Question 1

The building blocks of competitive advantage are efficiency, quality, innovation and customer responsiveness.

Accepted Answer

Efficiency, quality, innovation and customer responsiveness are indeed the building blocks of competitive advantage.

Question 2

Employee productivity is a common measure of efficiency.

Accepted Answer

Employee productivity is a widely used measure to assess how efficiently an organization is producing goods or services. It reflects how much work an employee completes within a specific timeframe and is often used as a benchmark to identify areas where efficiency can be improved.

Question 3

The primary activities of the value chain include the design, creation, and delivery of the product, the product's marketing, and its support and after-sales service.

Accepted Answer

This statement is true. The primary activities in a value chain include inbound logistics, operations, outbound logistics, marketing and sales, and service. Design, creation, delivery, marketing, and after-sales service fall under these categories.

Question 4

At the heart of any company's business model is the combination of congruent strategies aimed at creating distinctive competencies that differentiate its products and result in a lower cost structure.

Accepted Answer

This statement is true. A company's business model is based on combining strategies that create distinctive competencies, which make its products unique and ultimately lead to cost savings.

Question 5

Lucy is an entrepreneur who is interested in opening her own bakery. She is concerned with obtaining money for equipment for the bakery such as ovens, pots and pans, and display cabinets. Lucy is trying to obtain intangible resources for her business.

Accepted Answer

Intangible resources are non-physical assets like brand reputation or intellectual property. Equipment like ovens and display cabinets are tangible resources.

Question 6

The price a company charges for a good or service is typically more than the utility placed on that good or service by the customer.

Accepted Answer

The price a company charges is typically based on the perceived utility or value the customer places on the good or service, often aiming to match or exceed this perceived value to ensure customer satisfaction and willingness to purchase.

Question 7

At Adam's bicycle repair shop, the primary value chain activity of production occurs each time a customer's bicycle is repaired.

Accepted Answer

The primary value chain activity of production involves taking inputs and transforming them into finished products or services, which is exactly what happens when a customer's bicycle is repaired at Adam's bicycle repair shop.

Question 8

The importance of reliability in building competitive advantage has increased dramatically over the past several decades.

Accepted Answer

Reliability is now considered a key factor in building competitive advantage because it directly impacts customer satisfaction, brand reputation, and operational efficiency. As technology and globalization continue to advance, companies must prioritize reliability in order to stay ahead of the competition.

Question 9

A value chain is a sequence of activities for transforming inputs into outputs that are valued by customers.

Accepted Answer

A value chain is a series of activities that add value to a product or service. The transformation process starts with inputs and ends with outputs that are valued by customers. The activities in a value chain can include production, marketing, sales, and customer service.

Question 10

Together with an analysis of the company's external environment, internal analysis gives managers the information they need to choose the business model and strategies that will enable their company to attain a sustained competitive advantage.

Accepted Answer

This statement is true. An analysis of the external environment and internal environment provides managers with a comprehensive understanding of a company's strengths, weaknesses, opportunities, and threats. With this information, they can determine which business model and strategies will give them a competitive edge over their rivals.

Question 11

In the fashion industry, the time required to take a new product from design inception to placement in a retail store is known as customer response time.

Accepted Answer

Customer response time refers to the time taken to bring a new product from design to placement in a retail store, encompassing every process involved in the supply chain.

Question 12

Internal analysis is concerned with identifying a company's opportunities and threats.

Accepted Answer

Internal analysis is concerned with identifying a company's strengths and weaknesses, while external analysis is concerned with identifying opportunities and threats.

Question 13

A resource is inimitable if competitors are able to copy it easily.

Accepted Answer

A resource is inimitable if competitors are unable to copy it easily or quickly. If a resource can be easily copied, it is not inimitable and provides no sustainable competitive advantage.

Question 14

When a company has differentiated products, they have less pricing options.

Accepted Answer

When a company has differentiated products, they have more pricing options since they can use their unique features to command a higher price or target a specific market segment.

Question 15

Nene works in a factory where she picks crab meat from crabs. She is paid per day based upon the number of pounds of crab meat that she picks. Nene's daily number of pounds of crab meat can be referred to as her productivity.

Accepted Answer

This statement describes Nene's job and how she is paid based on her daily productivity of picking crab meat.

Question 16

The more a resource is firm-specific and difficult to imitate, the more likely a company holding that resource is said to have a distinctive competency.

Accepted Answer

This statement is true as firm-specific resources are unique to a particular company and difficult to imitate by competitors, giving the company a competitive advantage and a distinctive competency.

Question 17

Resources can be considered valuable if they enable a company to create a strong demand for its products or if it reduces the costs of producing its products.

Accepted Answer

Resources can be considered valuable if they increase the demand for a company's products, such as through marketing or research and development. Similarly, resources that allow a company to reduce its production costs, such as through efficient supply chain management or advanced technology, can also be valuable. Therefore, both of these criteria can be used to determine the value of resources in a business context.

Question 18

The VRIO model is designed to help companies assess the quality of their resources and identify sources of competitive advantage.

Accepted Answer

The VRIO model is indeed used to evaluate a company's resources to determine their value, rarity, inimitability, and organization, and to identify competitive advantage sources.

Question 19

Quality-as-excellence and quality-as-reliability are concepts that apply to goods but not services.

Accepted Answer

Both quality-as-excellence and quality-as-reliability are concepts that are applicable to both goods and services.

Question 20

Distinctive competencies are firm-specific strengths that allow a company to differentiate its products and achieve substantially lower costs than its rivals.

Accepted Answer

Distinctive competencies are indeed firm-specific strengths that give a company a competitive advantage and allow it to differentiate its products and achieve lower costs than its rivals.

Quiz 3: Internal Analysis: Resources and Competitive Advantage