9 Questions
What is identified as an area that requires strategists to seek positive changes and buffer against negative changes?
External and internal factors
Why is it important to establish objectives and strategies based on internal strengths and weaknesses?
To gain and sustain competitive advantages
What is the most critical factor that constantly changes and necessitates the need for strategists to seek positive changes and protect against negative changes?
Market demand
In the context of strategic management, what is the main reason for conducting a SWOT analysis?
To assess internal strengths and weaknesses
What term is used for strengths that cannot be easily matched or imitated by competitors?
Distinctive competencies
According to the resource-based view (RBV) approach, what are the three all-encompassing categories of internal resources important for a firm?
Financial, Human, and Technological Resources
Why does the RBV theory suggest that intangible resources are often more important for gaining and sustaining competitive advantage?
Intangible resources are harder to imitate.
According to RBV theorists, when does a firm have a sustainable competitive advantage?
When it pursues a strategy not implemented by any competing firm
What characteristics make a resource valuable, according to RBV theory?
Uniqueness and limited availability
Study Notes
Strategic Management
- External environment is identified as an area that requires strategists to seek positive changes and buffer against negative changes.
Importance of Objectives and Strategies
- Establishing objectives and strategies based on internal strengths and weaknesses is important because it enables firms to capitalize on their strengths and improve their weaknesses.
Dynamic Environment
- The most critical factor that constantly changes and necessitates the need for strategists to seek positive changes and protect against negative changes is the external environment.
SWOT Analysis
- The main reason for conducting a SWOT analysis is to identify internal strengths and weaknesses, as well as external opportunities and threats.
Unique Strengths
- Strengths that cannot be easily matched or imitated by competitors are referred to as "unique strengths".
Resource-Based View (RBV) Approach
- According to the RBV approach, the three all-encompassing categories of internal resources important for a firm are:
- Tangible resources (e.g. physical assets, financial resources)
- Intangible resources (e.g. knowledge, skills, reputation)
- Organizational resources (e.g. business processes, systems)
Intangible Resources
- The RBV theory suggests that intangible resources are often more important for gaining and sustaining competitive advantage because they are difficult to replicate and can provide a unique source of value.
Sustainable Competitive Advantage
- According to RBV theorists, a firm has a sustainable competitive advantage when it has a resource or capability that is:
- Valuable
- Rare
- Difficult to imitate
- Non-substitutable
Valuable Resources
- According to RBV theory, a resource is valuable if it:
- Exploits opportunities or neutralizes threats
- Is rare or uncommon among competitors
- Is difficult to imitate or substitute
- Enables the firm to create a unique product or service
Test your knowledge of business strategy with this quiz. Questions cover topics such as continually changing factors, establishing objectives and strategies based on internal strengths and weaknesses, and more!
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