Podcast
Questions and Answers
Firms only earn below-average returns when the value they create is greater than the costs incurred to create that value.
Firms only earn below-average returns when the value they create is greater than the costs incurred to create that value.
False
Value chain analysis is used to analyze a firm's cost position in a domestic-only context.
Value chain analysis is used to analyze a firm's cost position in a domestic-only context.
False
Support functions are activities that create value for customers.
Support functions are activities that create value for customers.
False
A firm can develop a capability and/or a core competence in only value chain activities.
A firm can develop a capability and/or a core competence in only value chain activities.
Signup and view all the answers
Value chain analysis is used to identify the means to implement a chosen strategy.
Value chain analysis is used to identify the means to implement a chosen strategy.
Signup and view all the answers
Activities associated with supply chains should not be studied within a global context.
Activities associated with supply chains should not be studied within a global context.
Signup and view all the answers
Value chain activities are activities that support the work being done to produce, sell, distribute, and service products.
Value chain activities are activities that support the work being done to produce, sell, distribute, and service products.
Signup and view all the answers
Firms use value chain analysis to identify their capabilities and core competencies in order to serve themselves.
Firms use value chain analysis to identify their capabilities and core competencies in order to serve themselves.
Signup and view all the answers
Outsourcing always leads to a reduction in the complexity of a firm's operations.
Outsourcing always leads to a reduction in the complexity of a firm's operations.
Signup and view all the answers
Not-for-profit agencies do not engage in outsourcing.
Not-for-profit agencies do not engage in outsourcing.
Signup and view all the answers
Firms should outsource all activities where they lack competence.
Firms should outsource all activities where they lack competence.
Signup and view all the answers
Outsourcing always involves the purchase of finished goods or services from an external supplier.
Outsourcing always involves the purchase of finished goods or services from an external supplier.
Signup and view all the answers
Effective outsourcing can lead to a competitive disadvantage.
Effective outsourcing can lead to a competitive disadvantage.
Signup and view all the answers
Firms should outsource all activities to external suppliers.
Firms should outsource all activities to external suppliers.
Signup and view all the answers
The trend towards outsourcing is slowing down in multiple global industries.
The trend towards outsourcing is slowing down in multiple global industries.
Signup and view all the answers
Outsourcing allows firms to develop all technologies that might lead to competitive advantage.
Outsourcing allows firms to develop all technologies that might lead to competitive advantage.
Signup and view all the answers
Outsourcing always leads to the loss of jobs within the focal firm.
Outsourcing always leads to the loss of jobs within the focal firm.
Signup and view all the answers
Firms can never enhance their innovation capabilities by outsourcing.
Firms can never enhance their innovation capabilities by outsourcing.
Signup and view all the answers
Offshoring is the same as outsourcing.
Offshoring is the same as outsourcing.
Signup and view all the answers
A firm's strengths are always reflected by its resources and capabilities.
A firm's strengths are always reflected by its resources and capabilities.
Signup and view all the answers
Having a significant quantity of resources is the same as having the 'right' resources.
Having a significant quantity of resources is the same as having the 'right' resources.
Signup and view all the answers
Firms should only outsource functions where they have weak capabilities.
Firms should only outsource functions where they have weak capabilities.
Signup and view all the answers
Firms can always build the needed capabilities and competencies by acquiring resources.
Firms can always build the needed capabilities and competencies by acquiring resources.
Signup and view all the answers
Analyzing the internal organization is not necessary for identifying strengths and weaknesses.
Analyzing the internal organization is not necessary for identifying strengths and weaknesses.
Signup and view all the answers
A firm's core competencies can never become core rigidities.
A firm's core competencies can never become core rigidities.
Signup and view all the answers
Outsourcing is a tool used to focus on a firm's weaknesses rather than its core competencies.
Outsourcing is a tool used to focus on a firm's weaknesses rather than its core competencies.
Signup and view all the answers
A firm's total set of resources being unconstrained always leads to more focused and productive decision makers.
