Internal Resources & Capabilities Test Bank Docx Chapter 4

Student name:__________

One of Apple’s core competencies is establishing and maintaining a digital ecosystem.
1. ______

true
false

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-02 Differentiate among a firm's core competencies, resources, capabilities, a
Topic : Understanding the Importance of a Company's Resources
Source : Chapter 04 Test Bank > TF Qu. 01 One of Apple’s core competencies is...

The core competencies of a firm are determined by the interplay of its tangible resources and intangible capabilities.
1. ______

true
false

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 1 Easy
Learning Objective : 04-02 Differentiate among a firm's core competencies, resources, capabilities, a
Topic : Understanding the Importance of a Company's Resources
Source : Chapter 04 Test Bank > TF Qu. 02 The core competencies of a firm are determin...

One of holding company Alphabet’s tangible resources is Google, its most prominent subsidiary.
1. ______

true
false

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-03 Compare and contrast tangible and intangible resources.
Topic : Resource-Based View
Source : Chapter 04 Test Bank > TF Qu. 03 One of holding company Alphabet’s...

According to the resource immobility assumption, resources tend to be “sticky” and don’t move easily from firm to firm.
1. ______

true
false

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : Resource-Based View
Source : Chapter 04 Test Bank > TF Qu. 04 According to the resource immobility assumption...

Intellectual property (IP) protections such as trademarks or patents are proven methods of establishing permanent barriers to imitation.
1. ______

true
false

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-06 Evaluate different conditions that allow a firm to sustain a competitive a
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > TF Qu. 05 Intellectual property (IP) protections such ...

A music distributor that decides to launch a proprietary music streaming service to respond to changes in music consumption trends exhibits dynamic capabilities.
1. ______

true
false

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-07 Outline how dynamic capabilities can help a firm sustain a competitive adv
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > TF Qu. 06 A music distributor that decides to launch a...

Amazon’s tendency to reinvest a large share of its profits into new services and capabilities exemplifies a low level of resource flows.
1. ______

true
false

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

true
false

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-08 Apply a value chain analysis to understand which of the firm's activities
Topic : Value Chain Analysis
Source : Chapter 04 Test Bank > TF Qu. 08 Accounting, human resources, and research an...

Dynamic strategic activity systems help a firm to maintain a competitive advantage for extended periods of time.
1. ______

true
false

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-09 Identify competitive advantage as residing in a network of distinct activi
Topic : Value Chain Analysis
Source : Chapter 04 Test Bank > TF Qu. 09 Dynamic strategic activity systems help a fi...

A SWOT analysis would provide a definitive answer as to whether a firm’s growing footprint in overseas markets is a strength or weakness.
1. ______

true
false

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-10 Conduct a SWOT analysis to generate insights from external and internal an
Topic : SWOT Analysis
Source : Chapter 04 Test Bank > TF Qu. 10 A SWOT analysis would provide a definitive a...

Support activities, according to the value chain, are the actions a firm takes to directly provide a product or service to the end user.
1. ______

true
false

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-08 Apply a value chain analysis to understand which of the firm's activities
Topic : Value Chain Analysis
Source : Chapter 04 Test Bank > TF Qu. 11 Support activities, according to the value c...

One key aspect of strategy is choosing not to do certain things at all.
1. ______

true
false

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 2 Medium
Learning Objective : 04-02 Differentiate among a firm's core competencies, resources, capabilities, a
Topic : Understanding the Importance of a Company's Resources
Source : Chapter 04 Test Bank > TF Qu. 12 One key aspect of strategy is choosing...

When performing internal analysis of firms, how would you answer the question, “Why do companies exist?”
1. ______

Companies exist because they create value for customers in ways that customers are unable to replicate on their own.

Companies exist because they provide a means of investment income for shareholders, who otherwise would be able to invest only in government securities.

Companies exist because they provide a tax base for government to draw upon in creating and maintaining public works projects.

Companies exist because they give college professors something to teach about.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-02 Differentiate among a firm's core competencies, resources, capabilities, a
Topic : Understanding the Importance of a Company's Resources
Source : Chapter 04 Test Bank > MC Qu. 13 When performing internal analysis of firms, ...

Capabilities are the________ and managerial skills necessary to orchestrate a diverse set of resources to deploy them strategically.
1. ______

financial

strategic

organizational

competitive

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 2 Medium
Learning Objective : 04-02 Differentiate among a firm's core competencies, resources, capabilities, a
Topic : Understanding the Importance of a Company's Resources
Source : Chapter 04 Test Bank > MC Qu. 14 Capabilities are the ________ and managerial...

________ allow(s) a firm to differentiate its products and services from those of its rivals, creating higher value for the customer or offering products and services of comparable value at lower cost.
1. ______

Core competencies

Strengths

A value chain

Competition

When a firm does not continually upgrade or improve core competencies, its competitors are likely to
1. ______

grow their company at any cost.

across the board.

develop equivalent or superior skills.

expand their product line.

According to the resource-based view, a firm’s competitive advantage often stems from its
1. ______

intangible resources.

tangible resources.

dynamic strengths.

external environment.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 2 Medium
Learning Objective : 04-03 Compare and contrast tangible and intangible resources.
Topic : The Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 17 According to the resource-based view, a firm...

A value chain analysis consists of systematically analyzing a firm’s key activities that for analysis purposes are categorized into two groups:
1. ______

primary activities and support activities.

products and service activities.

customers and suppliers.

profits and losses.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-08 Apply a value chain analysis to understand which of the firm's activities
Topic : Value Chain Analysis
Source : Chapter 04 Test Bank > MC Qu. 18 A value chain analysis consists of systematica...

Southwest Airlines (SWA) and Alaska Airlines (ASA) both compete in the same strategic group as low-cost, point-to-point airlines, but they draw upon different resource bundles. SWA’s employee productivity tends to be higher than ASA’s because the two companies differ in their human and organizational resources. This example best illustrates which of the following assumptions regarding the resource-based view?
1. ______

resource immobility

resource allocation

resource homogeneity

resource heterogeneity

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : The Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 19 Southwest Airlines (SWA) and Alaska Airlines...

Managing a supply chain, running the computer system, and providing customer support are examples of which of the following?
1. ______

marketing and sales

operations

activities

value chain

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-08 Apply a value chain analysis to understand which of the firm's activities
Topic : Value Chain Analysis
Source : Chapter 04 Test Bank > MC Qu. 20 Managing a supply chain, running the computer...

