The Management of Strategy Concepts International Edition 10th Edition by R. Duane Ireland – Test Bank

The Management of Strategy Concepts International Edition 10th Edition by R. Duane Ireland – Test Bank

Chapter 3—The Internal Environment: Resources, Capabilities, Competencies, and Competitive Advantages

TRUE/FALSE

1.The Chapter 3 Opening Case demonstrates that although conditions in the economic environment influenced Subway’s success, the manner in which Subway used its resources and capabilities also influenced that success.

ANS: T PTS: 1 DIF: Easy OBJ: Application

NOT: AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff & Rubin: Managing strategy & innovation | Bloom: Application

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

ANS: T PTS: 1 DIF: Easy OBJ: Comprehension

NOT:AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff & Rubin: Managing human capital | Bloom: Comprehension

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

ANS: T PTS: 1 DIF: Easy OBJ: Comprehension

NOT:AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff & Rubin: Strategic & systems skills | Bloom: Comprehension

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

ANS: T PTS: 1 DIF: Medium OBJ: Knowledge

NOT:AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff & Rubin: Strategic & systems skills | Bloom: Knowledge

5.Firms achieve strategic competitiveness and earn above average returns by acquiring, bundling, and leveraging their resources for the purpose of  taking advantage of opportunities in the external environment in ways that create value for customers.

ANS: T PTS: 1 DIF: Easy OBJ: Knowledge

NOT:AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff & Rubin: Strategic & systems skills | Bloom: Knowledge

6.Analyzing the internal environment enables a firm to determine what it might do by identifying what opportunities and threats exist.

ANS: F PTS: 1 DIF: Hard OBJ: Comprehension

NOT:AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff & Rubin: Strategic & systems skills | Bloom: Comprehension

7.Analyzing the internal environment enables a firm to determine what it can do by identifying resources, capabilities, and core competencies in the internal organization.

ANS: T PTS: 1 DIF: Medium OBJ: Comprehension

NOT:AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff & Rubin: Strategic & systems skills | Bloom: Comprehension

8.Given enough time, any firm’s competitive advantage can be imitated by its competitors.

ANS: T PTS: 1 DIF: Easy OBJ: Knowledge

NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin: Strategic & systems skills | Bloom: Knowledge

9.Understanding how to leverage the firm’s unique bundle of resources and capabilities is a key outcome decision makers seek when analyzing the internal organization.

ANS: T PTS: 1 DIF: Medium OBJ: Comprehension

NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin: Strategic & systems skills | Bloom: Comprehension

10.In today’s global economy, traditional factors such as labor costs, access to financial resources and raw materials, and protected or regulated markets are less likely to become core competencies and possibily competitive advantages.

ANS: T PTS: 1 DIF: Easy OBJ: Knowledge

NOT:AACSB: Multicultural & Diversity | Management: Creation of Value | Dierdorff & Rubin: Strategic & systems skills | Bloom: Knowledge

11.A global mind-set is free of the assumptions of a single country, culture, or context.

ANS: T PTS: 1 DIF: Easy OBJ: Knowledge

NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Strategic & systems skills | Bloom: Knowledge

12.Resources are the source of capabilities, some of which lead to the development of core competencies; in turn, some core competencies may lead to competitive advantage.

ANS: T PTS: 1 DIF: Easy OBJ: Knowledge

NOT:AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin: Knowledge of general business functions | Bloom: Knowledge

13.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.

ANS: F PTS: 1 DIF: Medium OBJ: Comprehension

NOT: AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff & Rubin: Managing strategy & innovation | Bloom: Comprehension

14.Value is created when firms innovately bundle and leverage their resources to form capabilities and core competencies.

ANS: T PTS: 1 DIF: Easy OBJ: Knowledge

NOT: AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff & Rubin: Managing strategy & innovation | Bloom: Knowledge

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

ANS: T PTS: 1 DIF: Easy OBJ: Comprehension

NOT:AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff & Rubin: Strategic & systems skills | Bloom: Comprehension