Bus 401 VanderKelen Midterm #1 || Solved Correctly.
The value chain correct answers A visual description of the steps required to turn raw materials
into finished products/services. The value chain also describes key functions of the firm linked to
each stage & functions that span the productive activities of the firm. (inputs -> outputs)
Resources correct answers All assets, capabilities, organizational processes, firm attributes,
information, knowledge (and so on) controlled by a firm that enable it to conceive & implement
strategies that improve its efficiency and attractiveness
Assets correct answers Tangible/intangible resources/factors of production that create economic
value for the firm when employed
4 types of assets correct answers Physical, human, intangible, financial
Capabilities correct answers Procedures, processes, and routines firms employ in their activities
Operating Capabilities correct answers Procedures, processes, and routines for delivering value
to customers, employees, suppliers, or investors
Dynamic Capabilities correct answers Procedures, processes, and routines that continuously
expand existing resources or improve operating capabilities (firms with this have more secure
foundation for competitive advantage)
Priorities correct answers Firm's values & rankings of what's important. Guide the resource
allocation process and maintain those allocations over time
VRIO correct answers Value, rarity, Inimitability, organized to exploit. Use to create sustainable
competitive advantage
Value correct answers Worth of utility (can be direct or indirect)
, Rarity correct answers To be uncommon, not available to other competitors
Inimitability correct answers Describes the degree of difficulty a competitor would face in
copying, imitating, or mimicking the value of that resource
Positive network externalities correct answers When the value of a product increases with the
number of users
Negative network externalities correct answers When more sellers attract more buyers, who in
turn, attract more sellers
Ways to achieve inimitability correct answers !) path dependence
2) tacit knowledge
3) causal ambiguity diseconomies
4) complexity
5) time compression
6) network effects & first-mover advantages
Organized to exploit (profits) correct answers Degree to which the legal, administrative, and
operating structure of the firm allows it to capture the rents generated by resources
Competitive failure correct answers When firms that can't create value for their stakeholders
don't survive
Competitive parity correct answers Company survives but has no real competitive advantage
over competitors
The value chain correct answers A visual description of the steps required to turn raw materials
into finished products/services. The value chain also describes key functions of the firm linked to
each stage & functions that span the productive activities of the firm. (inputs -> outputs)
Resources correct answers All assets, capabilities, organizational processes, firm attributes,
information, knowledge (and so on) controlled by a firm that enable it to conceive & implement
strategies that improve its efficiency and attractiveness
Assets correct answers Tangible/intangible resources/factors of production that create economic
value for the firm when employed
4 types of assets correct answers Physical, human, intangible, financial
Capabilities correct answers Procedures, processes, and routines firms employ in their activities
Operating Capabilities correct answers Procedures, processes, and routines for delivering value
to customers, employees, suppliers, or investors
Dynamic Capabilities correct answers Procedures, processes, and routines that continuously
expand existing resources or improve operating capabilities (firms with this have more secure
foundation for competitive advantage)
Priorities correct answers Firm's values & rankings of what's important. Guide the resource
allocation process and maintain those allocations over time
VRIO correct answers Value, rarity, Inimitability, organized to exploit. Use to create sustainable
competitive advantage
Value correct answers Worth of utility (can be direct or indirect)
, Rarity correct answers To be uncommon, not available to other competitors
Inimitability correct answers Describes the degree of difficulty a competitor would face in
copying, imitating, or mimicking the value of that resource
Positive network externalities correct answers When the value of a product increases with the
number of users
Negative network externalities correct answers When more sellers attract more buyers, who in
turn, attract more sellers
Ways to achieve inimitability correct answers !) path dependence
2) tacit knowledge
3) causal ambiguity diseconomies
4) complexity
5) time compression
6) network effects & first-mover advantages
Organized to exploit (profits) correct answers Degree to which the legal, administrative, and
operating structure of the firm allows it to capture the rents generated by resources
Competitive failure correct answers When firms that can't create value for their stakeholders
don't survive
Competitive parity correct answers Company survives but has no real competitive advantage
over competitors