Firms that can employ and establish________ are more likely to protect their competitive advantage from being copied and/or eroding away.
1. ______

isolating mechanisms

key human capital

cash equivalents

a strong competitor response

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-06 Evaluate different conditions that allow a firm to sustain a competitive a
Topic : The Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 21 Firms that can employ and establish ________...

Business managers are often concerned that just one of their company’s activities will make or break their company’s competitive advantage. However, you know that
1. ______

their company’s success depends on an array of many key activities, not just one activity.

they are right; it is usually just one single activity that makes or breaks their competitive advantage.

it depends on the industry—sometimes this is true, sometimes it is not true.

they should worry more about their competitor’s activities than their own company’s activities.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-08 Apply a value chain analysis to understand which of the firm's activities
Topic : Value Chain Analysis
Source : Chapter 04 Test Bank > MC Qu. 22 Business managers are often concerned that j...

One of the reasons that Circuit City filed for bankruptcy was due to its inability to reinvest, hone, and upgrade its once-impressive resource base. Ultimately, Circuit City’s core competences became
1. ______

core rigidities.

value chain activities.

strategic resources.

costly to imitate.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : The Dynamic Capabilities Perspective
Source : Chapter 04 Test Bank > MC Qu. 23 One of the reasons that Circuit City filed f...

The________ suggest(s) that because the external environment changes, strategic leaders must choose their current and future investments carefully over time in order to best maintain their firm’s competitive advantage.
1. ______

dynamic capabilities perspective

VRIO framework

SWOT analysis framework

law of diminishing returns

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 3 Hard
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : The Dynamic Capabilities Perspective
Source : Chapter 04 Test Bank > MC Qu. 24 The ________ suggest(s) that beca...

When conducting a________ it’s best to examine both PESTEL and Porter’s five forces analyses because these tools focus on the external environment.
1. ______

SWOT analysis

value chain analysis

VRIO framework

resource-based analysis

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-10 Conduct a SWOT analysis to generate insights from external and internal an
Topic : Implications for Strategic Leaders
Source : Chapter 04 Test Bank > MC Qu. 25 When conducting a ________ it’...

Which of the following will most likely be considered as an airline’s core competency?
1. ______

the airline’s ability to navigate federal laws just like its competitors

the airline’s ability to partner at the same airports as its competitors

the airline’s ability to make its fleet more fuel efficient than its competitors

the airline’s ability to manufacture planes at a cost that is average in the industry

Crocs, inventor of the iconic plastic clog, was unable to sustain its competitive advantage over its rivals because its key strategic resource was
1. ______

overly sophisticated marketing.

not patented in a timely manner.

simple to imitate.

valuable in the eyes of the consumer.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 27 Crocs, inventor of the iconic plastic clog...

Suppose that several senior managers leave Home Depot and go to work at rival Lowe’s. What aspect of resource stocks and resource flows does this represent for Home Depot?
1. ______

dynamic capabilities

intangible resources

human capital

resource leakage

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-07 Outline how dynamic capabilities can help a firm sustain a competitive adv
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 28 Suppose that several senior managers...

CarTsar Inc. is a manufacturer of automobile parts, which it sells to retail auto supply stores. Its core competencies include superior design and engineering capabilities, as well as a highly integrated and efficient supply chain. To sustain its competitive advantage, CarTsar should first
1. ______

seek to replicate its nearest competitor’s competency in innovative marketing.

attempt to cut costs by replacing assembly line workers with robots.

upgrade its engineering department and improve its supply chain.

diversify its product offerings by developing parts for construction equipment.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 04-01 Explain why and how internal firm differences are the root of competitive
Topic : Understanding the Importance of a Company's Resources
Source : Chapter 04 Test Bank > MC Qu. 29 CarTsar Inc. is a manufacturer of automobile...

Five Guys has become successful in a highly competitive industry dominated by fast-food giants like McDonald’s and Burger King, as well as direct competitors claiming to be “better burger” joints such as Smashburger, Burgerfi, and Shake Shack. Which of the following statements accurately explains the main reason for the success of Five Guys?
1. ______

It created customized, made-to-order food using the highest-quality ingredients.

It created a perception that eating its products was cool.

It emphasized marketing over core competency.

It focused keeping prices as low as possible.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-01 Explain why and how internal firm differences are the root of competitive
Topic : Understanding the Importance of a Company's Resources
Source : Chapter 04 Test Bank > MC Qu. 30 Five Guys has become successful in...

Frozen Gold is a fast-growing chain of ice cream shops. It has developed an edge over its competitors by providing customers with a wide array of unique flavors and fostering a hip atmosphere in its stores. This advantage of Frozen Gold best exemplifies a
1. ______

markup.

resource flow.

capital gain.

core competency.

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-01 Explain why and how internal firm differences are the root of competitive
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 31 Frozen Gold is a fast-growing chain of...

Organizational and managerial skills that find their expression in a company’s structure, routines, and culture are referred to as
1. ______

tangible resources.

reserves.

capital gains.

capabilities.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 04-01 Explain why and how internal firm differences are the root of competitive
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 32 Organizational and managerial skills that fi...

Amazon’s network of distribution centers allows it to drastically reduce its delivery times compared with most other online retailers. These distribution centers are examples of Amazon’s
1. ______

core competency.

intangible resources.

tangible resources.

capabilities.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-03 Compare and contrast tangible and intangible resources.
Topic : Understanding the Importance of a Company's Resources
Source : Chapter 04 Test Bank > MC Qu. 33 Amazon’s network of distribution centers allow it...

The management of a company is assessing the value of all the tangible resources the company owns. Which of the following will be included in this assessment?
1. ______

its reputation for fast customer service

its culture of proactive communication

the patents for electronic components

the punch presses that produce parts

As the manager of a relatively new company assessing what could give your business a competitive advantage, you are analyzing company resources to identify core competencies. Which of the following resources is most likely to generate a competitive advantage?
1. ______

new production facilities

large cash holdings

stockpile of supplies

enthusiastic company culture

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 04-03 Compare and contrast tangible and intangible resources.
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 35 As the manager of a relatively new...

STRIKEBYTE is a software company that has created and acquired numerous assets over the years. According to the resource-based view of a firm, which of the following assets of STRIKEBYTE will best enable it to gain and sustain a competitive advantage?
1. ______

the cloud computing service that it uses

the capital the company raised from its shareholders

the expertise acquired by the employees in the company

the impressive headquarters owned by the company

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-03 Compare and contrast tangible and intangible resources.
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 36 STRIKEBYTE is a software company that...

