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SGMA 591 Chapter 4 Exam With Verified Solutions
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SGMA 591 Chapter 4 Exam With Verified SolutionsCompetitive Advantage unique advantage a firm has over its rivals in an industry that
allows it to return higher profits than its rivals
External Sources of Change customer demand
price
tech
The more turbulent the environment of an industry, the more sources of change, and the
greater the dispersion of firms' resources and capabilities, the wider the dispersion of
profitability within the industry.
responsiveness - Response tempo and capability to anticipate any change in the external
environment
time based competition - Response (boston consulting group) The concept of speed as a
competitive advantage
internal source of change - Response Innovation
strategic innovation- Response The creation of customer value from new products,
experiences, or modes of product delivery. The most promising tended to involve
pioneering along one or more dimensions of strategy= blue ocean strategy
Isolating mechanism - Answer (Rumelt) the barriers that protect a firm's profits from the
erosive forces of the competitive process.
why is competitive advantage hard to sustain - Answer The disruptive entrants with new
business models, products or technologies
, identification - Answer The firm must be able to identify that a competitor has a
competitive advantage. Obscure superior performance
incentive for imitation - Answer the firm must believe that by investing in imitation it too
can earn superior returns
deterrence - Answer signal aggressive intentions to imitators
pre-emption - Answer occupying existing and potential strategic niches to reduce the
range of investment opportunities open to the challenger.
proliferation - Answer can leave new entrants and smaller rivals with few opportunities
for establishing a market niche.
patent proliferation - Answer can protect technology-based advantage by limiting
competitors' technical opportunities
diagnosis - Answer The firm must be able to diagnose the features of its rival's strategy
that give rise to the competitive advantage. Depend on several sources of competitive
advantage to create causal ambiguity
causal ambiguity and by who - Answer difficult to discern which differences are the key
causes of higher than average profitability. Lipman and Rumelt
uncertain imitability - where ambiguity exists regarding the causes of a competitor's
success, an attempt to imitate that strategy is indeterminate in regard to its likelihood of
success.
resource acquisition - the firm must be able to obtain through transfer or replication the
resources and capabilities necessary for the imitation of the strategy of the advantaged
firm
found a competitive strategy on resources and capabilities which are immobile and hence
difficult or costly to replicate
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