Question 1

Although an organization's good reputation is a valuable resource that takes years of superior marketplace competence to achieve, it is not a good basis for building a competitive advantage because it can be destroyed almost instantly by bad publicity.

Accepted Answer

False

Question 2

The foundation of many capabilities lies in the unique skills and knowledge of a firm's employees.

Accepted Answer

The skills and knowledge of a firm's employees form the foundation for many capabilities such as innovation, creativity, problem-solving, and customer service.

Question 3

People are a critical resource for helping organizations learn how to continuously innovate.

Accepted Answer

People bring diverse perspectives, skills, and knowledge which can help organizations to continuously innovate by contributing to the development and implementation of new ideas and processes.

Question 4

Firms should seek to continually develop new core competencies because all core competencies have limited life spans.

Accepted Answer

Core competencies are the unique capabilities or resources that a firm possesses which enable it to differentiate itself from its competitors and create value for its customers. However, these competencies are not permanent and can be imitated or become obsolete over time. Therefore, firms should continuously develop new core competencies to remain competitive in the long run.

Question 5

Creating customer value is the source of the firm's potential to earn above-average returns.

Accepted Answer

Creating customer value is a key factor in achieving competitive advantage, which in turn leads to the potential to earn above-average returns.

Question 6

Valuable capabilities allow the firm to exploit strengths or neutralize weaknesses in the internal environment.

Accepted Answer

The answer of Valuable capabilities allow the firm to exploit...

Question 7

The more core competencies a firm has, the more likely it is to generate a sustained competitive advantage.

Accepted Answer

The answer of The more core competencies a firm has,...

Question 8

Resources are bundled to create capabilities which in turn are the source of core competencies which are then the basis of competitive advantages.

Accepted Answer

This is the correct sequence of how resources ultimately lead to a company's competitive advantage.

Question 9

Value is created when the firm exploits its core competencies or competitive advantages to meet or exceed the demanding standards of global competition.

Accepted Answer

Value is created when a firm leverages its unique capabilities or competitive strengths to satisfy or surpass global competition's high standards.

Question 10

Judgment is the capability of making successful decisions when no obviously correct model or rule is available or when relevant data are unreliable or incomplete.

Accepted Answer

This statement correctly defines judgment as the ability to make sound decisions even when faced with incomplete or unreliable information.

Question 11

Capabilities are often developed in specific functional areas such as manufacturing, R&D, and marketing.

Accepted Answer

Capabilities are often developed in specific functional areas such as manufacturing, research and development (R&D), and marketing.

Question 12

The sustainability of a competitive advantage depends upon the imitability of the core competence, the availability of substitutes for the core competence, and the rate of obsolescence of the core competence.

Accepted Answer

This statement is true. The sustainability of a competitive advantage is determined by several factors, including the ability of competitors to imitate a company's core competence, the availability of alternative products or services, and the rate of technological or market changes that could make a core competence obsolete.

Question 13

Coca-Cola's brand name is a tangible source of competitive advantage for the company.

Accepted Answer

The answer of Coca-Cola's brand name is a tangible source...

Question 14

GE was effective in developing its human capital, but failed in transferring that knowledge throughout the organization.

Accepted Answer

The answer of GE was effective in developing its human...

Question 15

The need to meet quarterly earnings numbers disciplines managers to accurately examine the firm's internal organization.

Accepted Answer

The answer of The need to meet quarterly earnings numbers...

Question 16

Core competencies are the activities a company performs especially well compared with competitors and through which the firm adds unique value to its goods and services.

Accepted Answer

This statement accurately describes what core competencies are.

Question 17

Analyzing the internal environment enables a firm to determine what it can do by identifying what opportunities exist.

Accepted Answer

Analyzing the internal environment helps a firm understand its strengths and weaknesses, which in turn allows them to identify opportunities and threats in the external environment. Therefore, by identifying what it can do, the firm can make strategic decisions that leverage its strengths while addressing its weaknesses to take advantage of opportunities.

Question 18

In the global economy, traditional factors such as labor costs, access to financial resources and raw materials, and protected or regulated markets are no longer sources of competitive advantage.

Accepted Answer

The answer of In the global economy, traditional factors such...

Question 19

Some resources, such as financial capital, have inherent value to the firm, while others are not inherently valuable.

Accepted Answer

The answer of Some resources, such as financial capital, have...

Question 20

Value is measured by the variable and fixed costs associated with the production and marketing of a particular product compared with the revenue and profits the product generates.

Accepted Answer

The answer of Value is measured by the variable and...

Quiz 3: The Internal Organization Resources, Capabilities, Core Competencies, and Competitive Advantages