Which of the following statements accurately brings out the difference between tangible and intangible resources?
1. ______

Tangible resources contribute to a company’s competitive advantage, whereas intangible resources have little effect on competitive advantage.

Tangible assets can be bought on the open market by anyone with the necessary cash, whereas intangible assets cannot be easily purchased.

Tangible resources take a longer time to build, whereas intangible assets can be built comparatively easily.

Tangible assets are difficult for competitors to imitate, whereas intangible assets can be easily replicated.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-03 Compare and contrast tangible and intangible resources.
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 37 Which of the following statements accurately...

Shippity and ShipING are two competing firms in the same industry. Shippity’s tangible assets are valued at $15 billion and its intangible assets are valued at $35 billion. ShipING’s tangible assets are valued at $5 billion and its intangible assets are valued at $45 billion. What can be concluded from this information?
1. ______

ShipING will be less competitive than Shippity because of its smaller investment in tangible assets.

It is likely that ShipING is better enabled than Shippity to gain and sustain a competitive advantage.

Judging from the assets listed, ShipING has probably been in the industry a much shorter time than Shippity.

There is no resource heterogeneity between the two firms as they operate in the same industry.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Analyze
Difficulty : 3 Hard
Learning Objective : 04-03 Compare and contrast tangible and intangible resources.
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 38 Shippity and ShipING are two competing ...

OpenBook is a new online bookseller’s market that has raised capital from multiple sources. It is planning to use its capital to acquire certain assets. Which of the following assets will be the most difficult for OpenBook to acquire using its capital?
1. ______

labor

computer equipment

brand equity

physical headquarters

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 04-03 Compare and contrast tangible and intangible resources.
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 39 OpenBook is a new online bookseller’s...

Cartzy, Cartific, and Clustercart, are three consumer-product retailing companies. Their products consist primarily of day-to-day items that are easy to imitate and sell. All three companies use the same resources and capabilities in the production and distribution of their products. Judging from the market conditions described in this scenario, which of the following statements is true?
1. ______

Resource immobility of the firms will be low.

The industry structure will be far from perfect competition.

Barriers to entry within the industry will be high.

Any advantage that one firm has will be short-lived.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Analyze
Difficulty : 3 Hard
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : VRIO Framework
Source : Chapter 04 Test Bank > MC Qu. 40 Cartzy, Cartific, and Clustercart, are three...

Although eHook and eFury operate in the same consumer electronic industry, eHook has better sales and brand equity. This is attributed to eHook’s commitment to innovation. The company has adequate financial and human capital to invest in research and development, an area in which eFury lags behind. In this scenario, which of the following critical assumptions of the resource-based view of a firm has been illustrated?
1. ______

resource value

resource heterogeneity

resource immobility

resource imitation

Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 41 Although eHook and eFury operate in the...

Greener Cleener is a leading maker of environmentally friendly household cleaning products. Competitors across the globe have failed to imitate Greener Cleener’s production models, supply chain systems, knowledge systems, and culture. These attributes have remained unique to Greener Cleener for a long time. Which of the following assumptions of the resource-based model of competitive advantage does this scenario best illustrate?
1. ______

resource homogeneity

resource cost

resource substitution

resource immobility

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 42 Greener Cleener is a leading maker of environmentally...

In the context of the resource-based model of competitive advantage, if a successful firm exhibits resource immobility it means that the
1. ______

rival firms have better accessibility to quality resources, which they will be able to acquire and deploy to their benefit.

firm will have a sustained competitive advantage because of unique resources that are difficult for others to replicate.

competitors can easily replicate or copy the firm’s resource bundles and capabilities.

resources of the firm cannot be effectively deployed within its own organization.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 43 In the context of the resource-based model o...

Due to resource immobility, a critical assumption in the resource-based model of a firm, the
1. ______

competitive advantage of a firm exists for a short period of time.

resource bundles of a firm can be easily imitated by competitors.

resource differences between firms last for a long time.

competencies and capabilities of all firms in an industry are similar.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 44 Due to resource immobility, a critical assum...

In the context of the resource-based model of competitive advantage, which of the following scenarios best exemplifies resource immobility?
1. ______

Tuffy Gaskets Inc has earned a good reputation among its shareholders by investing heavily inup-to-date production equipment that increases productivity.

Havermill Communications has lost market share because it was slow to change to digital publishing.

Rev-Em Motorcycles has been able to gain a competitive advantage because of its ability to efficiently move its resources from one manufacturing unit to another.

Avenir Inc. has been able to outperform its competitors because its method of training cross-department teams is difficult for competitors to replicate.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 45 In the context of the resource-based model o...

How are the critical assumptions of the resource-based model of a firm fundamentally different from the way in which a firm is viewed in the perfectly competitive industry structure?
1. ______

In the resource-based model, resources are freely available and mobile, whereas in the perfectly competitive industry structure, resources are highly immobile.

In perfect competition, it is extremely difficult to replicate the resource bundles of a firm, whereas in the resource-based model, it is extremely easy to imitate them.

In perfect competition, all firms have access to the same capabilities, whereas in the resource-based model, resource differences exist between firms in the same industry.

In the resource-based model, only physical assets of a firm are considered as resources, whereas in perfect competition, a firm’s capabilities and competencies are also considered as resources.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 46 How are the critical assumptions of the reso...

The competitive advantage that one firm has will be short-lived in an industry in which
1. ______

resource immobility is high.

perfect competition exists.

resource heterogeneity is high.

capabilities of a firm are not easily replicable.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : VRIO Framework
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 47 The competitive advantage that one firm has ...

You are the manager of Value Printing, a leading print shop. Value’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?
1. ______

You have failed to take into account resource immobility.

Customers tend to have negative opinions of firms that imitate other firms.

Employees are often resistant to changes in strategy.

Your business is not organized to capture value.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 48 You are the manager of Value Printing, a lea...

NovaNote's competency in designing and manufacturing efficient, long-lasting batteries has made its tablets the fastest-growing brand of computers in the market. This competency, along with highly responsive tech support, has enabled NovaNote to increase its customer base and strengthen customer loyalty. Thus, NovaNote's competency in designing and manufacturing batteries will be considered a(n)________ resource in the VRIO framework.
1. ______

valuable

substitute

imitable

organized

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-05 Apply the VRIO framework to assess the competitive implications of a firm'
Topic : VRIO Framework
Source : Chapter 04 Test Bank > MC Qu. 49 NovaNote's competency in designing...

