MAN4720 Chapter 3

According to the source material, why was the pharmaceutical industry struggling with innovation prior to the COVID-19 pandemic?

Due to stagnant R&D productivity. It was taking more time and billions more dollars to find successful new drugs using traditional, trial-and-error laboratory methods.

Which specific benefit did big data analytics provide to pharmaceutical firms during the development of COVID-19 vaccines?

It allowed for rapid simulation of viral structures and drug interactions, cutting years off the timeframe for finding a viable vaccine candidate.

In the context of internal analysis, how is 'value' defined for a firm's customers?

Value is measured by a product's performance characteristics and by its attributes for which customers are willing to pay

Sustainability of a competitive advantage is a function of which three factors?

The rate of core competence obsolescence. 2. The availability of substitutes. 3. The imitability of the core competence.

What does a firm determine by analyzing its internal organization?

To determine what a firm can do (its strengths and weaknesses) rather than what it might do (opportunities/threats).

Why are intangible resources generally considered a superior source of core competencies compared to tangible resources?

Because they are less visible and more difficult for competitors to understand, purchase, or imitate. They are deeply embedded in the firm’s history and culture.

Which condition affecting managerial decisions arises from the interrelationships among various conditions shaping a firm?

Complexity. This stems from the "web" of connections between the firm’s resources and the environment, making it hard to predict the result of a single decision.

In strategic management, 'judgment' is best described as the capability to:

Make successful decisions when no obviously correct model or rule is available, or when the data is incomplete or ambiguous.

Which of the following is classified as an organizational resource under the category of tangible resources?

The firm's formal reporting structure and its formal planning, controlling, and coordinating systems.

According to the case study in Chapter 3, what are the primary core competencies that have sustained Harley-Davidson during difficult periods?

Its strong brand loyalty and the "Harley lifestyle" (organizational culture), which makes its customers emotionally invested in the product regardless of technical specs.

What is the primary risk associated with 'core rigidities' in an organization?

That a former core competence becomes a weakness because management refuses to adapt it. A core rigidity prevents the firm from innovating when the environment shifts (like Kodak and digital film).

The text uses an airplane example to illustrate which limitation of tangible resources?

It shows that a tangible resource (an airplane) is useless without the intangible capability (the pilot's skill/coordination) to fly it. Tangible resources need intangible capabilities to create value.

China’s strategic plan for its pharmaceutical industry involves which of the following elements?

Moving from being a low-cost manufacturer of generics to becoming a global innovator in drug discovery and high-tech biotechnology.

A 'global mind-set' is characterized by the ability to manage an internal organization without:

Being bound by the assumptions of a single country, culture, or context. It means looking at the whole world as a source of talent and ideas.

Which category of intangible resources includes 'trust' and 'abilities to collaborate'?

Social Capital. This represents the value of the relationships and networks a firm has built both internally (with employees) and externally (with suppliers).

Which of the following best defines the concept of 'strategic human capital' within a firm?

The knowledge and skills of the firm's entire workforce that can be leveraged to achieve strategic goals.

According to the textbook, why might Apple's research and development (R&D) be considered a capability rather than just a collection of resources?

Because it represents the integrative skill of combining hardware, software, and design into a single user experience. The coordination of these resources is the capability

Under the four criteria of sustainable competitive advantage, what is the primary function of 'valuable capabilities'?

They allow a firm to exploit opportunities or neutralize threats in its external environment.

What is the likely competitive consequence for a firm that possesses a capability that is valuable but not rare?

Competitive Parity. The firm is equal to its competitors, but it has no advantage because everyone else has the same capability.

A firm's unique organizational culture, developed over decades, is difficult for rivals to copy. Which reason for being 'costly to imitate' does this describe?

Unique historical conditions. A newer firm cannot go back in time and recreate the 50-year history that built that specific culture.

Which of the following best describes the concept of 'causal ambiguity' in the context of building core competencies?

It is when competitors cannot clearly identify the exact link between a firm's resources and its competitive advantage. If they don't know why you are winning, they can't copy you.

How does 'social complexity' act as a barrier to imitation for a company like Southwest Airlines?

The advantage is based on interpersonal relationships and trust among pilots, ground crews, and managers. Rivals can buy the same planes, but they can't buy the "spirit" of the social interactions.

Which of the following is categorized as a 'support function' rather than a 'value chain activity'?

Human Resources Management or Procurement. (Value chain activities include things like Operations, Marketing, and Service).

What is the primary risk associated with a 'value creation system' where all parts are interdependent?

That a failure in one part of the chain can cause the entire system to fail, as all other activities are waiting on that one piece.

When should a firm consider outsourcing a specific value-creating activity?

When the firm cannot create value in that activity or when it is at a substantial disadvantage compared to an external provider who can do it better or cheaper.

Which of the following is a significant concern or disadvantage associated with outsourcing?

The loss of innovation capability. By outsourcing a task, a firm might lose the "know-how" required to innovate in that area in the future.

What happens when a firm develops a 'core rigidity'?

The firm becomes stagnant. Its past success becomes a "seed of organizational failure" because it stops asking "how can we do this better?" and starts saying "this is how we've always done it."

In the case of Patagonia, which factor most contributes to its 'green' image being a costly-to-imitate core competence?

Its authenticity. Patagonia has been dedicated to the environment for 40 years; a new company can't just buy that track record, making it a costly-to-imitate capability.

Why is 'social capital' considered valuable when building relationships with stakeholders?

It builds trust and cooperation, which reduces the cost of doing business and gives the firm better access to information and resources during a crisis.

According to the value chain model, what is the specific purpose of 'Operations'?

The activities necessary to transform inputs into the final product form.