17.The four tests of a resource's competitive power are often referred to as the:A.SCIR test, which asks if a resource is sustainable, competitive, internalized, andreproducible.B.competitive advantage sustainablemethod test.C.reliability resourcessimulation.D. VRIN test, which asks if a resource is valuable, rare, inimitable, and non-substitutable.E.organizational capability metricanalysis.The four tests of a resource's competitive power are often referred to as the VRIN test, which asks if a resourceis valuable, rare, inimitable, and non-substitutable. Show
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AACSB: Analytical ThinkingAccessibility: Keyboard NavigationBlooms: RememberDifficulty: 2 MediumLearning Objective: 04-02 Why a company's resources and capabilities are centrally important in giving the company acompetitive edge over rivals.Topic: Sustaining a Competitive Advantage18.The spotlight in analyzing a company's resources, internal circumstances, and competitiveness includes suchquestions/concerns as: Get answer to your question and much more AACSB: Analytical ThinkingAccessibility: Keyboard Navigation make a list of the industry's key success factors and other telling measures of competitive strength or weakness (6 to 10 measures usually suffice). Step 2 is to assign weights to each of the measures of competitive strength based on their perceived importance. (The sum of the weights for each measure must add up to 1.) Step 3 is to calculate weighted strength ratings by scoring each competitor on each strength measure (using a 1-to-10 rating scale, where 1 is very weak and 10 is very strong) and multiplying the assigned rating by the assigned weight. Step 4 is to sum the weighted strength ratings on each factor to get an overall measure of competitive strength for each company being rated. Step 5 is to use the overall strength ratings to draw conclusions about the size and extent of the company's net competitive advantage or disadvantage and to take specific note of areas of strength and weakness.
Terms in this set (25)What are the four tests that should be used to measure the competitive power of a company's resource strengths? VRIN Test Define SWOT analysis and explain why it is a strategically important analytical tool. Strengths, Weaknesses, Opportunities,
Threats Define company value chain and describe types of activities in this value chain with examples. -Identifies the primary activities and related support activities that create customer value Describe a weighted competitive strength assessment, its five steps, and its strategic implications. -Focuses on the company's overall competitive strength Explain the difference between a company activity, capability, competence, a core competence, and a distinctive competence. Company
activity- any activity engaged in the primary purpose of making a profit Draw the five-forces model of competition, briefly describe the relevance of each of the five forces in determining the overall strength of competitive pressures a company faces, and explain implications for managers Supplier Power- charging higher prices, limiting quantity, shifting costs Identify and briefly explain any three of the factors that influence the strength or intensity of competitive rivalry among an industry's member firms. -Rivalry increases when buyer demand is growing slowly or declining Identify and briefly explain any three factors that intensify competitive pressures stemming from the threat that new firms will enter the industry. -Strong brand preference and high degree of customer
loyalty Identify and briefly explain any three of the factors that influence the strength of competition from substitute products. -Whether substitutes are readily available and attractively priced -Whether buyers view substitutes as being comparable or better in quality, performance etc. -The costs that buyers incur in switching to the substitutes are high or low Identify and briefly explain any three of the factors that influence the bargaining strength and leverage of suppliers. -Demand for suppliers' products is high and they are in short supply -Whether industry members are major customers of suppliers -Whether suppliers provide an item that accounts for a sizeable fraction Identify and briefly explain any three factors that lead to strong bargaining power on the part of buyers. -buyer demand is weak in
relation to industry supply -industry goods are standardized or differentiation is weak -costs of switching to competing brands are relatively low Describe steps of constructing a strategic group map and identify at least three benefits of constructing a strategic group map. 1st: identify competitive characteristics that differentiate firms What are the five phases of the strategy-making, strategy-executing process and what does each one involve? 1. Developing a strategic vision, a mission, and a set of values Define and briefly explain what is meant by each of the following terms: Vision, Mission, and Core Values a) Vision-Delineates management's future aspirations for the business to its stakeholders, Sets out the
compelling rationale (strategic soundness) for the firm's direction (Ex: Gallup's vision-he world's preeminent collector and disseminator of quality information) Identify four actions that are key elements of leading the strategy execution process. -oversee the company's financial accounting and financial reporting practices Discuss the meaning of each of the following levels of strategy and provide real business examples of each strategy a) Corporate strategy- A strategy at multi-business level that indicates in which industries and national markets an organization intends to compete (Example: GE) Explain the difference between financial objectives and strategic objectives and explain why an organization needs both financial and strategic objectives. Give examples of each objective. Financial Objectives-Related to the financial performance targets management has established for the organization to achieve, Focused internally on the firm's operations and activities Describe your life mission, values, and vision. ... Define strategy and competitive advantage. And explain the connection between a company's strategy and its quest for sustainable competitive advantage. Strategy is a plan used to go above and beyond by performing different activities than competitors. Competitive advantage has 4 different approaches low cost provider, differentiation on features, best cost provider, and focusing on narrow market niche. The connection between the two is that in order to achieve competitive advantage of providing buyers with superior value a company needs to have a strategy in place. List six things to look for in identifying the components of an organization's strategy. Changing market conditions, advancing technology, fresh moves of competitors, shifting buyer needs, emerging market opportunities, new ideas for improving the strategy. Identify and briefly describe the four most frequently used strategic