# Introduction to Business Strategy

## 🧭 Emoji Legend (Note Formatting Guide)
<details>
<summary>🧭 Click to expand Emoji Legend</summary>

| Icon | Meaning / Use Case | Example Usage |
|:----:|--------------------|----------------|
| 🖊️ | **Notes** - introduces the origin of the notes | “🖊️ Video Lessons” |
| 🧩 | **Main topic or section header** — introduces a major theme or concept | “## 🧩 Lean Operations - M9L1” |
| 🔸 | **Major concept or subsection** — represents a key idea under the main topic | “### 🔸 What is the Philosophy of Lean?” |
| 🔹 | **Detailed operation or example** — used for examples or reinforcing the concept | “### 🔹 Success Story” |
| 🎯 | **Goal / Purpose** — clarifies what we’re trying to achieve | “🎯 Goal: Count how many rows belong to each group.” |
| 💡 | **Tip / Takeaway / Insight** — highlights key points, advice, or conceptual notes | “💡 Takeaway: Use .agg() for multiple summary stats.” |
| ❓ | **Question** - used for identifying homework/assessment questions | “## ❓ Self-Assessments/Notebook Questions” |
| 🧠 | **Conceptual Insight** — emphasizes mental models or deeper understanding | “🧠 Think of groupby() as split → apply → combine.” |
| 📘 | **Reference / Documentation Link** — links to external docs or sources | “📘 [Pandas MultiIndex Documentation](https://pandas.pydata.org/pandas-docs/stable/user_guide/advanced.html)” |
| 🪄 | **Trick / Tip** — optional visual for clever techniques or shortcuts | “🪄 Use .apply() to manipulate each group independently.” |
| 🧭 | **Legend / Navigation Aid** — used for orientation or overview sections | “## 🧭 Emoji Legend (Note Formatting Guide)” |
| ⚙️ | **Mechanics** — explains what’s happening under the hood | “⚙️ Mechanics: Pandas scans column values and builds sub-DataFrames.” |

---

🪄 *Tip:* All of these are Unicode emojis that work natively in HackMD, GitHub, Notion, and most Markdown renderers.
You can insert them using your OS emoji picker:
- **Windows:** `Win + .`
- **macOS:** `Cmd + Ctrl + Space`

</details>

## 🧭 Table of Contents
[TOC]

# 🖊️ Video Lessons

## 🧩 M15L1 - Analysis Lesson Overview

Analysis is about understanding and gaining insight into the internal and external environments of a firm.
* External Environment Analysis is for identifying:
* future opportunities
* potential threats
* Internal Environment Analysis is for identifying:
* organizational strengths
* organizational weaknesses (relative to external threats and opportunities)

**Lesson Objectives**:
* Explain the components of a firm's Internal & External (I & E) environments
* Examine management theories for assessing I & E environments:
* Structure-Conduct-Performance Model
* Resource-Based View of Competitive Advantage
* Learn and apply analytical frameworks to the I & E environments of a firm
* Combine I & E analysis into a SWOT analysis

---

## 🧩 M15L2 - The External Environment

++External Environment++ - the factors, forces, situations and/or events **OUTSIDE** the organization that affect its performance

### 🔸 The External Environment


**🧠 Insight**: Think of the External Environment as layers surrounding the firm. The further we go, the less influence management has to manipulate the layer.

**💡 Note**: The acronym for this is FMIG → F--k MiG (Soviet Aircraft)

* **Firm** - organizational structure, policies, rules, culture, procedures, products, technology, physical and intangible assets, and human capital
* **Market** - customers, competitors, business partners and communities in which the firm operates
* ++Strategic Groups++ - Direct competitors with similar business models and strategies
* **Industry** - market and strategic groups; considering indirect competitors that offer substitute products
* **General Environment** - political, economic, socio-cultural/demographic, technological, ecological and legal/ethical components (PESTEL/PEST Analysis)