Viral Apparel is the market leader in the sportswear industry. Though most of its resources are common to those of its competitors, a few rare resources have helped the company gain and sustain a competitive advantage. Which of the following assets of Viral Apparel is most likely to be considered a rare resource that is contributing to its competitive advantage?
1. ______

the company’s land and buildings

the company’s plant and machinery

the company’s raw material supplies

the company’s design patents

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Analyze
Difficulty : 3 Hard
Learning Objective : 04-05 Apply the VRIO framework to assess the competitive implications of a firm'
Topic : VRIO Framework
Source : Chapter 04 Test Bank > MC Qu. 50 Viral Apparel is the market leader in the sp...

Facing stiff competition in the e-reader market, SmartReads wants to protect its competitive advantage by increasing the perceived value of its reader. SmartReads’s best strategy to accomplish this would be to
1. ______

increase the cost of production to add innovative new features.

highlight the number of celebrities who use SmartReads e-readers.

lower the retail price of its e-reader to attract new customers.

try to imitate some of the features found in competing products.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 04-05 Apply the VRIO framework to assess the competitive implications of a firm'
Topic : VRIO Framework
Source : Chapter 04 Test Bank > MC Qu. 51 Facing stiff competition in the e-reader mar...

Mejor Maíz tortilla chips, manufactured by Tampico Alimentos, have been the top-selling tortilla chips in the market. Though the market for chips is flooded with competitors, Tampico Alimentos has been able to maintain its market position for a long time. This is mainly attributed to the fact that its chips have all the flavor of competing brands but only half the fat, the result of a proprietary cooking method used by the company. This competency of Tampico Alimentos will be considered as a(n)________ resource in the VRIO framework.
1. ______

imitable

rare

intangible

organizational

Pharmacat Pharmaceuticals invested $3.4 billion dollars to develop a new drug for individuals with diabetes. After Pharmacat receives FDA approval of the drug, its marginal cost to produce the drug for market will be
1. ______

low.

high.

moderate.

unpredictable.

The diagonal assembly system was a production system pioneered by the automobile company Gogo. Recently, Gogo was able to sue a competitor and won the suit, receiving $100 million in damages. Which of the following would most likely enable Gogo to win such a lawsuit?
1. ______

The competitor ran advertising that criticized Gogo’s assembly system.

The competitor failed to apply for a patent of its own assembly system.

The competitor infringed on Gogo’s patent of the diagonal assembly system.

The competitor developed an assembly system that worked on a newer theory than Gogo’s system.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Analyze
Difficulty : 2 Medium
Learning Objective : 04-05 Apply the VRIO framework to assess the competitive implications of a firm'
Topic : VRIO Framework
Source : Chapter 04 Test Bank > MC Qu. 54 The diagonal assembly system was a production...

According to an evaluation using the VRIO framework, Crocs, inventor of the iconic plastic clog, was unable to sustain its competitive advantage primarily because its products were
1. ______

invaluable and common.

easy to imitate.

extremely rare.

non-substitutable.

TechTime is a market leader in smartwatches. If Horloge and Tempo, companies that manufacture digital watches, develop the same customer knowledge base and create products with the same customer appeal as TechTime, then
1. ______

Horloge and Tempo will have a VRIO resource.

TechTime will have a resource that is valuable but no longer rare.

TechTime will have a sustainable competitive advantage in the industry.

TechTime will have a resource that is rare but no longer valuable.

Amelia has recently started a restaurant in a commercial area that already has many other established restaurants and popular fast-food chains. Amelia owns the building in which her restaurant is located, rather than leasing premises as her competitors do. This factor allows her to offer her products at a more competitive price. Amelia has also invested a huge amount in designing the restaurant’s interior and in equipping the kitchen with the appliances that are most widely used in her industry. In this scenario, which of the following is the most valuable resource for Amelia’s business?
1. ______

the investments made by Amelia on the restaurant’s interior

the type of kitchen equipment widely used in her industry

the restaurant’s late entry into the market

the building owned by Amelia, which reduces cost of operations

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 04-05 Apply the VRIO framework to assess the competitive implications of a firm'
Topic : VRIO Framework
Source : Chapter 04 Test Bank > MC Qu. 57 Amelia has recently started a restaurant in ...

LightningDrive is a leading automobile company. The company has been able to sustain its competitive advantage primarily due to its high-quality and efficient electric motors. Most of its competitors have failed to develop similar electric motors at a reasonable price. Which of the following resource attributes listed in the VRIO framework has helped LightningDrive sustain its competitive advantage?
1. ______

resource mobility

inexhaustible nature

intangibility of the company’s resource

high costs involved in imitation

During market testing, Rembrandt Cosmetics realized that the cosmetics industry was dominated by multiple, well-established brands. These brands mostly sold their products in exclusive outlets and department stores. Rembrandt Cosmetics management realized that a new entrant would require a different business model to be successful. Thus, Rembrandt Cosmetics started selling its products through direct marketing. In this scenario, Rembrandt Cosmetics accomplished substitution primarily through
1. ______

path dependence.

technology transfer.

knowledge diffusion.

strategic equivalence.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : VRIO Framework
Source : Chapter 04 Test Bank > MC Qu. 59 During market testing, Rembrandt Cosmetics r...

TalkaLot is a cell phone manufacturing company. Its latest range of smartphones are visually similar to the Y-series range of smartphones from Talkie Gen, in terms of shape, look, and feel. Which of the following strategies has TalkaLot used to replicate the valuable and rare resource of Talkie Gen?
1. ______

direct imitation

strategic equivalence

substitution

innovation

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

Embargoes

Cartel arrangements

Isolating mechanisms

Market niches

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 04-06 Evaluate different conditions that allow a firm to sustain a competitive a
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 61 ________ are barriers to imitation that prevent...