approaches to achieving a sustainable competitive advantage. Provide examples of each approach. - Low cost provider: prices lower than competitors (Walmart) Why does a company's strategy tend to evolve over time? What are definitions of proactive and reactive strategies? Provide examples of proactive and reactive strategies? The circumstances of a company are constantly changing and management constantly wanting to improve their strategy. Proactive is strategies that are planned. (FedEx) Reactive is strategies that form when the environment changed. (Honda) Explain in detail what a company's business model entails? Provide a business example. -A business model is a blueprint for delivering a valuable product or service to customers in a manner that will generate revenues sufficient to cover costs and yield an attractive profit. Business models entail the customer value proposition (CVP), which lays out the company's approach to satisfying buyer wants and needs at a price customers will consider a good value, and a profit formula that describes the company's approach to determining a cost structure that will allow for acceptable profits, given the pricing tied to the CVP. Printer manufacturers like Epson pursue a business model that entails selling printers at a low price, which is virtually break-even for them, and then making large profit margins on the buyer's future purchases of printer supplies such as ink cartridges. Identify and briefly define three central questions that managers are facing. -What is our present situation? Essentially performing a SWOT analysis to determine where the company stands internally and externally. -Where do we want to go from here? Determine what goals the company has for their future. -How do we get to where we want to be? Determine strategic and competitive approaches the company will have to implement in order to get where it needs to be, and what business model or supportive actions will need to take place. What are the three tests of a winning strategy? -Fit test: a strategy must be well matched to industry and competitive conditions, best market opportunities, and other important aspects of the environment. -Competitive advantage test: a strategy must enable a company to achieve a competitive advantage over key rivals that is long lasting. -Performance test: competitive strength, market standing, profitability, and financial strength are all indicators of the performance of a company. 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Your uncle deposits an amount today in a bank paying 6% annual interest, which will provide the needed $5,000 payments. a. How large must the deposit be? b. How much will be in the account immediately after you make the first withdrawal? Verified answer QUESTION Avondale Aeronautics has perpetual preferred stock outstanding with a par value of $100. The stock pays a quarterly dividend of$1.00 and its current price is $45. a. What is its nominal annual rate of return? b. What is its effective annual rate of return? Verified answer QUESTION If investors’ aversion to risk increased, would the risk premium on a high-beta stock increase by more or less than that on a low-beta stock? Explain. Verified answer Recommended textbook solutions Business Math17th EditionMary Hansen 3,598 solutions Mathematics with Business Applications6th EditionMcGraw-Hill Education 3,760 solutions Business Math17th EditionMary Hansen 3,598 solutions Accounting: What the Numbers Mean9th EditionDaniel F Viele, David H Marshall, Wayne W McManus 338 solutions Other Quizlet setsbio test 135 terms kpayne161 Fitness & Health Quizzes for Exam 210 terms kim123797 RAT 231 terms chelsea2xoxo To Kill a Mockingbird🎭20 terms shufordta Related questionsQUESTION State 2 benefits and 2 risks for a business of engaging in a joint venture.[4] 4 answers QUESTION Net profit divided by total assets 9 answers QUESTION Ritesh wants to open his own bowling alley that will also serve alcoholic beverages and food. What will Ritesh have to do to start his business? 10 answers QUESTION What are the advantages of sole proprietorships over other forms of business organization? 10 answers What are the four tests that should be used to measure the competitive power of a company's resource strengths?What are the four tests that should be used to measure the competitive power of a company's resource strengths? -Is the resource competitively valuable? -Is the resource rare? -Is the resource hard to copy(Inimitable)? What are the four characteristics of competitive resources?The idea here is that if a firm is to maintain sustainable competitive advantage, it must control a set of exploitable resources that have four critical characteristics. These resources must be (1) valuable, (2) rare, (3) imperfectly imitable (tough to imitate), and (4) nonsubstitutable. What is the competitive advantage test?2. The Competitive Advantage Test : A good strategy leads to sustainable competitive advantage. The bigger the competitive edge that a strategy helps build, the more powerful and effective it is. 3. What are the resources of competitive advantage?Sources of Competitive Advantage. Product Attribute Differentiation. One way to gain an advantage over competitors is by differentiating your product from theirs. ... . Customers' Willingness to Pay. ... . Price Discrimination. ... . Bundled Pricing. ... . Human Capital.. Why is a weighted competitive strength analysis superior?A weighted competitive strength analysis is conceptually stronger than an unweighted analysis because of the inherent weakness in assuming that all the strength measures are equally important.
Why a weighted competitive strength assessment is conceptually superior to an unweighted one?The results are more accurate since they involve a greater amount of data. The weighted analysis is easier to conduct and less cost-intensive. It eliminates the bias introduced for those firms having large market shares. The different measures of competitive strength are unlikely to be equally important.
Which of the following is an accurate interpretation of the overall competitive strength ratings that result from doing a competitive strength assessment?Which of the following is an accurate interpretation or the overall strength scores that result from doing a competitive strength assessment? the higher a company's overall strength score the stronger is its competitiveness and ability to compete successfully against rival industry members.
What is the difference between resources and capabilities?While resources refer to what an organization owns, capabilities refer to what the organization can do. More specifically, capabilities refer to the firm's ability to bundle, manage, or otherwise exploit resources in a manner that provides value added and, hopefully, advantage over competitors.
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In a weighted competitive strength analysis, each strength measure is assigned a weight based on
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