---

## 🧩 M15L3 - PESTEL Framework

**💡 Note**: PESTEL → ++P++olitical, ++E++conomic, ++S++ocio-Cultural, ++T++echnological, ++E++cological, ++L++egal

A ++PESTEL Analysis++ is a simple tool used in External analysis to identify key macro-environmental forces with the potential to affect either the firm or the industry.
* Low probability & impact PESTEL factors can be ignored
* High probability & impact PESTEL factors must be addressed

### 🔸 PESTEL Objectives

* Identify External 'macro-factors' that can impact the firm or the industry
* Research and analyze trends to aid in predicting future outcomes
* Identify threats and opportunities based on those predictions that can affect the firm's performance

### 🔸 PESTEL Analysis

General Rule of Thumb:
* Negative forces will make the market harder to do business in; reduced profits and overtime reduce the market/industry
* Positive forces will make the market easier to do business in; increased profits and overtime expand the market/industry

**Political**


* Can be influenced by individual firm action OUTSIDE the market. Examples:
* Lobbying efforts to influence legislation
* Supporting specific political candidates
* Litigating against policy and legislation

**Economic**


* Tend to impact spending at both the consumer and business levels. Examples:
* Recessions → frugal spending by both consumers and businesses
* Booms → increased spending due to more disposable income

**Socio-Cultural (& Demographic)**


* Demographics deals with population and group sizes. Example:
* The aging Baby Boomer population
* Socio-Culture deals with values and beliefs. Example:
* Attitudes toward greener vehicles

**Technology**


* Can impact business processes, products and buying behaviors
* Often an enabler of other PESTEL factors

**Ecological**


* Growing in importance
* Often consumers and employees prefer to buy from businesses who are responsible, good stewards of the environment

**Legal**


* New laws, regulations, and policies can affect the firm, industry, market or all three

---

## 🧩 M15L4 - PESTEL Framework - Tesla

### 🔸 Prioritization Approach


* Monitor & Strategy tiles represent opportunities & threats

### 🔸 PESTEL Analysis - Tesla


---

## 🧩 M15L5 - The Structure-Conduct-Performance (SPC) Model

**💡 Note**: The SPC Model assumes that Industry ++Structure++ determines Firm ++Conduct++ which then drives Firm ++Performance++.


### 🔸 Competitive Structure of Different Industries

The graphic below shows a continuum of competition, describing the competitive structure of different industries.


**Perfect Competition**

Defined by:
* Large numbers of competing firms
* Products are homogeneous with respect to cost and attributes
* Entry/Exit costs are low
* ++Price Takers++ - firms that change their price in response to changes in supply/demand in their industry, as compared to influencing prices

**💡 Note**: Typically found in commodities. Little room for profits.

**Monopolistic Competition**

Defined by:
* Large number of competing firms
* Products are NOT homogeneous, but are differentiated
* Entry/Exit costs are low
* SOME pricing power

These firms can employ differentiation or a cost leadership strategy. They are always threatened by the actions of other competing firms. Examples include: Universities, automobile dealerships, supermarkets, and fine dining restaurants.

Can employ ++Conduct++ options to gain a competitive advantage such as:
* Pricing
* Innovation
* Service
* Branding
* Extensive Advertising
* Enhanced Customer Experience
* Customer Convenience

**💡 Note**: Wide range of profitability.

**Oligopoly**

Defined by:
* Small number of competing firms
* Either homo or heterogeneous products
* Entry/Exit costs are high

Examples include: Soft drink manufacturers, aircraft manufacturers, overnight mail delivery, chip fabricators, medical devices and smartphone manufacturers.

These firms have INTERDEPENDENT marketing strategies meaning that the actions of one firm will provoke a similar response from their direct competitors. Price wars are avoided as they only server to lower the overall industry margins.

**💡 Note**: High profitability.

**Monopoly**

Defined by:
* Single firm
* Considerable pricing power
* UNIQUE product
* Entry/Exit costs are extremely high

Extremely rare, but one example is Microsoft's Operating System.

++Natural Monopolies++ - government granted monopoly rights BUT the government controls pricing and profits

---

## 🧩 M15L6 - Intro the Porter Five Forces Model

Derived from the SCP Model, there are 5 identified forces that determine the attractiveness of an industry. Attractiveness refers to the industry profitability.

