Nike has come a long way from its humble beginnings. It has been able to outperform adidas in sales and become the undisputed leader in the athletic shoe and apparel industry. Which of the following statements accurately explains one of the main reasons for Nike's success?
A) It made the unorthodo...
nike has come a long way from its humble beginning
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MGT 449 Exam 2 || very Flawless.
Nike has come a long way from its humble beginnings. It has been able to outperform adidas in
sales and become the undisputed leader in the athletic shoe and apparel industry. Which of the
following statements accurately explains one of the main reasons for Nike's success?
A) It made the unorthodox move to spend basically its entire budget for a specific sport on a
single star athlete.
B) It focused on sponsoring future athletic superstars who embodied a likely success story.
C) It spread its marketing budget more widely.
D) It stopped spending money on celebrity endorsements and started restricting its expenditure
for sponsoring only track and field sports stars correct answers It made the unorthodox move to
spend basically its entire budget for a specific sport on a single star athlete
________ are best described as 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.
A) Resource leverages
B) Equity reserves
C) Capital gains
D) Core competencies correct answers Core competencies
Dandelions Max is a consumer electronics company. It has acquired an edge over its competitors
through its ability to provide breakthrough technology at the lowest price in the market. This
advantage of Dandelions Max best exemplifies a ________.
A) core competency
B) resource flow
C) capital gain
D) markup correct answers core competency
Which of the following is an example of a firm's resources?
A) Liabilities such as bills payables and short-term debts
B) Routine activities like order taking and invoicing customers, performed in a firm
C) Assets such as land and building owned by a firm
D) Assistance available from the government in the form of rules and regulations correct answers
Assets such as land and building owned by a firm
The management of a company is assessing the value of all the tangible resources the company
owns. Which of the following will be included in this assessment?
A) The company's machinery
B) The company's patents
C) The company's brand equity
D) The company's copyrights correct answers The company's machinery
Intangible assets add great value to a firm primarily because the firm's:
A) tangible assets require a higher degree of capital than its intangible assets.
B) capabilities are by nature typically tangible.
,C) reputation and brand equity are accumulated quickly and can be leveraged easily.
D) knowledge and culture take time to develop and are generally difficult to imitate. correct
answers knowledge and culture take time to develop and are generally difficult to imitate
GN Corp. and BC Inc. are two competing firms in the same industry. GN Corp.'s tangible assets
are valued at $15 billion and its intangible assets are valued at $35 billion. BC Inc.'s tangible
assets are valued at $5 billion and its intangible assets are valued at $45 billion. What can be
concluded from this information?
A) There is no resource heterogeneity between the two firms, BC Inc. and GN Corp. as they
operate in the same industry.
B) It is easier to buy intangible assets with cash than tangible assets.
C) It takes longer time to build tangible assets than intangible assets.
D) It is likely that BC Inc. is better enabled than GN Corp. to gain and sustain a competitive
advantage. correct answers It is likely that BC Inc. is better enabled than GN Corp. to gain and
sustain a competitive advantage
Coral Think Inc. is a new company in the publishing industry. It has raised sufficient capital
from multiple sources. It is planning to use its capital to purchase certain assets. Which of the
following assets will be the most difficult for Coral Think Inc. to acquire using its capital?
A) Tools and equipment
B) Land and building
C) Brand name
D) Inventory correct answers Brand name
Which of the following statements accurately brings out the difference between tangible and
intangible resources?
A) Tangible assets can be bought on the open market, whereas intangible assets cannot be easily
purchased.
B) Tangible resources take a longer time to build, whereas intangible assets can be built
comparatively easily.
C) Tangible resources contribute to a company's competitive advantage, whereas intangible
resources fail to do the same.
D) Tangible assets are difficult to imitate, whereas intangible assets can be easily replicated
correct answers Tangible assets can be bought on the open market, whereas intangible assets
cannot be easily purchased
Which of the following is an example of a firm's intangible resources?
A) The firm's organizational culture
B) The firm's land and building
C) The firm's cash at bank
D) The firm's finished goods inventory correct answers The firm's organizational culture
True Sync Inc. is a software company, which has built and acquired numerous assets over the
years. According to the resource-based view of a firm, which of the following assets of True
Sync Inc. will best enable it to gain and sustain a competitive advantage?
