Question 1

People are a critical resource for helping organizations learn how to continuously innovate.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

____ is an example of a capability that is based in the functional area of distribution.

Accepted Answer

A)  Effective use of logistics management techniques 
B)  Effective control of inventories through point-of-purchase data collection 
C)  Effective organizational structure 
D)  Product and design quality

Question 4

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 5

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 6

Core competencies are the activities a company performs especially well compared with competitors and through which the firm adds unique value to its goods and services.

Accepted Answer

A) True 
 B)False

Question 7

The essential purpose of the value chain is to create additional value without incurring significant costs while doing so and to capture the value that has been created.

Accepted Answer

A) True 
 B)False

Question 8

Case Scenario : Heartsong LLC.
Heartsong LLC is a designer and manufacturer of replacement heart valves based in Peoria, Illinois. While a relatively small company in the medical devices field, it has established a worldwide reputation as the provider of choice high-quality, leading-edge artificial heart valves. Most of its products are sold to large regional hospital systems and research hospitals. Specialty heart centers are another emerging, but fast-growing, market for its valves. While Heartsong would like to grow quickly, its growth is constrained by the need to finance larger production runs and then carry this additional inventory. For products like those of Heartsong, vendors typically do not collect payment until the unit is actually used in surgery. Moreover, heart valves are usually required on short notice which means that they must be either onsite, or inventoried at a nearby location. If nearby, then transport of the unit to a hospital or heart center occurs within a matter of hours, and sometimes minutes. For this reason, accelerated growth would require Heartsong to both finance increased production of its heart valves, along with carrying increased levels of inventory that are in fact sitting on their customers' shelves. In fact, inventory-carrying cost is its single largest cost outside of research and development. While profitable growth is necessary if Heartsong is to continue extending its competitive advantage through increasingly greater investments in basic heart valve R&D, it is not clear that the company can internally support all these increased financial commitments (R&D, manufacturing, and inventory). Doc Watson, the CEO of Heartsong, is considering an outside contractor, EdFex, to handle the inventorying, warehousing, and delivery of its valves. EdFex has secure, high-tech warehouses in most major population centers around the country, and can ensure delivery of a product to these markets from its warehouses in less than one hour.
-(Refer to the above Case Scenario) What value-chain activities appear to underlie Heartsong's competitive advantage?

Accepted Answer

The answer of Case Scenario : Heartsong LLC.
Heartsong LLC is...

Question 9

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 10

Ultimately, the cause of all core capabilities becoming core rigidities is

Accepted Answer

A)  changes in the external and internal environment. 
B)  inertia and employee resistance to change. 
C)  strategic myopia and managerial inflexibility. 
D)  failure to accurately analyze the value chain.

Question 11

Analysis of the firm's internal organization examines the firm's portfolio of resources but excludes the bundles of heterogeneous resources and capabilities.

Accepted Answer

A) True 
 B)False

Question 12

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 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 13

To provide a sustainable competitive advantage, a capability must satisfy all of the following criteria EXCEPT

Accepted Answer

A)  be technologically innovative. 
B)  be hard for competing firms to duplicate. 
C)  be without good substitutes. 
D)  be valuable to customers.

Question 14

One reason executive judgment can be a particularly important source of competitive advantage is that judgment

Accepted Answer

A)  allows a firm to build a strong reputation. 
B)  gains the loyalty of shareholders. 
C)  increases human intellectual capacity. 
D)  allows for superior bundling of resources.

Question 15

At the conclusion of the internal analysis, firms must identify their strengths and weaknesses in resources, capabilities, and core competencies.

Accepted Answer

A) True 
 B)False

Question 16

The Internet has changed many aspects of the value chain for a broad range of firms.

Accepted Answer

A) True 
 B)False

Question 17

As discussed in the Strategic Focus, GE's executive leadership program helped managers develop capabilities to deal with all of the following EXCEPT

Accepted Answer

A)  uncertainty. 
B)  complexity. 
C)  powerful buyers. 
D)  intraorganizational conflict.

Question 18

The Strategic Focus on Ryanair noted that for years it was the only airline able to

Accepted Answer

A)  operate without hidden charges. 
B)  win awards for customer service two years in a row. 
C)  imitate Southwest's low-cost strategy. 
D)  successfully train its staff to be friendly to customers.

Question 19

The most numerous of the following organizational characteristics are

Accepted Answer

A)  resources. 
B)  capacities. 
C)  capabilities. 
D)  core competencies.

Question 20

According to the Opening case, Apple's strong financial performance in poor economic times is largely credited to its ____________.

Accepted Answer

A)  financial resources. 
B)  innovation capabilities. 
C)  attractive external environment. 
D)  brand name.

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

People are a critical resource for helping organizations learn how to continuously innovate.

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

____ is an example of a capability that is based in the functional area of distribution.

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

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.

Core competencies are the activities a company performs especially well compared with competitors and through which the firm adds unique value to its goods and services.

The essential purpose of the value chain is to create additional value without incurring significant costs while doing so and to capture the value that has been created.

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

Ultimately, the cause of all core capabilities becoming core rigidities is

Analysis of the firm's internal organization examines the firm's portfolio of resources but excludes the bundles of heterogeneous resources and capabilities.

Value chain analysis is a tool used to

To provide a sustainable competitive advantage, a capability must satisfy all of the following criteria EXCEPT

One reason executive judgment can be a particularly important source of competitive advantage is that judgment

At the conclusion of the internal analysis, firms must identify their strengths and weaknesses in resources, capabilities, and core competencies.

The Internet has changed many aspects of the value chain for a broad range of firms.

As discussed in the Strategic Focus, GE's executive leadership program helped managers develop capabilities to deal with all of the following EXCEPT

The Strategic Focus on Ryanair noted that for years it was the only airline able to

The most numerous of the following organizational characteristics are

According to the Opening case, Apple's strong financial performance in poor economic times is largely credited to its ____________.