Evaluating Company Resources and Competitiveness
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Questions and Answers

Which of the following is NOT considered a tangible resource?

  • Patents (correct)
  • State-of-the-art manufacturing plants
  • Attractive real estate locations
  • Efficient distribution facilities

    • The capability of a firm refers to its financial assets only.

    False

    Name one type of organizational resource.

    Information and communication systems

    A company's ____________ includes its cash and cash equivalents, marketable securities, and credit rating.

    <p>financial resources</p> Signup and view all the answers

    Which of the following best describes a capability?

    <p>The ability to perform certain activities competently</p> Signup and view all the answers

    Match each type of resource with its description:

    <p>Physical resources = Manufacturing plants and distribution facilities Financial resources = Cash and securities Technological assets = Patents and copyrights Organizational resources = Information systems and quality control</p> Signup and view all the answers

    Resources include both tangible and intangible assets.

    <p>True</p> Signup and view all the answers

    What is an example of a capability related to customer service?

    <p>Customer oriented</p> Signup and view all the answers

    What is the main focus of the VRIN tests?

    <p>Determining if a resource provides a competitive advantage</p> Signup and view all the answers

    Causal ambiguity helps rivals easily imitate a firm's resources.

    <p>False</p> Signup and view all the answers

    Name one type of intangible resource.

    <p>Human assets and intellectual capital</p> Signup and view all the answers

    The __________ of a company includes its norms of behavior and ingrained beliefs.

    <p>company culture</p> Signup and view all the answers

    Match the following intangible resources with their descriptions:

    <p>Human assets and intellectual capital = An experienced and capable workforce Brand, image, and reputational assets = Trademarks and reputation for quality Relationships = Alliances providing access to specialized know-how Company culture = The norms of behavior and business principles</p> Signup and view all the answers

    Which of the following is NOT a VRIN test?

    <p>Expensive</p> Signup and view all the answers

    All resources that are valuable also provide a sustainable competitive advantage.

    <p>False</p> Signup and view all the answers

    What role do social complexity and causal ambiguity play in competitive advantage?

    <p>They inhibit rivals from imitating valuable resources.</p> Signup and view all the answers

    Which of the following is NOT listed as a potential internal weakness for a company?

    <p>Good customer service capabilities</p> Signup and view all the answers

    A strong dealer network is considered a competitive deficiency.

    <p>False</p> Signup and view all the answers

    Name one potential market opportunity for a company.

    <p>Expanding into new geographic markets</p> Signup and view all the answers

    Falling trade barriers in attractive foreign markets present a potential ______ for a company.

    <p>opportunity</p> Signup and view all the answers

    Match the potential external threats to a company's future prospects:

    <p>Increasing competition = May squeeze profit margins Slowdown in market growth = Decreased sales potential Entry of new competitors = More market share competition Bargaining power of suppliers = Higher costs for the company</p> Signup and view all the answers

    What is an example of a potential strength a company might have?

    <p>Good supply chain management</p> Signup and view all the answers

    Too narrow a product line relative to competitors is a potential weakness for a company.

    <p>True</p> Signup and view all the answers

    A weaker brand image or reputation compared to rivals can be a potential internal ______.

    <p>weakness</p> Signup and view all the answers

    What is an example of strategic fit?

    <p>Combining marketing teams from different businesses</p> Signup and view all the answers

    Economies of scope arise from large scale operations.

    <p>False</p> Signup and view all the answers

    What does the Balanced Scorecard link together?

    <p>Vision, mission, strategic priorities, objectives, measures, and initiatives</p> Signup and view all the answers

    Strategic fit exists when the value chains of different businesses present opportunities for __________ sharing.

    <p>cost</p> Signup and view all the answers

    Match the following concepts with their definitions:

    <p>Economies of Scope = Cost reductions from strategic fit Strategic Fit = Opportunities for resource transfer Balanced Scorecard = Framework for managing strategy Economies of Scale = Cost advantages from larger operations</p> Signup and view all the answers

    Which of the following is a benefit of related diversification?

    <p>Cross-business economies associated with cost savings</p> Signup and view all the answers

    Brand sharing is not an aspect of strategic fit.

    <p>False</p> Signup and view all the answers

    What can lead to a competitive advantage based on lower costs than rivals?

    <p>Cross-business economies associated with cost-saving strategic fit</p> Signup and view all the answers

    When is it especially important to signal value to buyers?

    <p>When buyers are making a first-time purchase</p> Signup and view all the answers

    A differentiation strategy works best when technological changes are slow-paced.

    <p>False</p> Signup and view all the answers

    What is a key pitfall to avoid when pursuing a differentiation strategy?

    <p>Overspending on efforts to differentiate that erode profitability</p> Signup and view all the answers

    Focused strategies are developed for competing in a narrow piece of the total market defined by __________ uniqueness or special product attributes.

    <p>geographic</p> Signup and view all the answers

    Match the differentiation strategy characteristics with the correct descriptions:

    <p>Diverse buyer needs = Indicates a wide variety of requirements and uses Fast-paced technological change = Requires ongoing innovation and responsiveness Subjective differentiation = Relies heavily on customers' personal perceptions Few rivals following similar approach = Suggests a unique market position and less competition</p> Signup and view all the answers

    Which of the following is NOT a pitfall when pursuing a differentiation strategy?

