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Chapter 04 Internal Analysis: Resources, Capabilities, and Core
Competencies Answer Key
Multiple Choice Questions
1.
Beats Electronics has been able to outperform Audio-Technica, Bose, JBL, Skullcandy,
Sennheiser, and Sony in the high-end, premium headphone market. Which of the following
statements accurately explains one of the main reasons for the success of Beat?
2.
_____ are best described as unique strengths, embedded deep within a firm, that allow a
firm to differentiate its products and services from those of its rivals, creating higher value
for the customer or offering products and services of comparable value at lower cost.
3.
Dandelions Max is a consumer electronics company. It has acquired an edge over its
competitors through its ability to provide breakthrough technology at the lowest price in
the market. This advantage of Dandelions Max best exemplifies a
4.
Organizational and managerial skills that find their expression in a company's structure,
routines, and culture are referred to as
5.
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
6.
Which of the following is an example of a firm's resources?
7.
The management of a company is assessing the value of all the tangible resources the
company owns. Which of the following will be included in this assessment?
8.
Which of the following is an example of a firm's intangible resources?
9.
Smooth Fusion Inc. is a software company, which has built and acquired numerous assets
over the years. According to the resource-based view of a firm, which of the following
assets of Smooth Fusion Inc. will best enable it to gain and sustain a competitive
advantage?
10.
Which of the following statements accurately brings out the difference between tangible
and intangible resources?
11.
GN Corp. and BC Inc. are two competing firms in the same industry. GN Corp.'s tangible
assets are valued at $15 billion and its intangible assets are valued at $35 billion. BC Inc.'s
tangible assets are valued at $5 billion and its intangible assets are valued at $45 billion.
What can be concluded from this information?
12.
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?
13.
Intangible assets add great value to a firm primarily because the firm's
14.
Home Value Inc., Max Cart Inc., and Nice Necessities Inc. are three consumer-product
retailing companies. Their products consist primarily of day-to-day items that are easy to
imitate and sell. All three companies use the same resources and capabilities in the
production and distribution of their products. Which of the following is an implication of
the market condition indicated in this scenario?
15.
The resource-based view of a firm assumes that the
16.
Although True Ion Inc. and One Electro Inc. operate in the same consumer electronic
industry, True Ion Inc. has better sales and brand equity. This is attributed to True Ion
Inc.'s commitment to innovation. The company has adequate financial and human capital
to invest in research and development, an area in which One Electro Inc. lacks. In this
scenario, which of the following critical assumptions of the resource-based view of a firm
has been illustrated?
17.
As a result of _____, a critical assumption in the resource-based model of a firm, the
resource differences that exist between firms are difficult to replicate.
18.
Kaleidoscope Inc. is a leading international apparel company. Competitors across the
globe have failed to imitate Kaleidoscope Inc.'s production models, supply chain systems,
knowledge systems, and culture. These attributes have remained unique to Kaleidoscope
Inc. for a long time. Which of the following assumptions of the resource-based model of
competitive advantage does this scenario best illustrate?
19.
In the context of the resource-based model of competitive advantage, if a successful firm
exhibits resource immobility it means that the
20.
Due to resource immobility, a critical assumption in the resource-based model of a firm,
the
21.
Trust Machines Inc. is a company that manufactures and markets consumer electronics.
The unique microprocessors developed by the company contribute to its high resource
immobility. According to the resource-based view of competitive advantage, which of the
following is an implication of this situation?
22.
In the context of the resource-based model of competitive advantage, which of the
following scenarios best exemplifies resource immobility?
23.
The perfectly competitive industry structure differs from the resource-based model in its
view that
24.
How are the critical assumptions of the resource-based model of a firm fundamentally
different from the way in which a firm is viewed in the perfectly competitive industry
structure?
25.
The competitive advantage that one firm has will be short-lived in an industry where
26.
Crystal Tech Inc.'s competency in designing and manufacturing efficient microprocessors
has made its laptops the most advanced computers in the market. This competency, along
with the just-in-time manufacturing system, has enabled Crystal Tech Inc. to increase its
profitability by lowering its production costs. Thus, Crystal's competency in designing and
manufacturing microprocessors will be considered a(n) _____ resource in the VRIO
framework.
27.
If a resource is common
28.
Gene Craft Inc. is the market leader in the pharmaceutical industry. Though most of its
resources are common to those of its competitors, a few rare resources have helped the
company gain and sustain a competitive advantage. Which of the following assets of Gene
Craft Inc. is most likely to be considered a rare resource that is best contributing to its
competitive advantage?
