Question 1

Accounting, human resources, and research and development (R&D) are examples of primary activities that add value directly to the value chain.

Accepted Answer

A) True 
 B)False  False

Question 2

O'Ryan Plastics maintains a manufacturing plant overseas. The local government has just been overthrown by a military group that opposes foreign influence in the country. According to the SWOT analysis, the political situation in this location is considered to be an

Accepted Answer

A)   external opportunity.
B)   external threat.
C)   internal strength.
D)   internal weakness. B

Question 3

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

Accepted Answer

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

Question 4

Leading guitar string producer Wound Up Inc. has enjoyed a competitive advantage based on its proprietary coating that gives its strings a clearer sound and longer lifespan than uncoated strings. One of Wound Up's competitors, however, has recently developed a similar coating using less expensive ingredients, which allows it to charge a lower price than Wound Up for similar-quality strings. Wound Up's competitive advantage is in danger due to

Accepted Answer

A)   a lack of perceived value.
B)   a lack of organization.
C)   direct imitation and substitution.
D)   resource immobility.

Question 5

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

Accepted Answer

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

Question 6

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

Accepted Answer

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 7

Elaborate on the resource-based view of competitive advantage.

Accepted Answer

The answer of Elaborate on the resource-based view of competitive...

Question 8

Your company, a small software development firm, has attracted many of the top young programmers in your area. As a result, the apps you produce have been praised for their innovative features and intuitive user experience. According to the bathtub metaphor in the dynamic capabilities perspective, what is the best way for you to protect against resource leakage?

Accepted Answer

A)   Invest in an online marketing campaign for existing products to retain customers.
B)   Open a satellite office overseas to support the company culture of taking chances.
C)   Attempt to undercut the competition by imitating their top-selling product.
D)   Improve the benefits package to retain key employees and reduce turnover.

Question 9

Explain how the activities of a firm help in achieving a competitive advantage.

Accepted Answer

The answer of Explain how the activities of a firm...

Question 10

Elaborate on time compression diseconomies.

Accepted Answer

The answer of Elaborate on time compression diseconomies....

Question 11

You are the manager of Impromptu Printing, a leading print shop. Impromptu's resources include a highly experienced staff and state-of-the-art printing presses. However, your closest competition has started to cut into your market share by offering same-day turnaround on most orders. Although your staffing and equipment is not optimized for rapid production, you decide to start offering a same-day guarantee to your customers. According to the resource-based view, what is wrong with this decision?

Accepted Answer

A)   You have failed to take into account resource immobility.
B)   Customers tend to have negative opinions of firms that imitate other firms.
C)   Employees are often resistant to changes in strategy.
D)   Your business is not organized to capture value.

Question 12

Superlative Productions spent 10 million dollars to buy the rights to a best-selling novel. The company then prepared for production by hiring a screenwriter to adapt the novel, casting the main roles, renting cameras and other equipment, and scouting locations in southern Arizona. Which of the following pairs of resources are both intangible?

Accepted Answer

A)   money spent to buy rights to the novel; screenwriter's experience adapting novels
B)   money spent to buy rights to the novel; locations in southern Arizona
C)   best-selling novel; locations in southern Arizona
D)   best-selling novel; screenwriter's experience adapting novels

Question 13

Which of the following provides an example of how a firm's valuable resource can be imitated?

Accepted Answer

A)   To compete with Build Your Own's model of the Eiffel Tower, Best Replica came out with a model of a generic medieval cathedral.
B)   To compete with Build Your Own's model of the Eiffel Tower, Best Replica came out with a model of the Leaning Tower of Pisa.
C)   To compete with Build Your Own's model of the Eiffel Tower, Best Replica came out with a model of the U.S.S. Enterprise aircraft carrier.
D)   To compete with Build Your Own's model of the Eiffel Tower, Best Replica came out with a model of a castle from a fantasy movie.

Question 14

After conducting a SWOT analysis, your firm has decided to focus on addressing issues located in the Weaknesses-Opportunities quadrant. Which of the following steps are you most likely to take?

Accepted Answer

A)   Devote more resources to an extremely popular advertising campaign to promote an exciting new product.
B)   Shut down struggling retail outlets in an economically depressed region.
C)   Deploy top sales personnel to prevent buyers from migrating towards lower-priced competition.
D)   Reorganize the inefficient research and development department to bring innovative products to market more quickly.

Question 15

Which of the following applies to the Strength-Threats quadrant of the SWOT matrix?

Accepted Answer

A)   The local fast-food chain Easy Hot Dogs expanded its limited menu to maintain its advantage against stiff competition.
B)   The local fast-food chain Easy Hot Dogs added a salad bar to maintain its competitive advantage against stiff competition.
C)   The local fast-food chain Easy Hot Dogs used its wholesome image to maintain its competitive advantage against stiff competition.
D)   The local fast-food chain Easy Hot Dogs revised its image of being a cheap-food place to being a wholesome family place to maintain its competitive advantage against stiff competition.

Question 16

In the context of the SWOT matrix, which of the following best exemplifies a firm's internal strength?

Accepted Answer

A)   increase in a firm's customer loyalty
B)   growth in the size of the market in which a firm operates
C)   rise in the income of the demographic segment to which a firm caters
D)   loss of a competitor's reputation

Question 17

In the context of the VRIO Framework, what does a valuable resource mean?

Accepted Answer

The answer of In the context of the VRIO Framework,...

Question 18

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. lags behind. In this scenario, which of the following critical assumptions of the resource-based view of a firm has been illustrated?

Accepted Answer

A)   resource value
B)   resource heterogeneity
C)   resource immobility
D)   resource imitation

Question 19

Provide examples of the primary activities in a firm's value chain.

Accepted Answer

The answer of Provide examples of the primary activities in...

Question 20

Trendline Architects' core competency is building multi-family housing in urban areas. This competency is based primarily on the decisions made by the company's top management over several years to focus on building in densely populated cities. This process is called

Accepted Answer

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

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