Aacsb reflective thinking accessibility keyboard

AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 04-04 Apply the VRIO framework to assess the competitive implications of a firm's
resources.
Topic: The Resource-Based View
1-360

38. Sarah has recently started a restaurant in a commercial area where there are
many other established restaurants and popular fast food chains. Sarah owns the
plot on which her restaurant is located and this makes her cost of operations lower
than the competitors. This factor allows her to offer her products at a competitive
price. Sarah has also invested a huge amount on the interiors of the restaurant
and in equipping the kitchen with the latest appliances used by her competitors. In
this scenario, which of the following is the most valuable resource for Sarah's
business?
A. The investments made by Sarah on the restaurant's
interiors
B. The latest kitchen equipment that is at par with the restaurant's
competitors
C. The restaurant's late entry into the
market
D. The land owned by Sarah, which reduces cost of
operations
A resource is valuable if it helps a firm increase the perceived value of its product
or service in the eyes of consumers, either by adding attractive features or by
lowering price because the resource helps the firm lower its costs.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 04-04 Apply the VRIO framework to assess the competitive implications of a firm's
resources.
Topic: The Resource-Based View
39. Otion Inc. is a relatively new firm in the consumer electronics industry. The
company's primary objective is to become the market leader in less than 5 years,
for which it has to gain and sustain a competitive advantage. In the context of the
VRIO framework, which of the following resources should Otion Inc. primarily focus
on to achieve its objective?
A. Quality standards, which are common and mandatory throughout
the industry
B. Inexpensive unskilled labor that is easily accessible by all
companies
C. Component parts that are sourced from competitors'
suppliers
D. Production systems that reduce costs by 30 percent below the current
industry standards
Otion Inc. should primarily focus on production systems that reduce costs by 30
percent below industry standards to achieve its objective. A resource is valuable if
it allows a firm to take advantage of an external opportunity and/or neutralize an
external threat.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
1-361

Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 04-04 Apply the VRIO framework to assess the competitive implications of a firm's
resources.
Topic: The Resource-Based View