A) The expertise acquired by the employees in the company
,B) The capital raised by the company from its shareholders
C) The headquarters owned by the company
D) The resources of the company that are mobile correct answers The expertise acquired by the
employees in the company
True Home Inc., Super Cart Inc., and Daily Things Inc. are three consumer-product retailing
companies. Their products consist primarily of day-to-day items that are easy to imitate and sell.
All three companies use the same resources and capabilities in the production and distribution of
their products. Which of the following is an implication of the market condition indicated in this
scenario?
A) Any advantage that one firm has will be short-lived.
B) Barriers to entry within the industry will be high.
C) Resource immobility of the firms will be low.
D) The industry structure will be far from perfect competition correct answers Any advantage
that one firm has will be short-lived
The resource-based view of a firm assumes that the:
A) resources of firms are highly scarce and hence the government interferes to ensure equal
distribution.
B) resource bundles of firms competing in the same industry are unique to some extent and thus
differ from one another.
C) resource bundles of firms competing in the same industry tend to be highly mobile, moving
easily from firm to firm.
D) resources of firms are highly exhaustible and hence they cannot contribute to their
competitive advantage. correct answers resource bundles of firms competing in the same
industry are unique to some extent and thus differ from one another
Trust Machines Inc. is a company that manufactures and markets consumer electronics. The
unique microprocessors developed by the company contribute to its high resource immobility.
According to the resource-based view of competitive advantage, which of the following is an
implication of this situation?
A) The resources of Trust Machine Inc. are difficult to replicate or imitate.
B) The competitive advantage of Trust Machine Inc. will soon be lost.
C) The resource heterogeneity of Trust Machine Inc. is low within the industry.
D) The environment in which Trust Machine Inc. operates is closest to perfect competition
correct answers The resources of Trust Machine Inc. are difficult to replicate or imitate
The competitive advantage that one firm has will be short-lived in an industry where:
A) perfect competition exists.
B) capabilities of a firm are not easily replicable.
C) resource immobility is high.
D) resource heterogeneity is high. correct answers perfect competition exists
The "Gold Crisps" potato wafers manufactured by True Foods Inc. have been the highest selling
wafers in the market. Though the market for wafers is flooded with competitors, True Foods Inc.
has been able to maintain its market position for a long time. This is mainly attributed to the
, unique taste of the wafers that comes from the unique natural flavoring used by the company.
This competency of True Foods Inc. will be considered as a(n) ________ resource in the VRIO
framework.
A) intangible
B) virtual
C) inexhaustible
D) rare correct answers rare
Connect Plus Cellular is a leading mobile network operator. Since most of the resources used by
Connect Plus Cellular is easily available, the company's brand name is the only resource that
distinguishes it from the other operators. No other competitor in the industry has a strong brand
name like that of Connect Plus Cellular. This unique asset that has helped the company gain a
competitive advantage will be considered as a(n) ________ resource in the VRIO framework.
A) imperishable
B) mobile
C) tangible
D) rare correct answers rare
If a resource is rare or unique to a particular firm, then:
A) the industry in which the firm operates will experience perfect competition.
B) it will be less costly for rivals to imitate the resource.
C) the firm will be able to maintain a competitive advantage for a long period.
D) the mobility of the resource will be high. correct answers the firm will be able to maintain a
competitive advantage for a long period
Onyx Tech Inc.'s competency in designing and manufacturing efficient microprocessors has
made its laptops the most advanced computers in the market. This competency, along with the
just-in-time manufacturing system, has enabled Onyx Tech Inc. to increase its profitability by
lowering its production costs. Thus, Onyx's competency in designing and manufacturing
microprocessors will be considered a(n) ________ resource in the VRIO framework.
A) perishable
B) valuable
C) tangible
D) inexhaustible correct answers valuable
Gene Craft Inc. is the market leader in the pharmaceutical industry. Though most of its resources
are common to those of its competitors, a few rare resources have helped the company gain and
sustain a competitive advantage. Which of the following assets of Gene Craft Inc. is most likely
to be considered a rare resource that is best contributing to its competitive advantage?
A) The company's raw material supplies
B) The company's plant and machinery
C) The company's chemical patents
D) The company's land and buildings correct answers The company's chemical patents
How are the critical assumptions of the resource-based model of a firm fundamentally different
from the way in which a firm is viewed in the perfectly competitive industry structure?
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