Question 1

Only capabilities that are valuable, common, costly to imitate, and substitutable can be strategic capabilities.

Accepted Answer

A) True 
 B)False

Question 2

A local restaurant, Farm Fresh Ingredients, has become highly successful through its menu based solely on organically-raised chicken, beef, and organic seasonal produce. It has opened new locations in other cities, and these new locations are becoming highly profitable. Farm Fresh can expect that, at best, its competitive advantage will be

Accepted Answer

A)  permanent. 
B)  sustainable. 
C)  temporary. 
D)  defensible.

Question 3

Resources are the source of capabilities, some of which lead to the development of core competencies; in turn, some core competencies may lead to competitive advantage.

Accepted Answer

A) True 
 B)False

Question 4

From a customer's point of view, for an organization's capability to be a core competence it must be

Accepted Answer

A)  inimitable and unique. 
B)  valuable and unique. 
C)  inimitable and nonsubstitutable. 
D)  valuable and nonsubstitutable.

Question 5

Tangible resources include

Accepted Answer

A)  assets that are people-dependent such as know-how. 
B)  assets that can be observed and quantified. 
C)  organizational culture. 
D)  a firm's reputation.

Question 6

The key to achieving competitiveness, earning above-average returns, and remaining ahead of competitors in the long run is to manage current core competencies

Accepted Answer

A)  in a way that uniquely bundles and leverages the firm's existing resources. 
B)  while simultaneously developing new ones. 
C)  and imitate the core competencies of successful competitors. 
D)  in order to preserve and enhance them against the firm's competitors.

Question 7

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.

Accepted Answer

The answer of Describe the four specific criteria that managers...

Question 8

When firms lay off employees they are

Accepted Answer

A)  treating employees as an intangible resource. 
B)  recognizing the reduced value of labor in the value chain. 
C)  eroding the organization's knowledge resources. 
D)  temporarily sacrificing a tangible asset that is easily replace.

Question 9

The Chapter 3 Strategic Focus illustrates the challenge facing strategic managers in making decisions about the appropriate use of their companies' resources and capabilities. While a number of firms have successfully used resources and capabilities to earn above average returns, others have not been so successful.

Accepted Answer

A) True 
 B)False

Question 10

McDonald's culture with an emphasis on cleanliness, consistency, service, and the training that reinforces the value of these characteristics illustrates which of the following criteria for sustainable competitive advantage?

Accepted Answer

A)  valuable. 
B)  rare. 
C)  costly to imitate. 
D)  nonsubstitutable.

Question 11

Capabilities that other firms cannot develop easily are classified as

Accepted Answer

A)  costly to imitate. 
B)  rare. 
C)  valuable. 
D)  nonsubstitutable.

Question 12

One criteria for a resource or capability to be a source of competitive advantage is that it allows the firm to perform a value-creating activity that competitors cannot perform.

Accepted Answer

A) True 
 B)False

Question 13

Firms should never outsource a primary activity because of the danger of the activity being imitated by rivals.

Accepted Answer

A) True 
 B)False

Question 14

A person who has made a successful decision when no obviously correct model or rule is available or when relevant data are unreliable or incomplete has exercised

Accepted Answer

A)  foresight. 
B)  judgment. 
C)  effective strategic thinking. 
D)  decisiveness.

Question 15

Capabilities may be costly to imitate if they have a unique and valuable organizational culture, and are causally ambiguous and socially complex.

Accepted Answer

A) True 
 B)False

Question 16

Value chain analysis is a tool used to

Accepted Answer

A)  analyze a firm's external environment for value-creating opportunities. 
B)  analyze a firm's value chain activities and support functions in isolation from its competitors' value chain. 
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 17

Value chain activities include all of the following EXCEPT

Accepted Answer

A)  Supply-Chain Management 
B)  Operations 
C)  Management Information Systems 
D)  Distribution

Question 18

Walmart uses core competencies such as information technology and distribution channels to create value for its customers through its "everyday low price."

Accepted Answer

A) True 
 B)False

Question 19

Judgment is the capacity for making a successful decision when

Accepted Answer

A)  there are multiple decision criteria. 
B)  no obviously correct model or rule is available. 
C)  cognitive biases create barriers to rationality. 
D)  there are contradictions between the firm's vision and its implemented strategy.

Question 20

Which of the following is not a component of internal analysis leading to competitive advantage?

Accepted Answer

A)  Tangible and intangible resources. 
B)  Analysis of supplier power. 
C)  Capabilities. 
D)  Core competencies.

Exam 3: The Internal Organization: Resources, Capabilities, Core Competencies, and Competitive Advantages

Only capabilities that are valuable, common, costly to imitate, and substitutable can be strategic capabilities.

Resources are the source of capabilities, some of which lead to the development of core competencies; in turn, some core competencies may lead to competitive advantage.

From a customer's point of view, for an organization's capability to be a core competence it must be

Tangible resources include

The key to achieving competitiveness, earning above-average returns, and remaining ahead of competitors in the long run is to manage current core competencies

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.

When firms lay off employees they are

McDonald's culture with an emphasis on cleanliness, consistency, service, and the training that reinforces the value of these characteristics illustrates which of the following criteria for sustainable competitive advantage?

Capabilities that other firms cannot develop easily are classified as

One criteria for a resource or capability to be a source of competitive advantage is that it allows the firm to perform a value-creating activity that competitors cannot perform.

Firms should never outsource a primary activity because of the danger of the activity being imitated by rivals.

A person who has made a successful decision when no obviously correct model or rule is available or when relevant data are unreliable or incomplete has exercised

Capabilities may be costly to imitate if they have a unique and valuable organizational culture, and are causally ambiguous and socially complex.

Value chain analysis is a tool used to

Value chain activities include all of the following EXCEPT

Walmart uses core competencies such as information technology and distribution channels to create value for its customers through its "everyday low price."

Judgment is the capacity for making a successful decision when

Which of the following is not a component of internal analysis leading to competitive advantage?