Firms use both the ______ and ______ models. In fact, these models complement each other in that one focuses outside the firm while the other focuses inside the firm.

Question

Quizplus · Accepted Answer

The I/O (Industrial Organization) model focuses on the external factors such as industry competition and market demand, while the resource-based model focuses on internal factors such as firm capabilities and resources. Therefore, the best choice is B: I/O and resource-based models complement each other in analyzing both external and internal factors affecting a firm's performance. The other choices are not as appropriate as they do not represent the two complementary models typically used by firms.

Firms Use Both the ______ and ______ Models

Firms Use Both the and Models