BCOR 2304 Midterm Exam 2025

What resources/capabilities helped Five Guys gain a competitive advantage and develop a successful restaurant? - - - Carefully choosing potato suppliers - Focusing on such details as store layout/ design What are the key assumptions behind the resource-based model of the firm? - Resource heterogeneity and resource immobility Core competencies of a business are generated by the interaction of: - -Resources and capabilities Core competencies can help a company achieve - -- Creating higher value for customers - Differentiating its products and services - Offering comparable products at lower costs than rivals VRIO framework - -Valuable, Rare, Inimitable, Organized - explains/ predicts what resource attributes underpin competitive advantage When is a resource considered valuable? - -If it helps a firm deal with an external threat How does the resource-based model view resources? - -As the main driver of performance How can a firm with valuable, rare, and inimitable resources be successful? - -Staying organized to capture value Is uncertainty about a resource an isolating mechanism? - -No What should a firm do in order to be organized to capture value? - -The must have: - organizational structure - coordinating systems ___________________________ suggests that sometimes even random events may have large impacts on an outcome - -Path dependence Which of the following can help a firm extend its competitive advantage? - -- Path dependence - Better expectations of future resource value - Intellectual property protection Are isolating mechanisms barriers to imitation? - -Yes BCOR 2304 BCOR 2304 Time compressions diseconomies occur when a firm tries to reach an outcome in a reduced amount of time - -- Attempting to get a good outcome in less time tends to be ineffective If the problem with a business strategy results in ambiguity, managers will: - -- have a difficult time developing a theory to deal with the problem What describes a situation in which different social and business systems interact with one another? - -Social complexity Is a competitive advantage most often maintained indefinitely? - -No Enterprise Machinists is always improving on its core competencies by training its machinists conveniently so the they are equipped to deal with technological changes and advancements - -- This is called dynamic capabilities What describes a situation where the cause and effect of a phenomenon are not readily apparent? - -Casual ambiguity What are the firms current level of intangible resources? - -Resource stocks The interaction of many individual systems in the operation of company often lead to casual ambiguity because of: - -- Social complexity What describes the internal activities a firm engages in when transforming inputs into outputs? - -- Value chain How can a firm sustain a competitive advantage over time? - -By having a dynamic fit between its internal strengths and external environment How are intangible resource stocks acquired? - -Through investments over time in intangible resources The value chain prospect is applicable primarily to high tech firms in rapidly changing environments - -False Path dependence describes a situation in which: - -A process where the options one faces in the current situation are limited by decisions made in the past A firm's network of interconnected activities is referred to as a strategic activity system because activities that are interconnected are very difficult for competitors to copy effectively - -True As Jet Blue grew, what occurred during the years following 2007? - -It suffered a competitive disadvantage BCOR 2304 BCOR 2304 What does a business level strategy outline? - -The steps a manager will take to achieve competitive advantage in a single product market Which 2 of the following variable can managers primarily manipulate in order to answer the question, "How should we compete?" - -- Cost - Value A _____________________ strategy aims to create higher value for customers by offering products with unique features but with a similar level of costs to those with competing products - -- Differentiation Which of the following best defines economies of scope? - -- They are savings that come from producing two or more outputs at less costs than producing each output individually Which of the following are business strategies that JetBlue pursued in order to gain a competitive advantage? - -- Differentiation - Cost leadership A company's goal-directed plans regarding how to compete for advantage is known as the firms: - -- Business level strategy Positive adjustments in product features, customer service, and complements may enable managers to: - -- Improve the firm's strategic position How to compete on a business level is defined by the variable value and cost. Together, they define the: - -- Economic value created Which type of strategy is being used if company offers a product at a lower cost than its competitors? - -- Cost leadership Which capability is required to create superior product features? - -Research & Development What are the savings that come from producing two or more different outputs a lower cost than producing each output individually? - -- Economies of scope The most significant challenge that Jet Blue faced in implementing its business strategy was: - -- Reconciling trade-offs between cutting costs and providing superior service The Ritz-Carlton provides a personalized customer experience based on sophisticated analysis of data gathered about each guest. This focus on _____________ allows the total to increase its perceived value. - -- Customer service BCOR 2304 BCOR 2304 Two important features that managers can adjust in an effort to improve the firm's strategic positions are: - -1. Product features 2. Customer service A tablet manufactures that includes a free stylus with every purchase is using what to enhance users' experiences and increase the perceived value of its tablets? - Complements Unique features and attributes that differentiate a product from competitors' offerings allow the firm to: - -- Charge premium pricing A company that achieves differentiation parity at a lower cost has implemented a successful cost-leadership strategy - -- True A manufacturer of electronic components can use its manufacturing machines to product many different components. In this case, the firm benefits from an economy of _____________, reducing overall production costs by finding multiple uses for its components and facilities - -- Scope Which of the following are input factors? - -- Information technology services - Capital - Raw materials - Labor What are the three most important value drivers that managers can use to create a competitive advantage? - -1. Complements 2. Customer service 3. Product features Value drivers known as _____________ add value to a product or service when they are consumer in tandem with the focal product - -- Complements Economies of scale are: - -- Decreases in cost per unit as output