A firm's total set of resources being unconstrained always leads to more focused and productive decision makers.
Signup and view all the answers
New competitors figuring out a better way to serve a firm's customers can never lead to a core competence becoming a core rigidity.
New competitors figuring out a better way to serve a firm's customers can never lead to a core competence becoming a core rigidity.
Signup and view all the answers
A firm's core competencies can be assumed to be a permanent competitive advantage.
A firm's core competencies can be assumed to be a permanent competitive advantage.
Signup and view all the answers
The value-creating ability of core competencies is always taken for granted.
The value-creating ability of core competencies is always taken for granted.
Signup and view all the answers
When using their unique core competencies to create unique value for customers that competitors can duplicate, firms have established one or more competitive advantages.
When using their unique core competencies to create unique value for customers that competitors can duplicate, firms have established one or more competitive advantages.
Signup and view all the answers
Customers are not the ones firms seek to serve when using value chain analysis to identify their capabilities and core competencies.
Customers are not the ones firms seek to serve when using value chain analysis to identify their capabilities and core competencies.
Signup and view all the answers
A capability must allow the firm to perform an activity in a manner that provides value inferior to that provided by competitors to become a core competence.
A capability must allow the firm to perform an activity in a manner that provides value inferior to that provided by competitors to become a core competence.
Signup and view all the answers
Evaluating a firm’s capability to execute its value chain activities and support functions is a simple task.
Evaluating a firm’s capability to execute its value chain activities and support functions is a simple task.
Signup and view all the answers
There is an obviously correct model or rule universally available to help in the process of using value chain analysis.
There is an obviously correct model or rule universally available to help in the process of using value chain analysis.
Signup and view all the answers
A firm should strengthen its resources and capabilities in all value chain activities and support functions.
A firm should strengthen its resources and capabilities in all value chain activities and support functions.
Signup and view all the answers
Identifying and assessing the value of a firm’s resources and capabilities does not require judgment.
Identifying and assessing the value of a firm’s resources and capabilities does not require judgment.
Signup and view all the answers
A firm can create value for customers and capture that value by performing an activity in a manner that provides value equal to that provided by competitors.
A firm can create value for customers and capture that value by performing an activity in a manner that provides value equal to that provided by competitors.
Signup and view all the answers
Study Notes
Value Chain Analysis
- Helps firms understand value-creating and non-value-creating parts of their operations
- Identifies multiple means to facilitate implementation of a chosen strategy
- Analyzes cost position and identifies core competencies
- Examines supply chains in a global context
Value Chain Activities and Support Functions
- Value chain activities:
- Produce, sell, distribute, and service products to create value for customers
- Examples: manufacturing, marketing, sales, logistics
- Support functions:
- Activities that support value chain activities
- Examples: human resources, finance, research and development
Core Competencies and Competitive Advantage
- A firm develops a core competence when it establishes an ability to create unique value for customers
- Core competencies provide competitive advantages when they are difficult for competitors to duplicate
- Firms should evaluate their capabilities and core competencies relative to competitors
Building Core Competencies
- A capability becomes a core competence when it allows a firm to:
- Perform an activity superior to competitors
- Perform a value-creating activity that competitors cannot perform
- Firms should focus on building core competencies to create value for customers and capture that value
Outsourcing
- The purchase of a value-creating activity or support function activity from an external supplier
- Helps firms increase flexibility, mitigate risks, and reduce capital investments
- Useful for activities where the firm lacks competence or is at a substantial disadvantage compared to competitors
- Concerns associated with outsourcing include potential loss of innovation capability and job loss
Evaluating Core Competencies and Outsourcing
- Firms should carefully evaluate their core competencies and outsourcing decisions to ensure they are creating value for customers
- Outsourcing can help firms focus on their core competencies, but core competencies should not be taken for granted
- Core competencies can become core rigidities if not continuously evaluated and improved
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
Understand how firms analyze their operations to create value for customers, including identifying cost positions, core competencies, and supply chains in a global context.
