Question 1

The quality of resources, especially the quality of advanced factors of production, is not a determinate of whether a company is effective in transforming inputs into outputs.

Accepted Answer

The quality of resources, including advanced factors of production such as technology and skilled labor, significantly influences a company's efficiency and effectiveness in transforming inputs into outputs. High-quality resources can lead to better productivity, innovation, and competitive advantage.

Question 2

The importance of reliability in building competitive advantage has increased dramatically over the past several decades.

Accepted Answer

With an increase in competition and globalization, customers now demand reliable products and services. Companies that can consistently deliver high levels of reliability have a competitive advantage over those that cannot, leading to increased customer loyalty and profitability.

Question 3

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.

Accepted Answer

The statement presents the scenario of Nene's work in a factory where she's paid based on her productivity, which is defined as the number of pounds of crab meat she picks per day. Therefore, the statement is true.

Question 4

Employee productivity is a common measure of efficiency.

Accepted Answer

Employee productivity is a standard measure of efficiency in an organization as it represents the amount of output produced per hour or per worker.

Question 5

The primary activities of the value chain include the design, creation, and delivery of the product, the product's marketing, and its support and after-sales service.

Accepted Answer

The activities of the value chain are generally categorized into primary activities, which are directly involved in the creation and delivery of the product, and support activities, which facilitate the primary activities. The primary activities include inbound logistics, operations, outbound logistics, marketing and sales, and service. The design of the product may fall under the operations activity, while after-sales service falls under the service activity.

Question 6

Process knowledge includes control systems and incentive systems while organizational architecture includes human skills and the style of decisions are made.

Accepted Answer

Process knowledge refers to understanding how various tasks and activities are carried out within an organization, often including the technical and operational aspects. Organizational architecture, on the other hand, encompasses the structure and systems in place for decision-making, incentives, and control, as well as the allocation of responsibilities and roles within the organization.

Question 7

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

Accepted Answer

The primary value-chain activity of production in Adam's bicycle repair shop is the repair of bicycles, which occurs each time a customer brings in their bicycle for repair.

Question 8

The Big Mac, the McFlurry and the McDonald's logo are all examples of the organizational architecture of the McDonald's company.

Accepted Answer

These are examples of products and branding elements, not organizational architecture, which refers to the structure and systems that define how a company is organized and operates.

Question 9

Creating consumer value and differentiating product offerings is a result of the pursuit of efficiency, quality, innovation, and customer responsiveness through the completion of value-chain activities.

Accepted Answer

This statement correctly identifies the factors that contribute to creating consumer value and differentiating product offerings, and how they are achieved through value-chain activities.

Question 10

The only change in pricing options available for a company that seeks to increase the average value per unit of their product to a customer is to raise prices to reflect a higher value.

Accepted Answer

Companies can also add value to their products through improvements, bundling products, or enhancing services, which can justify a higher price without simply raising prices on existing offerings.

Question 11

When completing the internal analysis process, a company must first develop an understanding of the role that resources have in determining competitive advantage then analyze the sources of competitive advantage to determine profitability.

Accepted Answer

The answer of When completing the internal analysis process, a...

Question 12

A resource is inimitable if competitors can copy it easily.

Accepted Answer

Inimitable resources cannot be easily copied by competitors.

Question 13

The more firm-specific and difficult to imitate a resource is, the more likely a company holding that resource is said to have a distinctive competency.

Accepted Answer

This statement is true. A distinctive competency is a unique advantage that a company has over its competitors, and resources that are firm-specific and difficult to imitate are more likely to contribute to such a competency.

Question 14

The price a company charges for a good or service is typically more than the utility placed upon that good or service by the customer.

Accepted Answer

The price a company charges for a good or service is ideally less than or equal to the utility perceived by the customer, as this perceived utility drives the customer's willingness to pay. If the price were consistently more than the utility placed upon the good or service by the customer, demand would likely decrease as customers would not see the value in making the purchase.

Question 15

Internal analysis, coupled with an analysis of the company's external environment, gives managers the information they need to choose the strategy that will enable their company to attain a sustained competitive advantage.

Accepted Answer

This statement is correct. Internal analysis helps managers understand the strengths and weaknesses of their company, while external analysis helps them understand the opportunities and threats in the industry and competitive landscape. Combining these analyses helps managers determine the best strategy to maintain a competitive advantage over time.

Question 16

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.

Accepted Answer

Customer response time refers to the time taken to produce and deliver a product in response to the demand of customers.

Question 17

Creating a signature scent, choosing an original name, and configuring the shape and look of the bottle are all decisions made in the production phase of the value chain for a perfume company.

Accepted Answer

The production phase of the value chain for a perfume company involves the actual manufacturing of the perfume, not the decisions related to its branding and packaging.

Question 18

The building blocks of competitive advantage are superior efficiency, quality, innovation and customer responsiveness.

Accepted Answer

These are commonly accepted as the building blocks of competitive advantage, as they allow a company to differentiate itself from competitors and provide value to customers.

Question 19

If a company's profitability is higher than the average profitability of all companies in its industry, it has a competitive advantage.

Accepted Answer

If a company's profitability is higher than its industry's average profitability, it means that the company is able to generate more profits than its competitors, which gives it a competitive advantage.

Question 20

The VRIO model is designed to help companies assess the quality of their resources and identify sources of competitive advantage.

Accepted Answer

The VRIO model is indeed designed to help companies assess the quality of their resources and identify sources of competitive advantage. The model stands for Value, Rarity, Imitability, and Organization. Companies use it to determine if their resources or capabilities are able to provide sustainable competitive advantage.

Quiz 3: Internal Analysis: Resources and Competitive Advantage