BUSMHR 4490 EXAM 2 WITH
COMPLETE SOLUTIONS
Core Competencies - Correct Answers -Unique strengths, embedded deep within a firm,
that allow a firm to differentiate its products and services from those of its rivals,
creating higher value for the customer or offering products and services of comparable
value at lower cost
Resources - Correct Answers -Any asset that a firm can draw on when formulating and
implementing a strategy
Capabilities - Correct Answers -Organizational and mangerial skills necessary to
orchestrate a diverse set of resources and deploy them strategically
Activities - Correct Answers -Distinct and fine-grained business processes that enable
firms to add incremental value by transforming input into goods and services
Diseconomies of Scale - Correct Answers -Increases in per unit cost when output
increases. As firms get too big, the complexity of managing and coordinating raises the
cost, negating any benefits to scale
Minimum Efficient Scale - Correct Answers -Output range needed to bring the cost per
unit down as much as possible, allowing a firm to stake out the lowest cost position that
is achievable through economies of scale
Learning Curve - Correct Answers -Learning by doing can also keep the cost down
Learning Curves vs. Economies of Scale - Correct Answers -1. Learning effects occur
over time as output is accumulated, while economies of scale are captured at one point
in time when output is increased. Although learning declines at some point, there are no
Diseconomies of Scale to learning.
2. In some production processes, effects of economies of scale can be quite significant,
while learning effects are minimal. In contrast, in some professions, learning effects can
be substantial while economies of scale is minimal (brain surgeon).
Resource-based view - Correct Answers -A model that sees certain types of resources
as key superior firm performance. If a resource exhibits VRIO attributes the resource
enables the firm to gain and sustain a competitive advantage
, Tangible Resources - Correct Answers -Resources that have physical attributes and
thus are visible
Intangible resources - Correct Answers -Resources that do not have physical attributes
and thus are invisible
Resource Heterogeneity - Correct Answers -Assumption in the resource-based view
that a firm is a bundle of resources and capabilities that differ across firms
Resource Immobility - Correct Answers -Assumption in the resource based view that a
firm has resources that tend to be "sticky" and that do not move easily from firm to firm
VRIO Framework - Correct Answers -A theoretical framework that explains and predicts
firm level competitive advantage. A firm can gain a competitive advantage if it has
resources that are valuable (V), rare (R), and costly to imitate (I). The firm also must
organize (O) to capture the value of the resources
Valuable Resource - Correct Answers -One of the four key criteria in the VRIO
framework. A resource is valuable if it helps a firm increase the perceived value of its
product or service, either by adding attractive features or lowering costs.
Rare Resource - Correct Answers -One of the four key criteria in the VRIO framework.
A resource is rare if the number of firms that possess it is less than the number of firms
it would require to reach a state of perfect competition
Costly-to-imitate Resource - Correct Answers -One of the four key criteria in the VRIO
framework. A resource is costly to imitate if firms that do not possess the resource are
unable to develop or buy the resource at a comparable cost
Organized to capture value - Correct Answers -One of the four key criteria in the VRIO
framework. The characteristic of having in place an effective organizational structure,
processes, and systems to fully exploit the competitive potential of the firm's resources,
capabilities, and competencies
Isolating Mechanisms - Correct Answers -Barriers to initiation that prevent rivals from
competing away the advantage a firm may enjoy
Path dependence - Correct Answers -A situation in which the options one faces in the
current situation are limited by decision made in the past
Casual Ambiguity - Correct Answers -A situation in which the cause and effect of a
phenomenon are not readily apparent
Social complexity - Correct Answers -A situation in which different social and business
systems interact with one another
COMPLETE SOLUTIONS
Core Competencies - Correct Answers -Unique strengths, embedded deep within a firm,
that allow a firm to differentiate its products and services from those of its rivals,
creating higher value for the customer or offering products and services of comparable
value at lower cost
Resources - Correct Answers -Any asset that a firm can draw on when formulating and
implementing a strategy
Capabilities - Correct Answers -Organizational and mangerial skills necessary to
orchestrate a diverse set of resources and deploy them strategically
Activities - Correct Answers -Distinct and fine-grained business processes that enable
firms to add incremental value by transforming input into goods and services
Diseconomies of Scale - Correct Answers -Increases in per unit cost when output
increases. As firms get too big, the complexity of managing and coordinating raises the
cost, negating any benefits to scale
Minimum Efficient Scale - Correct Answers -Output range needed to bring the cost per
unit down as much as possible, allowing a firm to stake out the lowest cost position that
is achievable through economies of scale
Learning Curve - Correct Answers -Learning by doing can also keep the cost down
Learning Curves vs. Economies of Scale - Correct Answers -1. Learning effects occur
over time as output is accumulated, while economies of scale are captured at one point
in time when output is increased. Although learning declines at some point, there are no
Diseconomies of Scale to learning.
2. In some production processes, effects of economies of scale can be quite significant,
while learning effects are minimal. In contrast, in some professions, learning effects can
be substantial while economies of scale is minimal (brain surgeon).
Resource-based view - Correct Answers -A model that sees certain types of resources
as key superior firm performance. If a resource exhibits VRIO attributes the resource
enables the firm to gain and sustain a competitive advantage
, Tangible Resources - Correct Answers -Resources that have physical attributes and
thus are visible
Intangible resources - Correct Answers -Resources that do not have physical attributes
and thus are invisible
Resource Heterogeneity - Correct Answers -Assumption in the resource-based view
that a firm is a bundle of resources and capabilities that differ across firms
Resource Immobility - Correct Answers -Assumption in the resource based view that a
firm has resources that tend to be "sticky" and that do not move easily from firm to firm
VRIO Framework - Correct Answers -A theoretical framework that explains and predicts
firm level competitive advantage. A firm can gain a competitive advantage if it has
resources that are valuable (V), rare (R), and costly to imitate (I). The firm also must
organize (O) to capture the value of the resources
Valuable Resource - Correct Answers -One of the four key criteria in the VRIO
framework. A resource is valuable if it helps a firm increase the perceived value of its
product or service, either by adding attractive features or lowering costs.
Rare Resource - Correct Answers -One of the four key criteria in the VRIO framework.
A resource is rare if the number of firms that possess it is less than the number of firms
it would require to reach a state of perfect competition
Costly-to-imitate Resource - Correct Answers -One of the four key criteria in the VRIO
framework. A resource is costly to imitate if firms that do not possess the resource are
unable to develop or buy the resource at a comparable cost
Organized to capture value - Correct Answers -One of the four key criteria in the VRIO
framework. The characteristic of having in place an effective organizational structure,
processes, and systems to fully exploit the competitive potential of the firm's resources,
capabilities, and competencies
Isolating Mechanisms - Correct Answers -Barriers to initiation that prevent rivals from
competing away the advantage a firm may enjoy
Path dependence - Correct Answers -A situation in which the options one faces in the
current situation are limited by decision made in the past
Casual Ambiguity - Correct Answers -A situation in which the cause and effect of a
phenomenon are not readily apparent
Social complexity - Correct Answers -A situation in which different social and business
systems interact with one another
