SM_L4

Question 1

Define Value Creation and Value Capture in the context of a business model.

Answer 1

• Value Creation: The benefit a company delivers to customers by solving a particular problem they face.
• Value Capture: The portion of that benefit the company retains through price, licence, or promotion mechanisms.

Question 2

List the three strategic levers of Value Creation.

Answer 2

• Differentiation
• Cost
• Focus

Question 3

Give two examples of Value Capture tactics used by a traditional carmaker such as Toyota.

Answer 3

• Earning a profit margin on each sale, i.e., P − C.
• Generating additional value through leasing operations and spare‑parts sales.

Question 4

How does Booking.com create value for property owners?

Answer 4

• Provides pricing strategy insights and demand forecasts.
• Grants access to one of the world’s largest online travel markets.
• Helps reduce inventories of perishable or under‑utilised assets.

Question 5

State two primary ways Booking.com captures value from its platform.

Answer 5

• Charging commissions / revenue shares on bookings.
• Selling advertising and data‑targeting services.

Question 6

What kinds of data does Booking.com capture from its ecosystem?

Answer 6

• Clickstreams, purchases, locations, reviews from guests.
• Property details, destinations, country‑level travel data from hosts.

Question 7

Explain the concept of multihoming.

Answer 7

• When users adopt multiple platforms simultaneously, reducing platform exclusivity.

Question 8

Distinguish disintermediation from network bridging.

Answer 8

• Disintermediation: Network participants bypass a platform to connect directly.
• Network Bridging: One platform links two separate networks to leverage the combined user base and data.

Question 9

Summarise the key differences between a Porterian and a Resource‑Based view of strategy.

Answer 9

• Porterian view: Focus on exogenous industry factors and ends‑driven deductive reasoning.
• Resource‑Based view: Focus on endogenous firm resources and means‑driven inductive reasoning.

Question 10

Define resource heterogeneity and resource immobility.

Answer 10

• Heterogeneity: Firms possess different bundles of productive resources.
• Immobility: Certain resources are costly to copy or inelastic in supply.

Question 11

Give three examples of tangible resources.

Answer 11

• Capital
• Land / Buildings
• Plant & Equipment

Question 12

Give three examples of intangible resources.

Answer 12

• Brand equity
• Culture & routines
• Intellectual property (patents, copyrights, trade secrets)

Question 13

Which four characteristics make a resource a potential source of sustained competitive advantage?

Answer 13

• Valuable
• Rare
• Difficult to imitate
• Without substitutes

Question 14

List the four competitive outcomes linked to resource characteristics.

Answer 14

• Competitive disadvantage
• Competitive parity
• Temporary advantage
• Sustained advantage

Question 15

Identify four common sources of imperfect imitability.

Answer 15

• Unique historical conditions
• Causal ambiguity
• Social complexity
• Intellectual property protection

Question 16

What is a resource‑position barrier?

Answer 16

• A firm‑specific resource condition that raises costs or lowers revenues for rivals attempting to acquire the same resource at a later date.

Question 17

Differentiate versatile and specialised resources.

Answer 17

• Versatile resources: Applicable across a broad range of markets.
• Specialised resources: Useful in a narrow range of contexts.

Question 18

Provide three examples of resources that can act as resource‑position barriers.

Answer 18

• Machine capacity
• Customer loyalty
• Accumulated production experience

Question 19

Define value innovation.

Answer 19

• Creating new buyer value that can either reshape an existing market or open an entirely new one, making prior competition irrelevant.

Question 20

Outline the steps in analysing a firm’s resources and capabilities.

Answer 20

• Identify resources & capabilities.
• Link resources to capabilities.
• Appraise them for strategic importance.
• Develop strategy implications.

Question 21

In the bargaining model of competitive heterogeneity, what three monetary elements explain buyer surplus and supplier profit?

Answer 21

• Value (<strong>V</strong>)
• Price (<strong>P</strong>)
• Cost (<strong>C</strong>)

Examples: V₁−P₁ (buyer surplus) and P₁−C₁ (supplier profit).

Question 22

State three learning objectives of the Resource‑Based View session.

Answer 22

• Understand the firm as a bundle of resources.
• Learn how resource heterogeneity & imperfect imitability create advantage.
• Grasp the dynamics of value innovation.

Question 23

What is asset‑stock accumulation?

Answer 23

• The process by which firms build up resource stocks over time, influencing future performance.