Chocolicious, a leading gourmet chocolate producer, anticipated that the prices of cocoa beans from Ghana, where its main suppliers were located, would double in less than three years. This would significantly affect Chocolicious’s profit margins. Thus, Chocolicious decided to develop a new partnership with a supplier in Colombia. As predicted, the price of Ghanaian cocoa beans increased twofold. Because the price of Colombian cocoa beans was much lower, Chocolicious was able to maintain its profit margins in turbulent times. Which of the following isolating mechanisms does this scenario best illustrate?
1. ______

intellectual property protection

causal ambiguity

time compression diseconomies

better expectations of future resource value

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-06 Evaluate different conditions that allow a firm to sustain a competitive a
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 62 Chocolicious, a leading gourmet chocolate...

Leading guitar string producer Highly Strung has enjoyed a competitive advantage based on its proprietary coating that gives its strings a clearer sound and longer life span than uncoated strings. One of Highly Strung’s competitors, however, has recently developed a similar coating using less expensive ingredients; this allows it to charge a lower price than Highly Strung for similar-quality strings. Highly Strung’s competitive advantage is in danger due to
1. ______

a lack of perceived value.

a lack of organization.

direct imitation and substitution.

resource immobility.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 04-06 Evaluate different conditions that allow a firm to sustain a competitive a
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 63 Leading guitar string producer Highly Strung...

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

Social complexity

Path dependence

Cannibalization

Causal ambiguity

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 04-06 Evaluate different conditions that allow a firm to sustain a competitive a
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 64 ________ describes a process in which the optio...

Chips & Motherboards, a leading hard drive manufacturer, recently filed for bankruptcy. While most of Chips & Motherboards’ competitors were shifting away from physical data storage devices toward online cloud storage services, Chips & Motherboards invested most of its retained earnings in the effort to improve its hard drives. Once the hard-drive market drastically declined, Chips & Motherboards was unable to capitalize on the new technology. Which of the following does this scenario best illustrate?
1. ______

causal ambiguity

knowledge diffusion

social complexity

path dependence

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-06 Evaluate different conditions that allow a firm to sustain a competitive a
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 65 Chips & Motherboards, a leading har...

The Marauders professional football team, which has a long history of emphasizing the run, has been doing poorly in the current quarterback-dominated league, so its sales of tickets and ancillary products such as jerseys have declined. Fan discontent finally caused the team's general manager to draft a highly rated quarterback in the first round of the draft. However, the team still lacked competent receivers, so the quarterback was unsuccessful at turning the team around. The general manager's decision to move to a pass-oriented offence was hampered by
1. ______

path dependence.

dependence complexity.

causal dependence.

path immobility.

Assume a firm’s resources and capabilities are costly to imitate. This is because rival companies do not clearly understand the relationship between the resources and capabilities controlled by the firm. In this case, the firm’s competitive advantage is protected against imitation by
1. ______

path dependence.

dependence complexity.

causal ambiguity.

social complexity.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-06 Evaluate different conditions that allow a firm to sustain a competitive a
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 67 Assume a firm’s resources and capabilities are costly...

When the laptop market overtook the desktop market, Blue Tech, a leader in desktop technology, was left at a competitive disadvantage. Later, Blue Tech’s management channeled all of the company’s efforts and revenue to develop an efficient laptop from scratch in less than a year. However, the company failed because Blue Tech’s models were inferior to the third- and fourth-generation models its competitors were selling. In this scenario, Blue Tech’s failure can be best attributed to
1. ______

causal ambiguity.

diseconomies of scope and scale.

time compression diseconomies.

social complexity.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Analyze
Difficulty : 3 Hard
Learning Objective : 04-06 Evaluate different conditions that allow a firm to sustain a competitive a
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 68 When the laptop market overtook the desktop ...

How does causal ambiguity act as an isolating mechanism for organizations?
1. ______

It makes it difficult for the competitors to understand why a company has been so successful.

It creates a situation in which different social and business systems interact with one another.

It makes it difficult for competitors to deploy their resources by creating ambiguity within their organizational structures.

It makes it difficult for competitors to imitate core competencies quickly due to time compression diseconomies.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-05 Apply the VRIO framework to assess the competitive implications of a firm'
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 69 How does causal ambiguity act as an isolatin...

Competitors have found it extremely difficult to imitate Gene Electronics’ valuable resources, capabilities, or competencies. This is primarily because the source for the company’s success has been unclear. The competitors are uncertain if Gene Electronics’ success is due to its strong leadership, the skills of its research and development team, or the timing of the company’s product introductions. Gene Electronics has been protected from losing its competitive advantage as a result of
1. ______

time compression diseconomies.

resource homogeneity.

causal ambiguity.

path dependence.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-06 Evaluate different conditions that allow a firm to sustain a competitive a
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 70 Competitors have found it extremely difficul...

Mama Mia’s’ Pizza & Calzone has been trying to directly copy the strategies of Fuhgeddaboudit Pies. Even though it is evident that the success of Fuhgeddaboudit Pies comes from the freshness and variety of ingredients it uses, Mama Mia’s has not been able to introduce the same types of produce into its recipes. This is because Fuhgeddaboudit’s network of relationships with local growers, as well as its efficient supply chain, are very difficult to emulate. Which of the following barriers to imitation does this scenario best illustrate?
1. ______

path dependence

social complexity

resource mobility

resource homogeneity

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-06 Evaluate different conditions that allow a firm to sustain a competitive a
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 71 Mama Mia’s’ Pizza & Calzone ...

An observer may conclude that the organizational culture of Zappos, an online retailer for shoes and clothing, might be the basis for its competitive advantage. However, reverse social engineering to crack Zappos’ code of success might be much more difficult for a company trying to exactly imitate its strategy. Thus, the source of Zappos’ competitive advantage is
1. ______

path dependence.

isolating mechanisms.

causal ambiguity.

social complexity.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-06 Evaluate different conditions that allow a firm to sustain a competitive a
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 72 An observer may conclude that the organizati...

The owners of Always Baked bakery want to open a second retail outlet. Which of the following scenarios is most likely to yield a competitive advantage?
1. ______

Open a shop on an inexpensive piece of land near a new mixed-use residential and business district currently under construction.

Purchase an existing bakery from a business that closed due to declining sales and try to revive it.

Build a shop in a sparsely populated rural area where the land is inexpensive and few other bakeries exist.

Open a shop in a crowded downtown location where several other bakeries have been successful over the years.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 04-06 Evaluate different conditions that allow a firm to sustain a competitive a
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 73 The owners of Always Baked bakery want to op...

A firm will fail to create a sustained competitive advantage when the
1. ______

fit between its internal strengths and the external environment is static.

source of its competitive advantage is causally ambiguous.

source of its competitive advantage is socially complex.

resource bundles exhibit heterogeneity and immobility.

