MGT 499 Chapter 4- book(Correctly solved)
Resource Based Theory correct answers A theory that contends that the possession of strategic resources
can provide an organization with competitive advantages over its rivals.
A strategic resource is an asset that is valuable, rare, difficult to imitate, and nonsubstitutable.
Valuable correct answers to the extent that it helps a firm create strategies that capitalize on opportunities
and ward off threats. Resources aid in improving the organizations effectiveness and efficiency wile
neutralizing the opportunities and threats of its competitors. (southwest airlines turns a profit every year
because it encourages its employees to always do its best)
Rare correct answers Resources are those held by few or no other competitors. (southwest still does good
where its airline industry is high in strikes, layoffs, and poor morale.)
Difficult to Imitate correct answers resources often involve legally protected intellectual property rights
such as trademarks, patents, or copyrights. Competitors have a hard time duplicating resources
Non Substitute correct answers when competitors cannot find alternative ways to gain the benefits that a
resource provides. (executives at other airlines would love to attract the customer loyalty that southwest
endures, but they have yet to find ways to inspire the kind of customer service southwest does).
Sustained Competitive Advantage correct answers A competitive advantage that will endure over time.
Resources that do not have all four qualities can still be very useful, but they are unlikely to provide long-
term advantages.
Tangible Resources correct answers Resources than can be readily seen, touched, and quantified, such as
physical assets, property, plant, equipment, and cash.
Intangible Resources correct answers Resources that are difficult to see, to touch, or to quantify, such as
the knowledge and skills of employees, a firm's reputation, and a firm's culture.
intangible resources are more likely to meet the criteria for strategic resources (i.e., valuable, rare,
difficult to imitate, and nonsubstitutable) than are tangible resources
Capabilities correct answers What the organization can do based on the resources it possesses.
, Dynamic Capability correct answers A unique ability to create new capabilities by continually updating a
firm's array of capabilities to keep pace with changes in its environment.
Distinctive Competence correct answers A set of activities that an organization performs especially well.
Marketing mix correct answers The four Ps (product, price, place, and promotion) that firms use to offer
customers a coherent and persuasive message.
Product correct answers Goods and services a firm sells to customers.
Price correct answers The amount firms charge for their goods or services.
Place correct answers A physical purchase point as well as a distribution channel.
Promotion correct answers The communications used to market a product, including advertising, public
relations, and other forms of direct and indirect selling.
Key Take Away: correct answers Resource-based theory suggests that resources that are valuable, rare,
difficult to imitate, and nonsubstitutable best position a firm for long-term success. These strategic
resources can provide the foundation to develop firm capabilities that can lead to superior performance
over time. Capabilities are needed to bundle, to manage, and otherwise to exploit resources in a manner
that provides value added to customers and creates advantages over competitors.
Intellectual Property correct answers Creations of the mind, such as inventions, artistic products, and
symbols. The four main types of intellectual property are patents, trademarks, copyrights, and trade secret
Patents correct answers Legal decree that protects inventions from direct imitation for a limited period of
time.(ex of the slinky being patented and creating enormous profits)
Trademark correct answers Phrase, picture, name, or symbol used to identify a particular organization.
(ex. McDonalds Arch)
