Question 1

Superlative Productions spent 10 million dollars to buy the rights to a best-selling novel.The company then prepared for production by hiring a screenwriter to adapt the novel,casting the main roles,renting cameras and other equipment,and scouting locations in southern Arizona.Which of the following pairs of resources are both intangible?
A) money spent to buy rights of novel; screenwriter's experience adapting novels
B) money spent to buy rights for the novel; locations in southern Arizona
C) best-selling novel; locations in southern Arizona
D) best-selling novel; screenwriter's experience adapting novels

Accepted Answer

The best-selling novel is intellectual property and therefore is an intangible resource. Also, a worker's experience is an intangible resource.

Question 2

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

Accepted Answer

Whether a firm's resources, capabilities, and competencies are strengths or weaknesses can be determined by applying the VRIO framework. External opportunities and threats are in the firm's general environment and can be captured by PESTEL and Porter's five forces analyses.

Question 3

Which of the following describes a situation in which firms acquire resources at a low cost,laying the foundation for a competitive advantage later?
A) better expectations of future resource value
B) path dependence limiting current decisions
C) causal ambiguity
D) social complexity

Accepted Answer

Better expectations of future resource value describes a situation in which firms acquire resources at a low cost, which lays the foundation for a competitive advantage later.

Question 4

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.

Accepted Answer

Resources are tangible and intangible; capabilities are intangible.

Question 5

In the context of SWOT analysis,a firm can develop an offensive strategic option primarily by
A) combining an internal weakness with an external threat.
B) leveraging its internal strengths to minimize external threats.
C) leveraging an external opportunity to overcome an internal threat.
D) using its internal strengths to exploit external opportunities.

Accepted Answer

In the context of SWOT analysis, a firm can develop an offensive strategic option primarily by using its internal strengths to exploit external opportunities. In the SWOT matrix, firms focus on the Strengths-Opportunities quadrant to derive "offensive" alternatives by using an internal strength in order to exploit an external opportunity.

Question 6

In the context of the SWOT matrix,which of the following best exemplifies a firm's internal strength?
A) increase in a firm's customer loyalty
B) growth in the size of the market in which a firm operates
C) rise in the income of the demographic segment to which a firm caters
D) loss of a competitor's reputation

Accepted Answer

The increase in a firm's customer loyalty best exemplifies a firm's internal strength. Strengths and weaknesses are internal to an organization, whereas opportunities and threats are external to the organization.

Question 7

According to the VRIO framework,a firm can gain a competitive advantage if it has resources that are _____ and captured by an organized firm.
A) varied, refined, costly to introduce
B) valuable, refined, costly to introduce
C) valuable, rare, costly to imitate
D) varied, rare, costly to imitate

Accepted Answer

According to the VRIO framework, a firm can gain a competitive advantage if it has resources that are: valuable, rare, costly to imitate, and captured by an organized firm.

Question 8

In the context of SWOT analysis,which of the following best exemplifies a firm's internal weakness?
A) fall in the purchasing power of the firm's customers
B) increased competition in the industry where the firm operates
C) irregularity in the raw materials supply throughout the industry
D) decline in the firm's market share

Accepted Answer

In the context of SWOT analysis, decline in a firm's market share best exemplifies a firm's internal weakness. Strengths and weaknesses are internal to an organization, whereas opportunities and threats are external to the organization.

Question 9

_____ allows managers to synthesize insights obtained from an internal analysis of a company's strengths and weaknesses with those from an analysis of external opportunities and threats.
A) The VRIO framework
B) The SWOT analysis
C) The break-even analysis
D) Ansoff's matrix

Accepted Answer

SWOT analysis is a framework that allows managers to synthesize insights obtained from an internal analysis of the company's strengths and weaknesses (S and W) with those from an analysis of external opportunities and threats (O and T).

Question 10

In the context of SWOT analysis,which of the following best exemplifies a firm's external opportunity?
A) an increase in its financial resources
B) an increase in its brand equity
C) an increase in its customers' disposable income
D) an increase in its employee productivity

Accepted Answer

In the context of SWOT analysis, an increase in its customers' disposable income best exemplifies a firm's external opportunity. Strengths and weaknesses are internal to an organization, whereas opportunities and threats are external to the organization.

Question 11

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.

Accepted Answer

According to the VRIO framework, a resource is valuable if it helps a firm increase the perceived value of its product or service in the eyes of consumers.

Question 12

Apple paid $3 billion dollars to acquire Beats.This is the largest acquisition in Apple's history.Which of the following provides a reason for this acquisition?
A) the movement in the music industry from renting works to buying works to own
B) the need for Apple to create an image as a leader in technical audio research
C) the change in content delivery from ownership via downloads to streaming on demand
D) the demand for the extremely high-quality headphones that Beat produced

Accepted Answer

Two main reasons spurred Apple's acquisition of Beats. First, Apple hoped that some of Beats' coolness would spill over to its brand, which had become somewhat stale. Second, content delivery, especially in music, was moving rapidly from ownership via downloads to streaming on demand. Apple was hoping that by acquiring Beats Electronics it could become a leader in the music streaming space.