### 🔸 SCP Model Recap

The closer the industry is to perfect competition, the less attractive it becomes.

The Porter Five Forces Model focuses on industry structure and how factors that drive structure impact firm profitability.

### 🔸 Industries Vary in Profitability

This chart shows firm attractiveness using ROE as a metric. Industry profitability differences can be dramatic.


In Porters Five Forces Model, the stronger the force, the greater the downward pressure on industry gross margins. As a general rule, one or two forces will have the most impact.

When combined, the Forces determine long-term profitability within the sector. They affect:
* Prices
* Necessary investments for competitiveness
* Market share
* Potential profits
* Profit margins
* Industry volumes

### 🔸 Porter Five Forces Model


---

## 🧩 M15L7 - Porter Five Forces Analysis P1

### 🔸 General Concepts

**Concentration (& Ratio)**

++Concentration++ - refers to the number of firms in an industry; when considering SCP, Perfect Competition is the least concentrated whereas Monopoly is the most concentrated

++Concentration Ratio++ - $\frac{\text{combined shares of a given number of firms}}{\text{whole market size}}$
* Used to assess the extent to which a market is Oligopolistic
* Classifications:
* Low - 0% - 50%
* Oligopoly - > 60%
* Monopoly - ~100%
* High - 80% - 100%

$CR4$ is the most common, which is the combined share of the 4 largest competitors in an industry.

In terms of Five Forces, higher concentration ratios usually result in higher bargaining power. Also impacts Competitive Rivalry and Buyer Bargaining Power.

**Switching Costs**

++Switching Costs++ - costs that a consumer incurs to change brands, suppliers, or products. Can be monetary, psychological, effort-based or time-based.
* Can be embedded in products to discourage switching

In terms of Five Forces, this affects all of the factors.

**Forward & Backward Integration**

++Forward Integration++ - a form of vertical integration where a business expands to control distribution or supply of a company's product.
* Moving down the supply chain
* Example: Building retail or distribution centers

++Backward Integration++ - a form of vertical integration where a business expands to control the supply of inputs.
* Moving up the supply chain
* Example: Purchasing raw material provider's company

In terms of Five Forces, this impacts Buyer Bargaining Power and Supplier Bargaining Power.

---

## 🧩 M15L8 - Porter Five Forces Analysis P2

Discussing the Forces that make up the Porter Five Forces Model.


**Bargaining Power of Suppliers**

Strong Bargaining Power allows suppliers to sell higher-priced or lower-quality raw materials, parts, or components to competitors/producers.

Strong Bargaining Power of Suppliers occurs when:
* Few suppliers, but many buyers
* Competitors buy from suppliers in small quantities
* Suppliers hold scarce resources
* Switching costs are high
* Suppliers can forward integrate

**Bargaining Power of Buyers**

These are the customers of the industry competitors. Buyers have the power to demand lower prices or higher product quality when their bargaining power is strong. Both demands lead to lower profits.

Strong Bargaining Power of Buyers occurs when:
* Few buyers exist
* Buying in large quantities
* Undifferentiated competitor products
* Buyers threaten to backwards integrate
* Many substitutes available
* Buyers are price sensitive

For consumer product industries, buyers can either not buy or easily switch or buy a substitute.

**Substitute**

++Substitute++ - an alternative product or service that serves a similar purpose

Examples of a Substitute include:
* Email → Express mail
* Plastic → Glass
* Coffee → Tea
* Bio-Fuel → Gasoline
* Used Cars → New Cars
* Tablets → Laptops

The availability of substitutes influences price. The more substitutes that are available, the lesser the industry profitability.

**Threat of New Entrants**

The threat of new entrants determines how difficult or costly it is to enter a particular industry.

An industry that is profitable with a low entry barrier will soon find itself less profitable due to new rivals. Therefore, organizations should create high entry barriers.

The threat of new entrants is high when:
* Entry costs are low
* Existing companies cannot stop or retaliate against new entrants
* Existing firms lack patents, trademarks or establish brand reputations
* No governmental regulations restricting entry
* Low switching costs
* Low customer loyalty
* Similar industry products with little to no differentiation
* Existing distribution channels are open to new entrants
* Economies of scale can be easily achieved or are not important

**Rivalry Among Existing Competitors**

The most dominant force. Think of it is a continuum where one end is civilized, constructive competition and the other end is pure price competition.

