Deck 11: Sustaining Competitive Advantage

Question 1

What term best describes a resource that cannot "sell itself" to the highest bidder?

A) Isolated
B) Value-creating
C) Scarce
D) Imperfectly mobile
E) Profit maximizing

Answer 1

D

Question 2

What term best describes assets that are more valuable when used together than when separated?

A) Isolating
B) Value-creating
C) Imperfectly mobile
D) Scarce
E) Cospecialized

Answer 2

E

Question 3

Which of the following terms best describes an idea,developed by Gary Hamel and C.K.Prahalad,which combines commitment to the firm's ambitions with the flexibility to change with circumstances?

A) Leveraging resources
B) Strategic intent
C) Strategic stretch
D) Hypercompetition
E) Global dominance

Answer 3

C

Question 4

What term describes the optimal allocation of society's resources at a given point in time?

A) Creative destruction
B) Static efficiency
C) Dynamic efficiency
D) Efficient allocation
E) Resource efficiency

Question 5

What term best describes when quiet periods in markets are punctuated by fundamental "shocks" or "discontinuities" that destroy old sources of advantage and replace them with new ones?

A) Creative destruction
B) Entrepreneurship
C) Innovation
D) Market for ideas
E) Disruptive technologies

Question 6

What term best refers to fundamental changes that lead to major shifts of competitive positions in a market?

A) Jump
B) Shock
C) Alteration
D) Bolt
E) Shift

Question 7

Which of the following is the weakest an example of a "shock"?

A) Contracting to use another firm's proprietary process
B) Product Innovations
C) Discoveries of new sources of consumer value or market segments
D) Shifts in demand
E) Changes in public policy that enables firms to significantly shift their strategic position in a business

Question 8

Which of the following terms best describes a phenomenon whereby,despite equal innovative capabilities,an entrant is willing to spend more to develop an innovation?

A) The replacement effect
B) Strategic intent
C) Strategic stretch
D) Hypercompetition
E) The sunk cost effect

Question 9

Which of the following terms best describes the situation when sources of competitive advantage in an industry are being created and eroded at an increasingly rapid rate?

A) Leveraging resources
B) Strategic intent
C) Strategic stretch
D) Hypercompetition
E) Global dominance

Question 10

What term describes a framework used in strategy based on resource heterogeneity which posits that for a competitive advantage to be sustainable,it must be underpinned by resource capabilities that are scarce and imperfectly mobile?

A) Persistence of profitability for the firm
B) Capability-based theory of the firm
C) Regression to the mean
D) Resource-based theory of the firm
E) Five-forces framework

Question 11

Which of the following is not an impediment to imitation?

A) Legal restrictions
B) Superior access to inputs or customers
C) Scale diseconomies
D) Market size economies
E) Intangible barriers: casual ambiguity, dependence on historical circumstances, and social complexity

Question 12

What term best characterizes the battle between firms to innovate first?

A) Market for new ideas
B) New product competition
C) R&D race
D) Innovation competition
E) Patent race

Question 13

What term describes the situation where a firm does exceedingly well due to good luck or exceedingly poorly due to bad luck,but returns to normal performance following?

A) Regression to the mean
B) Competitive advantage
C) Persistent performer
D) Sustainable firm
E) Predictable performance

Question 14

What term best describes clusters of activities that a firm does especially well in comparison with other firms?

A) Competitive advantage
B) Resources
C) Capabilities
D) Threats to sustainability
E) Strategic firm assets

Question 15

What type of isolating mechanisms impedes existing firms and potential entrants from duplicating the resources and capabilities that form the basis of the firm's advantage?

A) Scarce
B) Imperfectly mobile
C) Early-mover advantages
D) Impediments to imitation
E) Cospecialized

Question 16

Which of the following is least likely a characteristic of profit persistence in an industry?

A) Entry barriers exist
B) Economic profits should quickly converge to zero
C) Barriers to imitation exist
D) Firms earning above-average profits today should continue to do so in the future
E) Low profit firms today should remain low-profit firms in the future

Question 17

Which of the following terms best describes a phenomenon whereby a profit-maximizing firm sticks with its current technology or product concept even though the profit-maximizing decision for a firm starting from scratch would be to choose a different technology or product concept?

A) The replacement effect
B) Strategic intent
C) Strategic stretch
D) Hypercompetition
E) The sunk cost effect

Question 18

What type of isolating mechanisms increase the economic power of a competitive advantage over time once a firm has acquired that advantage?

A) Scarce
B) Imperfectly mobile
C) Early-mover advantages
D) Impediments to imitation
E) Cospecialized

Question 19

Which of the following terms best describes a place in which a firm can sell its ideas for full value?

A) Industry for ideas
B) Community of ideas
C) Innovation market
D) Market for ideas
E) Idea environment

Question 20

What term best describes firm-specific assets such as patents and trademarks,brand-name reputation,installed base,and organizational culture?

A) Competitive advantage
B) Capabilities
C) Resources
D) Threats to sustainability
E) Strategic firm assets

Question 21

Which of the following is not a Legal Restriction?

A) Patent
B) Copyright
C) Trademark
D) Intellectual property
E) Operating rights

Question 22

Which of the following products and services depend on standards?

A) Cellular communications
B) Internet
C) Video gaming
D) High-definition television
E) All of the above

Question 23

Which of the following terms best describes the ability of a firm to maintain and adapt the capabilities that are the basis of its competitive advantage?

A) Riskiness of R&D
B) Correlated research strategies
C) Evolutionary economics
D) Dynamic efficiency
E) Dynamic capabilities

Question 24

What term best describes the characteristic of a process if past circumstances could exclude certain evolutions in the future?

A) Path dependence
B) Correlated research strategies
C) Evolutionary economics
D) Dynamic efficiency
E) Dynamic capabilities

Question 25

What product characteristic refers to the situation where consumers place higher value on a product if other consumers also use it?

A) Value creation effect
B) Product linkage
C) Product externality
D) Complementary effect
E) Network effect

Question 26

Size,growth,and character of home demand for a firm's product are examples of what?

A) Factor conditions
B) Demand conditions
C) Supply conditions
D) Related supplier or support industries
E) Strategy, structure, and rivalry

Question 27

Which of the following terms describes a nation's position with regard to the elements (e.g.human resources,infrastructure)of production that are necessary to compete in a particular industry?

A) Factor conditions
B) Demand conditions
C) Supply conditions
D) Related supplier or support industries
E) Strategy, structure, and rivalry

Question 28

Which of the following is not an isolating mechanism that falls under the heading of early-mover advantage?

A) Learning curve
B) Reputation and buyer uncertainty
C) Buyer switching costs
D) Network effects
E) Superior access to inputs or customers

Question 29

What term refers to the costs incurred by buyers when they change to a different supplier?

A) Switching costs
B) Buyer costs
C) Reputation costs
D) Learning costs
E) Customer costs

Question 30

Which of the following is not an example of a way a seller can increase switching costs?

A) Creating a product line compatible with parts that are made by other manufacturers
B) Offering coupons that tie discounts to the completion of a series of transactions
C) Offering warranties if product is not serviced at authorized dealer
D) Bundling complementary products that fit together in a product line
E) Offering "frequent customer" points that tie promotions to the completion of a series of transactions