J375 Chapter 3 UPDATED ACTUAL Exam
Questions and CORRECT Answers
What does internal analysis tell us? - CORRECT ANSWER - It provides a comparative
look at a firm's resources and capabilities and how they pertain to strengths and weaknesses.
Internal analysis helps a firm do what? - CORRECT ANSWER - Determine if its resources
and capabilities are likely sources of competitive advantage and then establish strategies that will
exploit any sources of competitive advantage.
What are resources? - CORRECT ANSWER - The tangible and intangible assets of a firm
that are used to conceive and implement strategies.
What are capabilities? - CORRECT ANSWER - A subset of resources that enable a firm to
take full advantage of other resources.
Give an example of a capability. - CORRECT ANSWER - Marketing skill.
Give an example of a tangible resource. - CORRECT ANSWER - Factories.
Give an example of an intangible resource. - CORRECT ANSWER - Reputation.
What are the four categories of resources? - CORRECT ANSWER - Financial, Physical,
Human, and Organizational.
What are two critical assumptions of the resource-based view? - CORRECT ANSWER -
Resource heterogeneity and immobility.
What is resource heterogeneity? - CORRECT ANSWER - States that different firms may
have different resources.
, What is resource immobility? - CORRECT ANSWER - It may be costly for firms without
certain resources to acquire or develop them, and some reasons may not be spread from firm to
firm easily.
What does VRIO stand for? - CORRECT ANSWER - Value, Rarity, Immobility, and
Organization.
What does the VRIO Framework say? - CORRECT ANSWER - If a firm has resources
that are valuable, rare, costly to imitate, and is organized to exploit them, then the firm can
expect to enjoy a sustained competitive advantage.
What is the Question of Value? - CORRECT ANSWER - Does the resource enable the
firm to exploit an external opportunity or neutralize an external threat?
Practically, the Question of Value is concerned with what? - CORRECT ANSWER -
Whether or not the resource results in an increase in revenues, a decrease in costs, or a
combination of the two.
What is the focus of the Question of Rarity? - CORRECT ANSWER - There may be other
firms that possess the resource, but still few enough that there is scarcity.
What happens if a resource isn't rare? - CORRECT ANSWER - Perfect competition
dynamics are likely to be observed (no competitive advantage, no above normal profits, etc.)
What happens if a firm's resources are not valuable? - CORRECT ANSWER - Expect a
competitive disadvantage.
What happens if the firm's resources are valuable but not rare? - CORRECT ANSWER -
Expect a competitive parity.
Questions and CORRECT Answers
What does internal analysis tell us? - CORRECT ANSWER - It provides a comparative
look at a firm's resources and capabilities and how they pertain to strengths and weaknesses.
Internal analysis helps a firm do what? - CORRECT ANSWER - Determine if its resources
and capabilities are likely sources of competitive advantage and then establish strategies that will
exploit any sources of competitive advantage.
What are resources? - CORRECT ANSWER - The tangible and intangible assets of a firm
that are used to conceive and implement strategies.
What are capabilities? - CORRECT ANSWER - A subset of resources that enable a firm to
take full advantage of other resources.
Give an example of a capability. - CORRECT ANSWER - Marketing skill.
Give an example of a tangible resource. - CORRECT ANSWER - Factories.
Give an example of an intangible resource. - CORRECT ANSWER - Reputation.
What are the four categories of resources? - CORRECT ANSWER - Financial, Physical,
Human, and Organizational.
What are two critical assumptions of the resource-based view? - CORRECT ANSWER -
Resource heterogeneity and immobility.
What is resource heterogeneity? - CORRECT ANSWER - States that different firms may
have different resources.
, What is resource immobility? - CORRECT ANSWER - It may be costly for firms without
certain resources to acquire or develop them, and some reasons may not be spread from firm to
firm easily.
What does VRIO stand for? - CORRECT ANSWER - Value, Rarity, Immobility, and
Organization.
What does the VRIO Framework say? - CORRECT ANSWER - If a firm has resources
that are valuable, rare, costly to imitate, and is organized to exploit them, then the firm can
expect to enjoy a sustained competitive advantage.
What is the Question of Value? - CORRECT ANSWER - Does the resource enable the
firm to exploit an external opportunity or neutralize an external threat?
Practically, the Question of Value is concerned with what? - CORRECT ANSWER -
Whether or not the resource results in an increase in revenues, a decrease in costs, or a
combination of the two.
What is the focus of the Question of Rarity? - CORRECT ANSWER - There may be other
firms that possess the resource, but still few enough that there is scarcity.
What happens if a resource isn't rare? - CORRECT ANSWER - Perfect competition
dynamics are likely to be observed (no competitive advantage, no above normal profits, etc.)
What happens if a firm's resources are not valuable? - CORRECT ANSWER - Expect a
competitive disadvantage.
What happens if the firm's resources are valuable but not rare? - CORRECT ANSWER -
Expect a competitive parity.