Rivalry Competition is intense when:
* Competition is highly fragmented
* Exit barriers are high
* Industry growth is slow
* Products are not differentiated
* Products are easily substituted
* Switching costs is low
* Customer loyalty is low
* Economies of Scale are significant AND production volumes need to be kept high

---

## 🧩 M15L9 - Porter Five Forces Analysis P3

### 🔸 Industries are Dynamic

Industries evolve over time; a Porter Five Forces Analysis is conducted at a point in time. It must be revisited periodically.

Below are some ways industry can evolve:
* Barriers to entry can be made more or less difficult - patents expire, industries scale up, buyer loyalty strengthens, technology obsoletes current infrastructure, changes in regulation
* Supplier power can increase through supplier consolidation OR reduced through vertical integration
* Advances in technology creating new substitutes that leapfrog current product lines
* Competitor rivalry intensifies as industries mature and growth rate stabilizes
* Socio-cultural, demographic, technological changes impact buyer preferences

### 🔸 Complements Stimulate Demand

A sixth force in developing a Porter Model. It identifies products that complement the products that industry competitors sell.

++Complement++ - a product, service, or competency that adds value to the original product offering when the two are used in tandem
* Tend to result in higher margins and profits
* Examples:
* Video game consoles and video games
* App Store and iPhone
* Home Theaters and DVDs


With the inclusion of the new force, we can see distinct pairs of forces.

### 🔸 A Porter Analysis Drives Strategic Insights

Some ways companies can mitigate structural impediment to firm profitability:
* Increase product differentiation
* Diversify product lines
* Introduce or strengthen switching costs
* Continually innovate to increase product value
* Alter bargaining relationships between the industry competitors and buyers and suppliers
* Build barriers to entry to keep new competition out
* Develop complements or build strategic partnership with complement providers

---

## 🧩 Synchronous Class (11/18/2025) -

**Agenda**:
* The Strategic Management Process
* External Analysis
* Internal Analysis

### 🔸 The Strategic Management Process


**Conventional/Traditional Approach Limitations**:

* Assumes a single, predictable future which may fit a stable external environment but must be adjusted in a dynamic external environment
* Works best in low-risk planing situations
* Top-down but allows for bottom-up feedback and inputs
* Ignores that "big ideas" can emerge within the organization

**Scenario-Based Planning**

* Assumes multiple plausible futures

**Strategy as Planned Emergence**:

* Recognizes that great strategic ideas can come from anywhere in the firm

### 🔸 Business Strategy Analysis Frameworks


### 🔸 Why is External Analysis Important?

Overall performance is significantly impacted by the external environment and how well management understands it.

### 🔸 Strategic Groups


Companies within the same strategic group are DIRECT COMPETITORS:
* Very similar business models
* Rivalry generally more intense

Strategic groups differ from one another along dimensions like:
* Expenditures on R&D
* Technology
* Product differentiation
* Product pricing
* Market segments
* Distribution channels
* Customer service

### 🔸 The External Environment


### 🔸 PESTEL Analysis

* You MUST view all 6 factors to gain the benefits from PESTEL

Here is an example of a PESTEL analysis for supermarket chains:


### 🔸 Resource Based View of Competitive Advantage

RBV proposes that firms are heterogeneous because they posses heterogeneous resources, meaning firms can have different strategies because they have different resource mixes.



---

## 🧩 M15L10 - Porter Five Forces Model - Tesla Example

**Threat of New Entrants**


This is labeled weak because, at the time, this had little to no pressure on Tesla's profits.

**Power of Suppliers**


Can be reduced by:
* vertically integrating

**Power of Buyers**


Can be reduced by:
* Innovation and diversifying product line

**Substitute Products/Services**


Can be reduced by:
* becoming more service oriented
* developing products that uniquely meet target market needs

**Competitor Rivalry**


Can be reduced by:
* Innovation and diversifying product line
* Software and leading edge technology

**Summary**


The Five Forces for Tesla are labeled as such because the industry is still fairly new, or was at the time of the video. It will take time for the industry to develop and create steady profits.

