Test Bank For Theory of Strategic Management International Edition 10th Edition by Gareth Jones

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Test Bank For Theory of Strategic Management International Edition 10th Edition by Gareth Jones

Chapter 3—Internal Analysis: Distinctive Competencies, Competitive Advantage, and Profitability

TRUE/FALSE

1.Internal analysis is concerned with identifying a company’s opportunities and weaknesses.

ANS:FPTS:1DIF:Easy

OBJ: 1 – Discuss the source of competitive advantage NAT: AACSB Analytic | Stategy

KEY: Knowledge

2.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.

ANS:TPTS:1DIF:Easy

OBJ: 1 – Discuss the source of competitive advantage NAT: AACSB Analytic | Strategy

KEY: Knowledge

3.If a company’s profitability is higher than the industry average, it has a competitive advantage.

ANS:TPTS:1DIF:Easy

OBJ: 1 – Discuss the source of competitive advantage NAT: AACSB Analytic | Strategy

KEY: Knowledge

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

ANS:TPTS:1DIF:Moderate

OBJ: 1 – Discuss the source of competitive advantage NAT: AACSB Analytic | Strategy

KEY: Knowledge

5.Toyota’s lean production system is the basis of its competitive advantage.

ANS:TPTS:1DIF:Difficult

OBJ:1 – Discuss the source of competitive advantage

NAT: AACSB Reflective Thinking | Strategy KEY: Application

6.All resources are tangible; there is no such thing as intangible resources.

ANS:FPTS:1DIF:Easy

OBJ: 1 – Discuss the source of competitive advantage NAT: AACSB Analytic | Strategy

KEY: Knowledge

7.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.

ANS:TPTS:1DIF:Moderate

OBJ: 1 – Discuss the source of competitive advantage NAT: AACSB Analytic | Strategy

KEY:Comprehension

8.According to Rose Marie Bravo of Burberry, creative ideas may come from a number of sources, but not from the accounting department, for good reasons.

ANS:FPTS:1DIF:Moderate

OBJ: 1 – Discuss the source of competitive advantage NAT: AACSB Analytic | Strategy

KEY: Knowledge

9.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.

ANS:FPTS:1DIF:Moderate

OBJ:1 – Discuss the source of competitive advantage

NAT: AACSB Analytic | Creation of Value KEY: Comprehension

10.The more utility a company creates for its customers, the more flexibility it has in determining prices.

ANS:TPTS:1DIF:Moderate

OBJ:1 – Discuss the source of competitive advantage

NAT: AACSB Analytic | Creation of Value KEY: Comprehension

11.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.

ANS:TPTS:1DIF:Moderate

OBJ: 1 – Discuss the source of competitive advantage NAT: AACSB Analytic | Strategy

TOP: Knowledge

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

ANS:FPTS:1DIF:Moderate

OBJ: 1 – Discuss the source of competitive advantage NAT: AACSB Analytic | Strategy

KEY:Comprehension

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

ANS:TPTS:1DIF:Easy

OBJ:3 – Explain the concept of the value chain

NAT: AACSB Analytic | Creation of Value KEY: Knowledge

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

ANS:TPTS:1DIF:Moderate

OBJ:3 – Explain the concept of the value chain

NAT: AACSB Reflective Thinking | Creation of Value KEY: Application

15.Walmart pursues a low cost operator policy.

ANS:TPTS:1DIF:Moderate

OBJ:3 – Explain the concept of the value chain

NAT: AACSB Reflective Thinking | Creation of Value KEY: Application

16.The building blocks of competitive advantage are efficiency, quality, innovation, and profitability.

ANS:FPTS:1DIF:Moderate

OBJ: 2 – Identify and explore the role of efficiency, quality, innovation, and customer responsiveness in building and maintaining a competitive advantage NAT: AACSB Analytic | Strategy

KEY: Knowledge

17.Employee productivity is a common measure of efficiency.

ANS:TPTS:1DIF:Easy

OBJ: 2 – Identify and explore the role of efficiency, quality, innovation, and customer responsiveness in building and maintaining a competitive advantage NAT: AACSB Analytic | Strategy

KEY: Knowledge

18.Imitating a company’s capabilities tends to be more difficult than imitating its tangible and intangible resources.

ANS:TPTS:1DIF:Moderate

OBJ: 5 – Explain what impacts the durability of a company’s competitive advantage

NAT:AACSB Analytic | StrategyKEY:Comprehension

19.Patents typically provide the greatest barrier to imitation.

ANS:FPTS:1DIF:Difficult

OBJ: 5 – Explain what impacts the durability of a company’s competitive advantage

NAT:AACSB Analytic | StrategyKEY:Comprehension

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

ANS:TPTS:1DIF:Easy

OBJ: 5 – Explain what impacts the durability of a company’s competitive advantage

NAT: AACSB Analytic | Strategy KEY: Knowledge

21.Unfortunately, quality as excellence and quality as reliability are concepts that apply to goods but not services.

ANS:FPTS:1DIF:Moderate

OBJ: 2 – Identify and explore the role of efficiency, quality, innovation, and customer responsiveness in building and maintaining a competitive advantage NAT: AACSB Analytic | Strategy

KEY: Knowledge

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

ANS:TPTS:1DIF:Easy

OBJ: 2 – Identify and explore the role of efficiency, quality, innovation, and customer responsiveness in building and maintaining a competitive advantage NAT: AACSB Analytic | Strategy

KEY: Knowledge

23.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.

ANS:TPTS:1DIF:Moderate

OBJ: 5 – Explain what impacts the durability of a company’s competitive advantage

KEY:Comprehension

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

ANS:TPTS:1DIF:Difficult

OBJ: 5 – Explain what impacts the durability of a company’s competitive advantage

NAT: AACSB Reflective Thinking | Strategy KEY: Application

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

ANS:TPTS:1DIF:Easy

OBJ: 5 – Explain what impacts the durability of a company’s competitive advantage

NAT: AACSB Analytic | Strategy KEY: Knowledge

26.The Icarus paradox suggests that those factors that led to a company’s success will continue in the future becuase the competitors cannot imitate them.

ANS:FPTS:1DIF:Moderate

OBJ: 5 – Explain what impacts the durability of a company’s competitive advantage

NAT: AACSB Analytic | Strategy KEY: Knowledge

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

ANS:TPTS:1DIF:Easy

OBJ: 5 – Explain what impacts the durability of a company’s competitive advantage

NAT: AACSB Analytic | Strategy KEY: Knowledge

28.Lucy is an entreprenuer 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.

ANS:FPTS:1DIF:Difficult

OBJ:1 – Discuss the source of competitive advantage

NAT: AACSB Reflective Thinking | Strategy KEY: Application

29.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.

ANS:TPTS:1DIF:Difficult

OBJ:2 – Identify and explore the role of efficiency, quality, innovation, and customer responsiveness in building and maintaining a competitive advantage

NAT: AACSB Reflective Thinking | Creation of Value KEY: Application

30.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.

ANS:TPTS:1DIF:Moderate

OBJ:2 – Identify and explore the role of efficiency, quality, innovation, and customer responsiveness in building and maintaining a competitive advantage

NAT: AACSB Reflective Thinking | Strategy KEY: Application