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

competitive advantage is derived from static resource or market advantages.

resource advantage is not causally ambiguous or socially complex.

resource advantage is maintained for a short period of time.

internal strengths change with its external environment in a dynamic fashion.

ezTV, a consumer electronics company, is the leading manufacturer of high-definition (HD) LED televisions. HD technology has been its core competency and the company holds 60 percent shares in that market. However, ezTV’s competitors have now begun to produce more-advanced technologies like 4K Ultra HD and Internet-enabled Smart televisions. According to the dynamic capabilities perspective, what should ezTV do?
1. ______

ezTV should start working on Ultra HD and Smart television technologies to adapt its core competency to suit the external environment.

ezTV should stick to its existing core competency, that is HD LED technology, as it is the best in that segment.

ezTV should take steps to reduce the causal ambiguity and socially complexity of its core competency.

ezTV should work on enhancing the mobility of its core competency.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 04-07 Outline how dynamic capabilities can help a firm sustain a competitive adv
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 76 ezTV, a consumer electronics company, is the...

Which of the following statements accurately describes a firm’s resource stock?
1. ______

Resource stocks are a firm’s level of resources that are common to competitors.

Resource stocks are a firm’s future estimate of both tangible and intangible resources.

Resource stocks are a firm’s current level of intangible resources.

Resource stocks are a firm’s level of investments to maintain or build a resource.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 04-07 Outline how dynamic capabilities can help a firm sustain a competitive adv
Topic : Understanding the Importance of a Company's Resources
Source : Chapter 04 Test Bank > MC Qu. 77 Which of the following statements accurately...

Flectronics has used $700,000 from its total annual earnings of $1,650,000 to invest in upgrading its manufacturing facilities. Its accounts receivable from customers is estimated to be $130,000 and accounts payable $75,000. In monetary terms, what would Flectronics’s resource flows be?
1. ______

$1,650,000

$130,000

$75,000

$700,000

SJobs’s Computer Repair has maintained a competitive advantage based on its thorough and professional service, reasonable pricing, and money-back guarantee. Management at the company is so committed to doing repairs well that they often have rejected employee suggestions to expedite their processes. Recently, the company has begun to lose customers to a new local service offering same day in-home repairs and 24/7 online customer support. According to the dynamic capabilities perspective, SJobs’s Computer Repair has lost its competitive advantage due to
1. ______

value chain disruption.

core rigidity.

resource flows.

resource stocks.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 04-07 Outline how dynamic capabilities can help a firm sustain a competitive adv
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 79 SJobs’s Computer Repair has maintained...

Which of the following is an implication of high employee turnover in a company?
1. ______

It results in a reduction in the company’s intangible-resource stocks.

It makes the source of the company’s competitive advantage causally ambiguous.

It makes the source of the company’s competitive advantage socially complex.

It results in greater immobility and heterogeneity of the company’s resources.

Several senior managers recently left Fred’s Autos and went to work at Better Autos, a rival company. What does this imply?
1. ______

The resource stock of Fred’s Autos increased.

Fred’s Autos faced resource leakage.

The resource flow into Better Autos was reduced.

Fred’s Autos’ tangible assets decreased.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-07 Outline how dynamic capabilities can help a firm sustain a competitive adv
Topic : The Dynamic Capabilities Perspective
Source : Chapter 04 Test Bank > MC Qu. 81 Several senior managers recently left Fred...

According to the value chain analysis, which of the following is a primary activity?
1. ______

research and development

human resources management

accounting and finance

marketing and sales

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 04-08 Apply a value chain analysis to understand which of the firm's activities
Topic : Value Chain Analysis
Source : Chapter 04 Test Bank > MC Qu. 82 According to the value chain analysis, which...

Your company, a small software development firm, has attracted many 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?
1. ______

Invest in an online marketing campaign for existing products to retain customers.

Open a satellite office overseas to support the company culture of taking chances.

Attempt to undercut the competition by imitating their top-selling product.

Improve the benefits package to retain key employees and reduce turnover.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 04-07 Outline how dynamic capabilities can help a firm sustain a competitive adv
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 83 Your company, a small software development f...

Online retailer eBuy had been drastically losing market share to its competitors, so management hired a consulting firm to help figure out the reasons why sales were dipping. The consultants found that the company primarily lost its competitive advantage because of its poor customer service, which included slow response times to customer inquiries and unclear return policies. These ineffective policies and procedures led to many disgruntled customers and a steady migration to more customer-friendly retailers. eBuy can best solve its problem by working on its
1. ______

immobile assets.

support activities.

resource flows.

resource stocks.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-08 Apply a value chain analysis to understand which of the firm's activities
Topic : Value Chain Analysis
Source : Chapter 04 Test Bank > MC Qu. 84 Online retailer eBuy had been drastically...

To help a firm achieve a competitive advantage, each distinct activity performed in the value chain needs to
1. ______

contribute to the firm’s strategic position as either a low-cost leader or differentiator.

reduce the immobility and the heterogeneity of the firm’s resources.

create a static fit between the company’s internal resources and the external environment.

reduce the causal ambiguity and the social complexity of the firm’s source of success.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-08 Apply a value chain analysis to understand which of the firm's activities
Topic : Value Chain Analysis
Source : Chapter 04 Test Bank > MC Qu. 85 To help a firm achieve a competitive advanta...

Simply Furniture has seen its profit margins shrink over the past few years as increased competition has driven down furniture prices. You have been tasked with improving the company’s margins. Which of the following approaches makes the most sense within the context of strategic activity systems?
1. ______

Focus efforts on imitating competitors’ most successful products.

Boost spending on marketing.

Install modern manufacturing equipment to improve efficiency.

Go against current trends and raise prices.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 04-09 Identify competitive advantage as residing in a network of distinct activi
Topic : Value Chain Analysis
Source : Chapter 04 Test Bank > MC Qu. 86 Simply Furniture has seen its profit...

Juana, a manager at a multinational organization, is trying to carefully scan and link the firm’s internal environment to its external environment. The insights from this analysis will allow her to effectively leverage the company’s internal strengths to exploit external opportunities, while mitigating internal weaknesses and external threats. In this scenario, which of the following managerial tools is Juana employing?
1. ______

Blake Mouton managerial grid

Ansoff’s matrix

BCG analysis

SWOT analysis

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-10 Conduct a SWOT analysis to generate insights from external and internal an
Topic : SWOT Analysis
Source : Chapter 04 Test Bank > MC Qu. 87 Juana, a manager at a multinational organ...