    <p>Establishing meaningful quality gaps over rivals</p> Signup and view all the answers

    Offering unique product features is always a successful differentiation strategy.

    <p>False</p> Signup and view all the answers

    List one condition under which a differentiation strategy works best.

    <p>There are many ways to differentiate the product or service</p> Signup and view all the answers

    What is a primary goal of a low-cost strategy?

    <p>To win price-sensitive buyers and increase total profits</p> Signup and view all the answers

    A cost driver is an element that has no impact on a company's cost structure.

    <p>False</p> Signup and view all the answers

    Name one method a company can use to achieve low-cost leadership.

    <p>Perform essential value chain activities more cost-effectively.</p> Signup and view all the answers

    A strategy that uses lower-cost input without sacrificing product quality is referred to as _____ integration.

    <p>vertical</p> Signup and view all the answers

    Which of the following is NOT a method of managing costs in value chain activities?

    <p>Increasing employee wages drastically</p> Signup and view all the answers

    Match the following practices with their descriptions:

    <p>Economies of scale = Reduction in per-unit cost as output increases Communication systems = Used for achieving operating efficiencies Outsourcing = Engaging third parties for certain business processes Bargaining power = Leverage in negotiating with suppliers</p> Signup and view all the answers

    Using information technology can lead to lower overall compensation costs.

    <p>True</p> Signup and view all the answers

    What is the effect of performing essential value chain activities more cost-effectively?

    <p>It leads to competitive advantages in pricing.</p> Signup and view all the answers

    Study Notes

    Evaluating a Company's Resources, Capabilities, and Competitiveness

    • Resource: A competitive asset owned or controlled by a firm.
    • Capability: The capacity of a firm to perform internal activities competently. Capabilities are developed and enabled through a firm's resources.
    • Examples of resources: People, technology, and products.
    • Examples of capabilities: Innovation, delivery, and customer-oriented practices.

    Tangible and Intangible Resources

    • Tangible Resources: Physical assets like manufacturing plants, equipment, real estate, cash, and financial assets (securities, credit rating, borrowing capacity).
    • Technological Assets: Patents, copyrights, superior production technology, information systems, and quality control systems.
    • Organizational Resources: Strong distributor networks, reliable quality control.
    • Intangible Resources: Human assets (experienced and talented workforce, collective learning and managerial expertise), intellectual capital, brand, image, and reputational assets.
    • Relationships: Alliances, joint ventures, trust with partners.
    • Company Culture: Norms of behavior, business principles, and ingrained beliefs within the company.

    VRIN Competitive Power Tests

    • Valuable: Is the resource or capability competitively valuable?
    • Rare: Is the resource or capability rare? (Something rivals lack)
    • Inapplicable: Is the resource or capability inimitable or hard to copy?
    • Nonsubstitutable: Is the resource or capability vulnerable to substitution from different types of resources and capabilities?

    CORE CONCEPTS

    • Resource Bundles: The integration of various resources to create a competitive advantage.
    • Dynamic Capabilities: The ability to adjust, refine, or reconfigure existing resources, deepening competencies in response to market changes.
    • Social Complexity and Causal Ambiguity: Factors that inhibit rivals from imitating a firm's most valuable resources and capabilities (complex resource or capability is hard to understand how it works).
    • SWOT Analysis: A tool for determining a firm's internal strengths and weaknesses, external opportunities, and external threats to assess its competitive well-being.

    Value Chain

    • Value Chain Analysis: A process mapping a company to understand activities that create value for customers and activities. A company can improve efficiency and value by identifying the costs and effectiveness of activities and use it as a tool to improve the cost of activities.
    • Primary Activities related to Supply Chain Management, Operations, Distribution, Sales and Marketing, Service, and Profit.
    • Support Activities are product research and development, technology, systems development, human resources management, and general administration.
    • Benchmarking: Comparing firm performance in various aspects of value chains can identify competitive advantages.

    Competitive Strategies and Market Positioning

    • Competitive Strategies: Different strategies businesses use to gain an advantage over competitors. The two main factors that distinguish one competitive strategy from another are targeting (broad or narrow) and pursuit of advantage (low cost or differentiation of product).
    • Competitive Strategies focus on specifics of management's game plan for competing to achieve competitive advantage over rivals (e.g., low-cost provider, broad differentiation, focused low-cost, focused differentiation).
    • Best-Cost Provider Strategy: A hybrid that blends low-cost and differentiation strategies, aiming to satisfy buyer expectations on key quality, features, performance, and service while beating customer expectations on price.

    Diversification

    • Business Diversification: Refers to a company's strategic expansion into new product lines, services, or markets to spread risk, identify opportunities, and enhance overall business resilience.
    • Diversification by Acquisition: Quickly acquiring an existing business to gain access to its knowledge, capabilities, and relationships, and to bypass market entry barriers.

    The Balanced Scorecard

    • A framework for implementing and managing strategies by linking vision, mission, objectives, measures, and initiatives using financial and non-financial metrics.
    • Perspectives: Financial, customer, internal process, learning and growth.

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    Description

    This quiz explores the key concepts related to a company's resources and capabilities, distinguishing between tangible and intangible assets. It delves into how these resources contribute to a firm's competitiveness and operational efficiency. Test your understanding of these fundamental business principles.

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