Question 13

Which of the following applies to the Strength-Threats quadrant of the SWOT matrix?
A) The local fast-food chain Easy Hot Dogs expanded its limited menu to maintain its advantage against stiff competition.
B) The local fast-food chain Easy Hot Dogs added a salad bar to maintain its competitive advantage against stiff competition.
C) The local fast-food chain Easy Hot Dogs used its wholesome image to maintain its competitive advantage against stiff competition.
D) The local fast-food chain Easy Hot Dogs revised its image of being a cheap-food place to being a wholesome family place in order to maintain its competitive advantage against stiff competition.

Accepted Answer

The Strength-Threats quadrant of the SWOT matrix uses an external strength, such as a wholesome image, to minimize the effect of an external threat, such as stiff competition.

Question 14

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.

Accepted Answer

Although the SWOT analysis is a widely used management framework, however, a word of caution is in order. A problem with this framework is that a strength can also be a weakness, and that an opportunity can also simultaneously be a threat.

Question 15

Juanita,a manager at a multinational organization,is trying to carefully scan and link the firm's internal environment to its external environment.The insights from this analysis will allow her to effectively leverage the company's internal strengths to exploit external opportunities,while mitigating internal weaknesses and external threats.In this scenario,which of the following managerial tools is Juanita employing?
A) Blake Mouton managerial grid
B) Ansoff's matrix
C) BCG analysis
D) SWOT analysis

Accepted Answer

In this scenario, Juanita is using the SWOT analysis. SWOT analysis is a framework that allows managers to synthesize insights obtained from an internal analysis of the company's strengths and weaknesses (S and W) with those from an analysis of external opportunities and threats (O and T).

Question 16

Which of the following provides an example of how a firm's valuable resource can be imitated?
A) To compete with Build Your Own's model of the Eiffel Tower, Best Replica came out with a model of a sports car.
B) To compete with Build Your Own's model of the Eiffel Tower, Best Replica came out with a model of the Leaning Tower of Pisa.
C) To compete with Build Your Own's model of the Eiffel Tower, Best Replica came out with a model of the U.S.S. Enterprise aircraft carrier.
D) To compete with Build Your Own's model of the Eiffel Tower, Best Replica came out with a model of a grizzly bear.

Accepted Answer

A competing firm can succeed in imitating another firm's valuable resource by directly imitating the resource in question (direct imitation) or through working around it to provide a comparable product or service (substitution). So Best Replica imitated Build Your Own's model of the Eiffel Tower by coming out with a comparable product, namely a model of another landmark-the Leaning Tower of Pisa.

Question 17

Which of the following statements correctly describes resource heterogeneity?
A) Bundles of resources, capabilities, and competencies differ temporarily across firms.
B) Bundles of resources, capabilities, and competencies are mostly the same across firms.
C) Bundles of resources, capabilities, and competencies differ across firms.
D) Bundles of resources, capabilities and competencies are all the same across firms.

Accepted Answer

Resource heterogeneity means that bundles of resources, capabilities, and competencies differ across firms.

Question 18

SWA has enjoyed a sustained competitive advantage,allowing it to outperform its competitors over several decades.Continental and Delta attempted to copy SWA with their offerings of Continental Lite and Song,respectively.Neither Continental nor Delta,however,was able to successfully imitate the resource bundles and firm capabilities that make SWA unique.Which of the following is this case an example of?
A) resource immobility
B) resource heterogeneity
C) resource mobility
D) resource homogeneity

Accepted Answer

This case is an example of resource immobility. Resources tend to be "sticky" and don't move easily from firm to firm. As a result, Continental and Delta were both unable to successfully copy SWA.

Question 19

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.

Accepted Answer

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

Question 20

To make the SWOT analysis an effective management tool,a strategist must first
A) distinguish a firm's resources, competencies, and capabilities from each other.
B) separate a firm's primary activities from support activities.
C) analyze the pros and cons of strategic options.
D) scan a firm's internal and external environments.

Accepted Answer

To make the SWOT analysis an effective management tool, a strategist must first conduct a thorough external and internal analysis.

Quiz 4: Internal Analysis: Resources, Capabilities, and Core Competencies

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

Which of the following describes a situation in which firms acquire resources at a low cost,laying the foundation for a competitive advantage later?

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

In the context of SWOT analysis,a firm can develop an offensive strategic option primarily by

In the context of the SWOT matrix,which of the following best exemplifies a firm's internal strength?

According to the VRIO framework,a firm can gain a competitive advantage if it has resources that are _____ and captured by an organized firm.

In the context of SWOT analysis,which of the following best exemplifies a firm's internal weakness?

_____ allows managers to synthesize insights obtained from an internal analysis of a company's strengths and weaknesses with those from an analysis of external opportunities and threats.

In the context of SWOT analysis,which of the following best exemplifies a firm's external opportunity?

Apple paid $3 billion dollars to acquire Beats.This is the largest acquisition in Apple's history.Which of the following provides a reason for this acquisition?

Which of the following applies to the Strength-Threats quadrant of the SWOT matrix?

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

Which of the following provides an example of how a firm's valuable resource can be imitated?

Which of the following statements correctly describes resource heterogeneity?

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

To make the SWOT analysis an effective management tool,a strategist must first