In the context of the SWOT matrix, which of the following best exemplifies a firm’s internal strength?
1. ______

increase in a firm’s customer loyalty

growth in the size of the market in which a firm operates

rise in the income of the demographic segment to which a firm caters

loss of a competitor’s reputation

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-10 Conduct a SWOT analysis to generate insights from external and internal an
Topic : SWOT Analysis
Source : Chapter 04 Test Bank > MC Qu. 88 In the context of the SWOT matrix, which of ...

In the context of SWOT analysis, which of the following best exemplifies a firm’s internal weakness?
1. ______

fall in the purchasing power of the firm’s customers

increased competition in the industry where the firm operates

irregularity in the raw materials supply throughout the industry

decline in the firm’s market share

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-10 Conduct a SWOT analysis to generate insights from external and internal an
Topic : SWOT Analysis
Source : Chapter 04 Test Bank > MC Qu. 89 In the context of SWOT analysis, which of th...

In the context of SWOT analysis, which of the following best exemplifies a firm’s external opportunity?
1. ______

an increase in its financial resources

an increase in its brand equity

an increase in its customers’ disposable income

an increase in its employee productivity

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-10 Conduct a SWOT analysis to generate insights from external and internal an
Topic : SWOT Analysis
Source : Chapter 04 Test Bank > MC Qu. 90 In the context of SWOT analysis, which of th...

Which of the following is a drawback of the SWOT analysis?
1. ______

The SWOT analysis takes into account only the internal environment of a firm, ignoring the equally important external environment.

This framework is only applicable to the manufacturing industries; it is ineffective when applied to the service firms.

With this framework, a strength can also be a weakness and an opportunity can also be a threat.

This framework allows managers to evaluate only a firm’s current situation and not its future prospects.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-10 Conduct a SWOT analysis to generate insights from external and internal an
Topic : SWOT Analysis
Source : Chapter 04 Test Bank > MC Qu. 91 Which of the following is a drawback of the ...

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

A local coffee shop expanded its limited menu to maintain its competitive advantage against its competition.

A local coffee shop added a salad bar to maintain its competitive advantage against its competition.

A local coffee shop took advantage of having loyal, hardworking, and enthusiastic employees to maintain its competitive advantage against its competition.

A local coffee shop had to reduce its hours of operation to maintain its competitive advantage against its competition.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 04-10 Conduct a SWOT analysis to generate insights from external and internal an
Topic : SWOT Analysis
Source : Chapter 04 Test Bank > MC Qu. 92 Which of the following applies to the Streng...

A resource-based view of a firm provides a model that systematically aids in identifying
1. ______

core rigidities.

core competencies.

competitive disadvantage.

competitive parity.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 04-02 Differentiate among a firm's core competencies, resources, capabilities, a
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 93 A resource-based view of a firm provides a m...

Essex Pictures spent $5 million to buy the rights to a best-selling novel. During preproduction, the film company hired an experienced screenwriter to adapt the novel for the screen; engaged a director, cinematographer, and crew; cast both the starring and supporting roles; rented cameras and other equipment; and scouted houses and other locations in New Orleans. Which of the following pairs of resources are both intangible?
1. ______

cameras and other equipment; screenwriter’s experience adapting novels

money spent to buy rights to the novel; houses and other locations in New Orleans

rights to the best-selling novel; screenwriter’s experience adapting novels for the screen

rights to the best-selling novel; houses and other locations in New Orleans

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 04-03 Compare and contrast tangible and intangible resources.
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 94 Essex Pictures spent $5 million to buy...

Southwest Airlines (SWA) has enjoyed a sustained competitive advantage, allowing it to outperform its competitors over several decades. Continental and Delta attempted to copy SWA with their offerings of Continental Lite and Song airlines, respectively. Neither Continental nor Delta, however, was able to successfully imitate the resource bundles and firm capabilities that make SWA unique. Which of the following is this case an example of?
1. ______

resource immobility

resource heterogeneity

resource imitation

resource substitution

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : Understanding the Importance of a Company's Resources
Source : Chapter 04 Test Bank > MC Qu. 95 Southwest Airlines (SWA) has enjoyed a susta...

Which of the following provides an example of how a firm’s valuable resource can be imitated?
1. ______

To compete with Build Your Own’s model of the Eiffel Tower, Best Replica came out with a model of a generic medieval cathedral.

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.

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.

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 Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-05 Apply the VRIO framework to assess the competitive implications of a firm'
Topic : Resource-Based View
Source : Chapter 04 Test Bank > MC Qu. 96 Which of the following provides an example o...

Which of the following describes a situation in which firms acquire resources at a low cost, laying the foundation for a competitive advantage later?
1. ______

better expectations of future resource value

path dependence affecting current decisions

causal ambiguity

social complexity

Which of the following best exemplifies social complexity as an isolating mechanism?
1. ______

Amanda’s Cosmetics attempted to imitate how Michele’s Makeup combined its management and product development systems, with little success.

Amanda’s Cosmetics failed to acquire the resources for its eyeliner at a low cost and thereby lost its competitive advantage over Michele’s Makeup.

Amanda’s Cosmetics had difficulty competing with Michele’s Makeup because it could not access the many makeup factories in Ohio as easily as its competitor.

Amanda’s Cosmetics did not fully understand the reasons for the success of Michele’s Makeup and therefore had difficulty competing with the firm.

Dynamic capabilities are especially important for surviving and competing in markets that
1. ______

shift quickly and constantly.

shift slowly and intermittently.

remain constant.

remain unpredictable.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 04-07 Outline how dynamic capabilities can help a firm sustain a competitive adv
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 99 Dynamic capabilities are especially important...

Bright-White has been the leader in denture-cleaning products for almost 40 years. However, the company has relied too long on its competency of cleaning dentures without refining or upgrading other aspects of its product. As a result, other denture-cleaning companies began to offer denture-cleaning products with all-natural whitening agents and anti-bacterial agents, which helped them gained a competitive advantage over Bright-White. This case is an example of
1. ______

core rigidity.

dynamic capabilities.

resource flow.

core competency.

