complex.
C) resource advantage is maintained for a short period of time.
D) internal strengths change with its external environment in a dynamic fashion.

Question 77

The value chain describes the

A) competitive challenges a firm faces in a highly dynamic external environment.
B) internal activities a firm engages in when transforming inputs into outputs.
C) current consequences a firm experiences due to its decisions in the past.
D) strategic advantages a firm experiences when its resources lack causal ambiguity.

Question 78

When evaluating the sustainability of a firm's competitive advantage,which of the following statements is not true?

A) The competitive advantage will not be sustainable if there are substitutes for the firm's core competence.
B) If managed effectively, existing core competencies can help sustain the competitive advantage indefinitely.
C) Social complexity often leads to a competitive advantage that is sustainable.
D) When expectations of future resource value turn out to be accurate and can be repeated, then a sustained competitive advantage is realized.

Question 79

Chat Zone Inc.,a telecommunication company,had been drastically losing its market share due to tough competition in the industry.The management hired a reputed consulting firm to advice the company.The experts from the consulting firm pointed out that the company primarily lost out on its competitive advantage due to its tedious internal policies and procedures.These ineffective policies and procedures made the company operations,marketing,and after-sales service inefficient.Chat Zone Inc.can best solve its problem by working on its

A) immobile assets.
B) support activities.
C) resource flows.
D) resource stocks.

Question 80

An observer may conclude that the organizational culture of Zappos,an online retailer for shoes and clothing,might be the basis for its competitive advantage.However,reverse social engineering to crack Zappos' code of success might be much more difficult for a company trying to exactly imitate its strategy.Thus,the source of Zappos competitive advantage is said to be

A) socially complex.
B) inexhaustible.
C) non-substitutable.
D) nonambiguous.