Question 1

A firm can sometimes grow through making mistakes and errors.

Accepted Answer

Making mistakes and errors can provide valuable lessons and insights, ultimately leading to growth and improvement for the firm.

Question 2

Increasingly customers perceive higher value in global rather than domestic brands.

Accepted Answer

This statement is supported by market research and consumer surveys, indicating a trend towards greater trust and preference for global brands that are perceived as having higher quality, innovation, and global reach.

Question 3

Changes in the external environment cause core competencies to become core rigidities.

Accepted Answer

False

Question 4

We can often locate information about a firm's sources of competitive advantage in its corporate financial information.

Accepted Answer

While corporate financial information can give insights into a company's profitability and financial strength, it may not necessarily reveal its sources of competitive advantage. Competitive advantage may stem from factors such as proprietary technology, strong branding, superior distribution channels or unique talent, which may not be directly reflected in financial statements.

Question 5

Competitive advantages that firms possess are permanent.

Accepted Answer

Competitive advantages are not necessarily permanent and can change over time due to various factors such as technological advancements, changes in consumer preferences, and new market entrants. Firms must continuously adapt and innovate to maintain their competitive edge.

Question 6

Value-creating reputation is a quick way for firms to win the hearts of stakeholders.

Accepted Answer

Building a value-creating reputation is a long-term process that involves consistently demonstrating ethical behavior, social responsibility, and the ability to deliver value to stakeholders. It cannot be achieved quickly.

Question 7

Firms create value by innovatively bundling and leveraging their resources and capabilities.

Accepted Answer

By bundling their resources and capabilities in a unique and innovative way, firms can generate new products or services, enter new markets, and increase efficiency and effectiveness in their operations, all of which can create value for the firm and its stakeholders.

Question 8

Partnership management and operational skills are essential skills that managers need to possess in order to carry out outsourcing programs.

Accepted Answer

The answer of Partnership management and operational skills are essential...

Question 9

The analysis of a firm's internal environment requires evaluators to examine the firm's portfolio of strategies and the bundles of homogenous resources and capabilities managers have created.

Accepted Answer

The analysis of a firm's internal environment involves examining the firm's resources, capabilities, and core competencies, but these are not necessarily homogenous. They are often heterogeneous and unique to the firm.

Question 10

Capabilities of an organisation emerge over time through complex interactions between and among tangible and intangible resources.

Accepted Answer

Capabilities of an organization do emerge over time through complex interactions between and among tangible and intangible resources, as stated in the resource-based view of the firm.

Question 11

A firm should try to obtain a sustainable competitive advantage by implementing strategies based on its particular resources, capabilities and core competencies.

Accepted Answer

A sustainable competitive advantage can only be achieved by using a firm's unique resources, capabilities, and core competencies. It cannot be achieved by following generic strategies or imitating others. Therefore, firms should strive to develop their own distinctive competencies that are difficult to duplicate or substitute to maintain a unique market position and superior performance.

Question 12

Every core competence is a capability and every capability is a core competence.

Accepted Answer

While core competencies encompass a range of capabilities, not every capability is considered a core competency. Core competencies are specific capabilities that give a company a competitive advantage in its industry.

Question 13

Outsourcing is a way of adding value to a business that converts an external value-creating activity into an internal supplier.

Accepted Answer

Outsourcing involves contracting out a business process or function to an external supplier, not converting an external activity into an internal one.

Question 14

A value chain analysis examines how a firm's external activities are aligned with its primary activities.

Accepted Answer

A value chain analysis examines all the activities a firm engages in to create and deliver a product or service, focusing on both primary (internal) activities like production and secondary (support) activities like human resource management, rather than how external activities are aligned with its primary activities.

Question 15

Capabilities may be easy to imitate if they are causally ambiguous or socially complex.

Accepted Answer

Capabilities that are causally ambiguous or socially complex are actually difficult to imitate because their exact nature and the means of their creation are not clearly understood, making replication challenging for competitors.

Question 16

A global mind-set is the ability to study an internal environment in ways that depend on the assumptions of a single country, culture and context.

Accepted Answer

A global mind-set is the ability to study an internal environment in ways that are not limited by the assumptions of a single country, culture and context. Therefore, the statement in the question is false.

Question 17

For capabilities to be a source of competitive advantage, they must allow a firm to perform value-creating activities in a manner that provides value similar to that provided by competitors.

Accepted Answer

For capabilities to be a source of competitive advantage, they must allow a firm to perform value-creating activities in a manner that is difficult for competitors to imitate or replicate, thereby providing unique value rather than similar value.

Question 18

Once a firm has developed core competencies that can create value, it can use these core competencies as a permanent competitive advantage.

Accepted Answer

Core competencies can provide a temporary competitive advantage, but as the market and technology evolve, competitors may imitate or surpass these competencies, making it essential for firms to continuously innovate and adapt.

Question 19

All resources and capabilities are core competencies.

Accepted Answer

Resources and capabilities refer to the basic elements that a firm possesses, while core competencies are the unique and specific strengths or advantages that a firm has developed, which distinguish it from its competitors. Not all resources and capabilities can be considered core competencies.

Question 20

While valuable capabilities decrease competitive rivalry, rare capabilities increase it.

Accepted Answer

Valuable capabilities can decrease competitive rivalry by providing a competitive advantage, while rare capabilities can further increase this advantage by making it difficult for competitors to replicate, thus potentially decreasing rivalry rather than increasing it.

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