To reduce the amount of time it takes to apply packaging to its finished products, North Star Foods is implementing new equipment at its production plants. By doing this, North Star is addressing a________ in the value chain analysis.
1. ______

primary activity

secondary activity

support activity

premier activity

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-08 Apply a value chain analysis to understand which of the firm's activities
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > MC Qu. 101 To reduce the amount of time it takes to app...

Leo’s Magic Rails 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
1. ______

external opportunity.

external threat.

internal strength.

internal weakness.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-10 Conduct a SWOT analysis to generate insights from external and internal an
Topic : SWOT Analysis
Source : Chapter 04 Test Bank > MC Qu. 102 Leo’s Magic Rails maintains a manufact...

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?
1. ______

Devote more resources to an extremely popular advertising campaign to promote an exciting new product.

Shut down struggling retail outlets in an economically depressed region.

Deploy top sales personnel to prevent buyers from migrating towards lower-priced competition.

Reorganize the inefficient research and development department to bring innovative products to market more quickly.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 04-10 Conduct a SWOT analysis to generate insights from external and internal an
Topic : SWOT Analysis
Source : Chapter 04 Test Bank > MC Qu. 103 After conducting a SWOT analysis, your firm ...

Differentiate between a firm’s resources and capabilities.

Describe the core competencies of any three successful companies in today’s business environment and give an example of one core competency for each company.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 04-02 Differentiate among a firm's core competencies, resources, capabilities, a
Topic : Resource-Based View
Source : Chapter 04 Test Bank > SA Qu. 105 Describe the core competencies of any three ...

Elaborate on the resource-based view of competitive advantage.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 04-03 Compare and contrast tangible and intangible resources.
Topic : Resource-Based View
Source : Chapter 04 Test Bank > SA Qu. 106 Elaborate on the resource-based view of comp...

Compare and contrast tangible and intangible resources, and give examples for each..

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-03 Compare and contrast tangible and intangible resources.
Topic : Resource-Based View
Source : Chapter 04 Test Bank > SA Qu. 107 Compare and contrast tangible and intangible...

Discuss resource immobility as a critical assumption in the resource-based model of a firm.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : Resource-Based View
Source : Chapter 04 Test Bank > SA Qu. 108 Discuss resource immobility as a critical as...

Briefly describe the VRIO framework.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 04-05 Apply the VRIO framework to assess the competitive implications of a firm'
Topic : VRIO Framework
Source : Chapter 04 Test Bank > SA Qu. 109 Briefly describe the VRIO framework.

In the context of the VRIO framework, what is a valuable resource, and how does it allow a firm to increase its economic value creation??

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-05 Apply the VRIO framework to assess the competitive implications of a firm'
Topic : VRIO Framework
Source : Chapter 04 Test Bank > SA Qu. 110 In the context of the VRIO framework, what...

In the context of the VRIO framework, what is meant by “organized to capture value,” and how can a firm fully exploit the competitive potential of its resources, capabilities, and competencies?

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-05 Apply the VRIO framework to assess the competitive implications of a firm'
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > SA Qu. 111 How can a firm fully exploit the competitive...

Elaborate on time compression diseconomiesand how this affects strategic decisions.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-06 Evaluate different conditions that allow a firm to sustain a competitive a
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > SA Qu. 112 Elaborate on time compression diseconomies.

Describe causal ambiguity and provide an example of how it can act as a barrier against imitation of a firm’s valuable resources.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 04-06 Evaluate different conditions that allow a firm to sustain a competitive a
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > SA Qu. 113 Describe causal ambiguity and provide an exa...

Explain dynamic capabilities and how these capabilities can help a firm sustain its competitive advantage.

Provide a concrete example of how dynamic capabilities can benefit firms.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 04-07 Outline how dynamic capabilities can help a firm sustain a competitive adv
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > SA Qu. 115 Provide a concrete example of how dynamic capabiliti...

Define resource stocks and resource flows, and differentiate them with the help of the bathtub metaphor.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-07 Outline how dynamic capabilities can help a firm sustain a competitive adv
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > SA Qu. 116 Define resource stocks and resource flows...

Define the value chain.

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

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-08 Apply a value chain analysis to understand which of the firm's activities
Topic : Value Chain Analysis
Source : Chapter 04 Test Bank > SA Qu. 118 Explain how the distinct activities of a firm help in...

Explain the value chain perspective of a firm’s competitive advantage.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-08 Apply a value chain analysis to understand which of the firm's activities
Topic : Value Chain Analysis
Source : Chapter 04 Test Bank > SA Qu. 119 Explain the value chain perspective of a fir...

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

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 1 Easy
Learning Objective : 04-08 Apply a value chain analysis to understand which of the firm's activities
Topic : Value Chain Analysis
Source : Chapter 04 Test Bank > SA Qu. 120 Provide examples of the primary activities i...

Provide examples of the support activities in a firm’s value chain.

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-08 Apply a value chain analysis to understand which of the firm's activities
Topic : Value Chain Analysis
Source : Chapter 04 Test Bank > SA Qu. 121 Provide examples of the support activities...

How do strategic leaders benefit from conducting a SWOT analysis?

Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-10 Conduct a SWOT analysis to generate insights from external and internal an
Topic : SWOT Analysis
Source : Chapter 04 Test Bank > SA Qu. 122 How do strategic leaders benefit from conducting a SW...

Elaborate on a drawback of SWOT analysis with the help of an example.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 04-10 Conduct a SWOT analysis to generate insights from external and internal an
Topic : SWOT Analysis
Source : Chapter 04 Test Bank > SA Qu. 123 Elaborate on a drawback of SWOT analysis w...

Explain what a strategic activity system is and how it can lead to a competitive advantage.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-09 Identify competitive advantage as residing in a network of distinct activi
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > SA Qu. 124 Explain what a strategic activity system...

Define isolating mechanisms and explain how they work to help firms strengthen their competitive advantage.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 2 Medium
Learning Objective : 04-06 Evaluate different conditions that allow a firm to sustain a competitive a
Topic : Sustaining a Competitive Advantage
Source : Chapter 04 Test Bank > SA Qu. 125 Define isolating mechanisms and explain...

Describe the two critical assumptions of the resource-based view.

Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 04-04 Evaluate the two critical assumptions about the nature of resources in the
Topic : The Resource-Based View
Source : Chapter 04 Test Bank > SA Qu. 126 Describe the two critical assumptions...

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Chapter 4 Internal Resources & Capabilities

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Frank Rothaermel

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