Question 1

Brad has developed a new,improved irrigation procedure for use in his apple orchard.Brad is creating a product innovation.

Accepted Answer

Brad's development of a new irrigation procedure is considered a process innovation, as it involves improving the method of production or operation, rather than creating a new product.

Question 2

The Icarus paradox suggests that those factors that led to a company's success may ultimately lead to their failure.

Accepted Answer

The Icarus paradox proposes that a company's success can lead to excessive confidence and risk-taking, which can ultimately lead to their downfall.

Question 3

Competitive advantage typically leads to
A)an effective business model.
B)average profitability within an industry.
C)superior profitability.
D)making procedures routine.
E)flexibility in manufacturing.

Accepted Answer

Competitive advantage allows a company to differentiate itself from competitors, providing a unique value to customers. This can result in superior profitability, as customers may be willing to pay a premium for that unique value.

Question 4

Absorptive capacity refers to the ability of an enterprise to identify,value,assimilate,and use new knowledge.

Accepted Answer

Absorptive capacity refers to an enterprise's ability to learn from external sources and incorporate that knowledge into its operations. It involves identifying relevant knowledge, valuing it, assimilating it, and finally using it to improve the organization's performance.

Question 5

Donna can make a chair for about $100,she charges customers $150 to buy the chair,and customers perceive that the chair is worth $225.Donna's profit margin is
A)$50.
B)$75.
C)$100.
D)$150.
E)$225.

Accepted Answer

The answer of Donna can make a chair for about...

Question 6

IBM's investment in mainframe computers is an example of a prior strategic commitment.

Accepted Answer

A prior strategic commitment refers to a decision made by a company to invest in a particular technology or product line, often at a significant cost, with the expectation of future returns. IBM's investment in mainframe computers, which began in the 1960s and continues to this day, is a classic example of a prior strategic commitment.

Question 7

Benchmarking is a practice in which a company's performance is compared against that of competitors and the historic performance of the company itself.

Accepted Answer

Benchmarking involves comparing a company's performance to that of competitors and also to its own past performance, with the goal of identifying areas for improvement and increased efficiency.

Question 8

Which of the following is not true regarding a company's distinctive competencies?
A)They represent the unique strengths of the company.
B)They refer to company strengths that competitors cannot easily match or imitate.
C)They form the bedrock of a company's strategy.
D)They can be based in any of the value creation functions of the company.
E)They are shared by many firms in an industry.

Accepted Answer

Distinctive competencies are unique strengths of a company that are not easily replicated by competitors. Therefore, they are not shared by many firms in the industry.

Question 9

Capabilities are defined as a company's
A)physical plant and equipment.
B)technological know-how.
C)skills at coordinating resources and putting them to productive use.
D)reputation.
E)resources.

Accepted Answer

Capabilities refer to a company's ability to coordinate resources, including physical plant and equipment, technological know-how, skills, and reputation, and put them to productive use. While all of the options listed can contribute to a company's capabilities, the best choice is C, as it encompasses the others and specifically emphasizes the ability to coordinate resources.

Question 10

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

Accepted Answer

With the rise of e-commerce and global supply chains, customers now demand high levels of reliability and consistency in product quality and delivery. Companies that can deliver on these expectations can gain a competitive advantage over those that cannot.

Question 11

Patents typically provide the greatest barrier to imitation.

Accepted Answer

The answer of Patents typically provide the greatest barrier to...

Question 12

Donna can make a chair for about $100,she charges customers $150 to buy the chair,and customers perceive that the chair is worth $225.In this case,the consumer surplus is
A)$50.
B)$75.
C)$100.
D)$150.
E)$225.

Accepted Answer

Consumer surplus is the difference between what a customer is willing to pay (their perceived value) and what they actually pay. In this case, the customer perceives the chair to be worth $225, but they only have to pay $150. Therefore, the consumer surplus is $225 - $150 = $75.

Question 13

The intellectual property of an organization is a(n)
A)tangible resource.
B)tangible competence.
C)tangible capability.
D)intangible capability.
E)intangible resource.

