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Path dependence rests on the notion that


A) time cannot be compressed at will.
B) strategic decisions are easily reversible.
C) rare resources can be built in a short period of time.
D) competitive advantage can be sustained indefinitely.

E) B) and D)
F) None of the above

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With regard to the VRIO framework,Crocs Shoes was unable to sustain its competitive advantage primarily because its products were


A) invaluable and common.
B) easy to imitate.
C) extremely expensive.
D) non-substitutable.

E) None of the above
F) A) and D)

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Coral Think Inc.is a new company in the publishing industry.It has raised sufficient capital from multiple sources.It is planning to use its capital to purchase certain assets.Which of the following assets will be the most difficult for Coral Think Inc.to acquire using its capital?


A) inventory
B) tools and equipment
C) land and building
D) brand name

E) A) and C)
F) C) and D)

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D

_____ describes a firm's ability to create,deploy,modify,reconfigure,upgrade,or leverage its resources over time in its quest for competitive advantage.


A) Dynamic capability
B) Resource immobility
C) Resource heterogeneity
D) Time compressed diseconomy

E) C) and D)
F) B) and D)

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Which of the following statements accurately brings out the difference between tangible and intangible resources?


A) Tangible resources contribute to a company's competitive advantage, whereas intangible resources fail to do the same.
B) Tangible assets can be bought on the open market, whereas intangible assets cannot be easily purchased.
C) Tangible resources take a longer time to build, whereas intangible assets can be built comparatively easily.
D) Tangible assets are difficult to imitate, whereas intangible assets can be easily replicated.

E) All of the above
F) A) and B)

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Which of the following is an implication of high employee turnover in a company?


A) It results in a reduction in the company's intangible-resource stocks.
B) It makes the source of the company's competitive advantage causally ambiguous.
C) It makes the source of the company's competitive advantage socially complex.
D) It results in greater immobility and heterogeneity of the company's resources.

E) B) and C)
F) B) and D)

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A

Intangible assets add great value to a firm primarily because the firm's


A) reputation and brand equity are accumulated quickly and can be leveraged easily.
B) knowledge and culture take time to develop and are generally difficult to imitate.
C) tangible assets require a higher degree of capital than its intangible assets.
D) capabilities are by nature typically tangible.

E) C) and D)
F) A) and B)

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True Moto Corp.(TMC) is a leading automobile company.The company has been able to sustain its competitive advantage primarily due to its high-quality and efficient electric motors.Most of its competitors have failed to develop similar electric motors at a reasonable price.Which of the following resource attributes listed in the VRIO framework has helped TMC sustain its competitive advantage?


A) resource mobility
B) inexhaustible nature
C) intangibility of the company's resource
D) high costs involved in imitation

E) None of the above
F) A) and B)

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Each activity a firm performs along the horizontal value chain adds _____ value.


A) temporary
B) little
C) incremental
D) absolute

E) A) and B)
F) A) and C)

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Due to resource immobility,a critical assumption in the resource-based model of a firm,the


A) competitive advantage of a firm exists for a short period of time.
B) resource bundles of a firm can be easily imitated by competitors.
C) resource differences between firms last for a long time.
D) competencies and capabilities of all firms in an industry are similar.

E) A) and D)
F) A) and C)

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Which of the following accurately summarizes the difference between the resources and capabilities of a firm?


A) Resources are tangible; capabilities are tangible and intangible.
B) Resources are intangible; capabilities are tangible.
C) Resources are tangible and intangible; capabilities are intangible.
D) Resources are tangible; capabilities are intangible.

E) B) and C)
F) A) and D)

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C

Chat Zone Inc.,a telecommunication company,had been drastically losing its market share due to tough competition in the industry.The management hired a reputed consulting firm to advice the company.The experts from the consulting firm pointed out that the company primarily lost out on its competitive advantage due to its tedious internal policies and procedures.These ineffective policies and procedures made the company operations,marketing,and after-sales service inefficient.Chat Zone Inc.can best solve its problem by working on its


A) immobile assets.
B) support activities.
C) resource flows.
D) resource stocks.

E) All of the above
F) A) and B)

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Which of the following is a drawback of the SWOT analysis?


A) The SWOT analysis takes into account only the internal environment of a firm, ignoring the equally important external environment.
B) This framework is only applicable to the manufacturing industries; it is ineffective when applied to the service firms.
C) A problem with this framework is that a strength can also be a weakness, and that an opportunity can also simultaneously be a threat.
D) A drawback of this framework is that it allows managers to merely evaluate a firm's current situation, and not its future prospects.

E) None of the above
F) B) and C)

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In knowledge-intensive industries,the marginal costs after initial invention are


A) low.
B) high.
C) moderate.
D) unpredictable.

E) None of the above
F) B) and D)

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GreenHarvest Inc.has used $350,000 from its total annual earnings of $1,250,000 to invest in the research and development of a multi-purpose vaccine.Its account receivable from customers is estimated to be $150,000 and accounts payable $80,000.In monetary terms,what would GreenHarvest Inc.'s resource flows be?


A) $1,250,000
B) $150,000
C) $80,000
D) $350,000

E) A) and D)
F) A) and C)

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Onyxo Inc.,a consumer electronics company,is the leading manufacturer of LCD televisions.LCD technology has been its core competency and the company holds 80 percent shares in that market.However,Onyxo Inc.'s competitors have now moved on to advance technologies like LED and 3-D televisions.According to the dynamic capabilities perspective,what should Onyxo Inc.do?


A) Onyxo Inc. should start working on LED and 3-D television technologies to adapt its core competency to suit the external environment.
B) Onyxo Inc. should stick to its existing core competency, that is LCD technology, as it is the best in that segment.
C) Onyxo Inc. should take proactive steps to reduce the causal ambiguity and socially complexity of its core competency.
D) Onyxo Inc. should work on enhancing the mobility of its core competency.

E) All of the above
F) C) and D)

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Amazon.com's ability to provide the largest selection of items online,combined with superior IT systems and customer service,can be referred to as its


A) equity reserve.
B) economic equity.
C) core competency.
D) capital gain.

E) A) and D)
F) A) and B)

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A resource-based view of a firm provides a model that systematically aids in identifying


A) related competencies.
B) core competencies.
C) competitive disadvantage.
D) competitive parity.

E) A) and B)
F) A) and C)

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Rice Dazzle Inc.has been making the same breakfast cereal for 50 years.Recently,sales have plummeted.To counteract this,the company created a new package that included an endorsement by a celebrity.As a result,sales increased close to previous highs.However,the cereal itself remained the same.According the VRIO framework,is the new packaging a valuable resource for Rice Dazzle?


A) Yes, because the new packaging has an endorsement by a celebrity.
B) Yes, because the new packaging made the product more attractive in the eyes of consumers.
C) No, because the new packaging did not improve the product itself.
D) No, because the new packaging did help to not increase sales past the previous high for sales.

E) All of the above
F) C) and D)

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Which of the following management tools will help determine whether a firm's resources,capabilities,and competencies are strengths or weaknesses?


A) Porter's five forces analysis
B) PESTEL analysis
C) VRIO framework
D) Ansoff's matrix

E) B) and D)
F) B) and C)

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