increases The goal of a _______________ strategy is to achieve expenses below those of competitors while maintaining similar value. A firm with this strategy could or could not achieve differentiation parity. - -- Cost leadership In terms of productivity, what is true of learning curves? - -- They go down An auto manufacturer that has access to cheaper labor and raw materials than its rivals will have a competitive advantage regarding lower cost of ___________ factors - -- Input The concept of a _______________ attempts to combine both learning effects and process improvements - -- Experience curve BCOR 2304 BCOR 2304 Which of the following are examples of ways that large retailing firm can increase the perceived value of its offerings by focusing on customer service? - -- Offering a "no questions asked" return policy - Maintaining a domestic call center that is open 24 hours a day Which competitive forces can result in an erosion of margins for both differentiation and cost-leadership business strategies? - -- Power of buyers - Threat of entry - Power of suppliers A firm that increases its output of a given product and experiencers of a simultaneous decrease in per unit costs is taking advantage of _____________ - -- Economies of scale A ______________ strategy attempts to increase the perceived value of a precut while controlling costs - -- Differentiation Why does the learning curve go down when productivity is considered? - -- As workers repeatedly engage in an activity that become more efficient, driving down costs What is one of the benefits of pursuing a differentiation strategy when it comes to the power of suppliers? - -- Differentiation provides protection against an increase in input prices If two firms produce very similar products at the same rate of output, and firm A is able to achieve lower per-unit costs than firm B by taking advantage of a new manufacturing technology, firm A is benefitting from: - -- An experience curve effect based on progress innovation What is one of the benefits of pursuing a differentiation strategy when it comes to the power of suppliers? - -- Differentiation provides protection against an increase in input prices A producer of consumer headphones successfully differentiates its products with a patented noise-cancelling technology and celebrity endorsements will enjoy which of the following benefits? - -- The ability to charge a premium price - Less intense competition from imitators A ________________ strategy attempts to increase the perceived value of a product while controlling costs - -- Differentiation In addition to having the lowest cost, a low-cost leader is likely to have - -- A large market share BCOR 2304 BCOR 2304 What is one of the benefits of pursuing a differentiation strategy when it comes to the power of suppliers? - -- Differentiation provides protection against substitute products by lowering prices Which of the following are components of a cost-leadership strategy? - -- Lowest costs in the industry - Acceptable value What is the relationship between innovation and competitive advantage? - -- Innovation is a powerful weapon for gaining and maintaining competitive advantage Place the four steps of innovation process in order from first to lat - -1. Idea 2. Invention 3. Innovation 4. Imitation When a company introduces a new product or process or business model with the intel to gaining a competitive advantage, that company is engaging in: - -- Innovation The four step innovation process beings with: - -- an idea The negative effect of innovative ride-sharing services on tradition taxi cab companies is an example of: - -- Creative destruction Stages of the industry life cycle: - -1. Introduction 2. Growth 3. Maturity 4. Decline 5. Shakeout Which statement describes the long tail? - -- A large amount of revenue derived from. small number of units along almost unlimited choices Which statement best describes the speed of innovation over the past hundred years? - -- It has accelerated dramatically Increases in the value of product or service that results from a corresponding increase in the number of users are known as: - -- Network effects Industries often tend to follow a predictable industry life cycle - -- True At which stage of the industry life cycle does the size of the market expand rapidly? - -- Growth During the shakeout stage of the industry life cycle, profits degrade for: - -- All but the most efficient firms BCOR 2304 BCOR 2304 In the __________ stage of the industry life cycle, a few number of large firms compete for a share of a market that has reached its maximum size - -- Maturity A firm that successfully leverages network effects can: - -- Push its industry into the growth stage In the __________ stage of the industry life cycle, falling demands leads to a reduction in market size. - -- Decline During the growth stage of the industry life cycle, ___________ increases rapidly - -- Demand Simone was the first among her peers to try the new unicorn hair dye. For months she was the only person with unicorn hair. After some time, though, the product became available everywhere, and nearly every other person began sporting unicorn har, even Simone's mom. This situation describes which of the following? - -- Crossing the chasm Benny's Baos had an edge in the market, but other companies began to enter the market. Benny is now losing customers even though he has launched an aggressive marketing campaign in an attempt to attract customers. Benny's Baos is likely in the _____________ stage of the industry life cycle - -- Shakeout Which of the following statements about the maturity stage of the industry life cycle is true? - -Only a few large firms remain Increase in the value of a product or service that result from a corresponding increase in the number of users is known as the: - -- Network effect Demand declines most rapidly in the _______________ stage of the industry life cycle - -- Decline It is challenging for firms to "cross the chasm" because: - -- Each stage of the industry life cycle features a different group of customers with different preferences and demands During the shakeout stage of the industry life cycle, profits degrade for: - -- All but the most efficient firms The customer segment known as ____________ enjoys testing product prototypes and providing voluntary feedback that companies use to perfect their products: - -- Technology enthusiasts In the maturity stage of the industry life cycle, industry growth: - -- Flattens or even declines BCOR 2304 BCOR 2304 A firm that successfully leverages network effects can - -- Push its industry into the growth stage Customers who desire a product because it stokes their imagination and creativity are known as: - -- Early adopters During the decline stage of the industry life cycle, product innovation efforts: - -- Come to a halt The shakeout stage of the industry life cycle is dominated by: - -- The early majority Successfully transitioning from one stage of the industry l