Accepted Answer

Intellectual property refers to ideas and concepts that are owned by an organization, such as patents, copyrights, trademarks, and trade secrets. These are intangible assets that provide value to the organization, but cannot be physically touched or seen. Therefore, the best choice is E - intangible resource.

Question 14

Factors that help a company to build and sustain competitive advantage include which of the following?
A)Superior efficiency
B)Product quality
C)Innovation
D)Customer responsiveness
E)All of these choices

Accepted Answer

Superior efficiency, product quality, innovation, and customer responsiveness are all factors that contribute to building and sustaining competitive advantage. A company that excels in these areas is more likely to stand out from competitors and maintain a strong market position. Therefore, all of these choices are important for a company to focus on in order to achieve and sustain competitive advantage.

Question 15

The most successful firms are those that constantly learn and upgrade their distinctive competencies.

Accepted Answer

Successful firms understand the importance of constantly learning and upgrading their distinctive competencies to stay ahead of the competition and maintain their success. This is a key component of strategic management and business success.

Question 16

Competitive advantage is based on
A)distinctive competencies.
B)economic forces external to a company.
C)lack of government regulations controlling a firm's ability to make rapid adjustments in response to its changing environment.
D)all of these choices
E)none of these choices.

Accepted Answer

Competitive advantage is based on distinctive competencies, which are unique strengths or abilities that allow a company to outperform its competitors. These could include things like efficient distribution channels, superior technology, or a strong brand reputation. Economic forces external to a company and government regulations may impact a company's ability to leverage its distinctive competencies, but they are not the foundation of competitive advantage.

Question 17

Capabilities refer to a company's
A)tangible resources.
B)intangible resources.
C)skills at coordinating its resources and putting them to productive use.
D)strategy as expressed in the firm's business model.
E)policies.

Accepted Answer

Capabilities refer to a company's ability to coordinate its resources and put them to productive use. This includes not only tangible and intangible resources but also the skills and expertise of its employees in utilizing those resources effectively. Strategy and policies are related concepts but are not the same as capabilities.

Question 18

Resources
A)are the tangible assets available to a company.
B)can be tangible or intangible.
C)are harder for a company to copy than capabilities are.
D)are the products of a company's control systems.
E)refer to an organization's skills.

Accepted Answer

Resources can be tangible or intangible, including things like physical assets, financial resources, intellectual property, and human resources.

Question 19

Taken together,factors such as existing strategic commitments and low absorptive capacity limit the ability of established competitors to imitate the competitive advantage of a rival.

Accepted Answer

Existing strategic commitments and low absorptive capacity can make it difficult for established competitors to quickly and effectively imitate a rival's competitive advantage.

Question 20

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

Accepted Answer

Quality as excellence and quality as reliability can be applied to both goods and services.

Quiz 3: Internal Analysis: Distinctive Competencies, Competitive Advantage, and Profitability

Brad has developed a new,improved irrigation procedure for use in his apple orchard.Brad is creating a product innovation.

The Icarus paradox suggests that those factors that led to a company's success may ultimately lead to their failure.

Competitive advantage typically leads to

Absorptive capacity refers to the ability of an enterprise to identify,value,assimilate,and use new knowledge.

Donna can make a chair for about $100,she charges customers $150 to buy the chair,and customers perceive that the chair is worth $225.Donna's profit margin is

IBM's investment in mainframe computers is an example of a prior strategic commitment.

Benchmarking is a practice in which a company's performance is compared against that of competitors and the historic performance of the company itself.

Which of the following is not true regarding a company's distinctive competencies?

Capabilities are defined as a company's

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

Patents typically provide the greatest barrier to imitation.

Donna can make a chair for about $100,she charges customers $150 to buy the chair,and customers perceive that the chair is worth $225.In this case,the consumer surplus is

The intellectual property of an organization is a(n)

Factors that help a company to build and sustain competitive advantage include which of the following?

The most successful firms are those that constantly learn and upgrade their distinctive competencies.

Competitive advantage is based on

Capabilities refer to a company's

Resources

Taken together,factors such as existing strategic commitments and low absorptive capacity limit the ability of established competitors to imitate the competitive advantage of a rival.

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