Chapter 3

Question 1

True or False. Innovation may be a vital path to efforts to develop sustainable competitive advantages

Answer 1

True

Question 2

________ are the foundation for strategy, and unique bundles of resources generate _______ that lead to wealth creation

Answer 2

1. Resources
2. Competitive advantages

Question 3

3 factors of sustainability of a competitive advantage (RAI)

Answer 3

1. The rate of core competence obsolescence because of environmental changes
2. The availability of substitutes for the core competence
3. The imitability of the core competence

Question 4

_____ and _____ are not inherently valuable, but they create value when the firm can use them to perform certain activities that result in a competitive advantage

Answer 4

Resources and capabilities

Question 5

True or False. Traditional factors such as labor costs, access to financial resources and raw materials, and protected or regulated markets remain sources of competitive advantage to a higher degree

Answer 5

False. Traditional factors such as labor costs, access to financial resources and raw materials, and protected or regulated markets remain sources of competitive advantage, but to a lesser degree

Question 6

It is the ability to study an internal organization in ways that are not dependent on the assumptions of a single country, culture, or context.

Answer 6

global mindset

Question 7

It is measured by a product’s performance characteristics and its
attributes for which customers are willing to pay

Answer 7

value

Question 8

Firms create value by innovatively bundling and leveraging their ____ and _____

Answer 8

resources and capabilities

Question 9

creating _____for customers is the source of above-average returns for
a firm

Answer 9

value

Question 10

It is the firm’s most important sources of competitive advantage

Answer 10

core competencies

Question 11

The _____of a firm, in addition to the results of analyses of its _____, ______, and _____ should drive its selection of strategies. The ______ held by the firm and their context are important when formulating a strategy

Answer 11

1. core competencies
2. general, industry, and competitor
   environments
3. resources

Question 12

3 conditions of difficult managerial decisions concerning resources, capabilities, and core competencies (ICU)

Answer 12

1. uncertainty
2. complexity
3. intraorganizational conflict

Question 13

It is the capability of making successful decisions when no obviously correct model or rule is available or when relevant data are unreliable or incomplete

Answer 13

judgment

Question 14

conditions of _____ is regarding characteristics of the general and the industry environments, competitors’ actions, and customers’ preferences

Answer 14

uncertainty

Question 15

condition of _______ regarding the interrelated causes shaping a firm’s environments and perceptions of the environments

Answer 15

complexity

Question 16

condition of _____ among people making managerial decisions and those affected by them

Answer 16

intraorganizational conflict

Question 17

____, ______, and ______ are the foundation of competitive advantage

Answer 17

resources, capabilities, and core competencies

Question 18

______ are bundled to create organizational_______. In turn, capabilities are the source of a firm’s _________, which are the basis of competitive advantages

Answer 18

1. resources
2. capabilities
3. core competencies

Question 19

True or False. Resources alone yield a competitive advantage.

Answer 19

False. Resources alone do not yield a competitive advantage.

Question 20

True or False. Competitive advantage is generally based on the unique bundling of several resources

Answer 20

True

Question 21

They are assets that can be seen and quantified. Production equipment, manufacturing facilities, distribution centers and formal reporting structures are examples of tangible resources

Answer 21

tangible assets

Question 22

They are assets that are rooted deeply in the firm’s history and have accumulated over time

Answer 22

intangible assets

Question 23

4 types of tangible resources (FOPT)

Answer 23

1. financial
2. organizational
3. physical
4. technological

Question 24

It is a tangible resource that refers to the firm’s ability to generate internal funds and borrowing capacity

Answer 24

financial resources

Question 25

It is a tangible resource that refers to the firm’s formal reporting structure and its formal planning, controlling, and coordinating systems

Answer 25

organizational resources

Question 26

It is a tangible resource that refers to the sophistication and location of a firm’s plant and equipment, as well as the access to raw materials

Answer 26

physical resources

Question 27

It is a tangible resource that refers to the stock of technology, such as patents, trademarks, copyrights, and trade secrets

Answer 27

technological resources

Question 28

It is an intangible resource that refers to the knowledge, trust, managerial capabilities, and organizational routines

Answer 28

human resources

Question 29

It is an intangible resource that refers to the ideas, scientific capabilities, and capacity to innovate

Answer 29

innovation resources

Question 30

It is an intangible resource that refers to the reputation with customers, brand name, perceptions of product quality, durability, and reliability, and reputation with suppliers, for efficient, effective, supportive, and mutually beneficial interactions and relationships

Answer 30

reputational resources

Question 31

_______ resources are a superior source of core competencies

Answer 31

intangible resources

Question 32

True or False. Tangible resources can be leveraged while intangible resources cannot be leveraged.

Answer 32

False. Tangible resources cannot be leveraged while intangible resources can be leveraged.

Question 33

It exists when resources have been purposely integrated to achieve a specific task or set of tasks.

Answer 33

capabilities

Question 34

________ are capabilities that serve as a source of competitive advantage for a firm over its rivals

Answer 34

core competencies

Question 35

It is referred to as the crown jewels of a company

Answer 35

core competencies

Question 36

What are the two tools help firms identify and build their core competencies

Answer 36

1. four specific criteria for sustainable competitive advantage 2. value chain analysis.

Question 37

capabilities that are _____, ______, ______, and _____ are core competencies

Answer 37

Valuable Rare Costly to imitate Nonsubstitutable

Question 38

For a _____ to be a core competence, it must be _____ and ____ from a customer’s point of view. For a ______ to be sustainable, the core competence must be _____, and ______from a competitor’s point of view

Answer 38

1. capability 2. valuable and unique 3. competitive advantage 4. inimitable and nonsubstitutable

Question 39

True or False. A sustained competitive advantage is achieved only when competitors cannot duplicate the benefits of a firm’s strategy or when they lack the resources to attempt imitation

Answer 39

True

Question 40

It allows the firm to exploit opportunities or neutralize threats in its external environment.

Answer 40

valuable capabilities

Question 41

They are capabilities that few, if any, competitors possess.

Answer 41

rare capabilities

Question 42

They are capabilities that other firms cannot easily develop.

Answer 42

costly-to-imitate

Question 43

Reasons why capabilities can be costly to imitate (USC)

Answer 43

1. unique historical conditions 2. the link between the firm’s capabilities and its competitive advantage is causally ambiguous 3. social complexity

Question 44

They are capabilities that do not have strategic equivalents

Answer 44

nonsubstitutable capabilities

Question 45

True or False. The strategic value of capabilities increases as they become easier to substitute

Answer 45

False. The strategic value of capabilities increases as they become more difficult to substitute

Question 46

It allows the firm to understand the parts of its operations that create value and those that do not

Answer 46

value chain analysis

Question 47

It is a template that firms use to understand their cost position and to identify the multiple means that might be used to facilitate the implementation of a chosen business-level strategy

Answer 47

value chain

Question 48

They are involved with a product’s physical creation, its sale and distribution to buyers, and its service after the sale.

Answer 48

primary activities

Question 49

It provides the assistance necessary for the primary activities to take place.

Answer 49

support activities

Question 50

It is the purchase of a value-creating activity from an external supplier

Answer 50

outsourcing

Question 51

In internal analysis, firms must identify their _____, and ______ in resources, capabilities, and core competencies

Answer 51

strengths and weaknesses

Question 52

It is an evaluation tool used by an organization to assess its internal environment.

Answer 52

internal analysis