---

## 🧩 M15L11 - Internal Analysis

The purpose of Internal Analysis is to:
* analyze and assess the internal capabilities and resources of the firm
* evaluate the firm's ability to leverage it's strengths OR mitigate it's weaknesses when pursuing external opportunities or protecting against external threats

Useful tools for Internal Analysis include:
* VRIO Analysis
* Value Chain Analysis
* Ratio Analysis
* Benchmarking

### 🔸 Internal Analysis


The image above depicts the relationship between a firm's internal and external environment.

#### 🔸 Internal Environment Aspects

++Core Competencies++ - unique strengths that drive competitive advantage

++Resources++ - tangible and intangible assets of the firm
* tangible example: capital, land, buildings, plants, etc.
* intangible example: brand equity, reputation, partnerships, intellectual property, etc.


++Capabilities++ - organization and managerial skills; things the organization does

++Activities++ - transforms inputs into outputs

### 🔸 Summary

Internal Analysis is where strategist focus on identifying and assessing organizational strengths in capabilities, resources, and activities CRITICAL to the firm's competitive advantage. Also used to identify weaknesses to external threats.

---

## 🧩 M15L12 - Resource-Based View of Competitive Advantage

++Resource-Based View++ - an approach that stresses the asset base of the firm as the source for creating competitive advantage

For a resource to be considered a competitive advantage, it must be valuable, rare, costly to imitate and organize to capture value.

### 🔸 Resource-Based View


This image depicts the resource-based view theory; firms are comprised of "resource bundles" of tangible and intangible assets which are unique to the firm and generally immobile (not easily transferred to another organization).

#### 🔸 Tangible and Intangible

**Tangible**
* Easiest to identify
* Physical Assets (Land, buildings, etc)
* Financial Resources
* Need to understand their potential for creating competitive advantage

**Intangible**
* More likely to create a sustainable competitive advantage
* Difficult to measure - especially on Balance Sheet
* Large market-to-book valuation disparities
* Important Ones include: Brand's Technology/Intellectual Property

**Example - Humans**

Human Capital is an example of both tangible and intangible assets.

* Skills, knowledge, know-how → Tangible because these can freely move across firms
* MOST IMPORTANT resource for many firms is their human capital
* Firms don't own their employees

#### 🔸 Heterogeneous and Immobile

**Heterogeneous**
* Skills
* Capabilities
* Other Resources

**Immobile**
* Resources
* Intangible Resources (Brand Equity, Processes, Knowledge, Intellectual Property)
* Human Capital (SOMETIMES)
* Examples: Lebron James → Contracts, Elon Musk & Tesla

---

## 🧩 M15L13 - VRIO Analysis


VRIO stands for Valuable, Rare, costly to Imitate, and Organized to capture value


The framework for VRIO is a decision tree with 4 questions:
* Does the resource enable a firm to exploit opportunities or defend against threats? If yes, then it is ++valuable++.
* Is the resource acquirable by only a few firms? If yes, then it is ++rare++.
* Is the resource imitable, purchasable, or substitutable? If no, then it is ++costly to imitate++. Key reasons:
* Historical Condition - takes a long time to imitate
* Causal Ambiguity - competitors cannot identify it
* Social Complexity - hard to copy a business system due to culture
* Does the firm have appropriate organizational structure, management controls, and compensation policies? If yes, then it is ++Organized to capture value++.


VRIO can be applied to capabilities or specific assets however, intangible assets are often the source of competitive advantage.

---

## 🧩 M15L14 - VRIO Analysis - Tesla Case

**Tesla's Factory in Freemont, California**
* Valuable? Yes.
* Rare? No.
* Imitable? Yes.
* Organized? Maybe.

Conclusion: Competitive parity at best.

**Case Exercise**


---

## 🧩 M15L15 - Value Chain Analysis

++Value Chain++ - the full range of activities a firm performs to bring a product from conception to delivery.

A value chain may include, but is not limited to:
* design
* production
* operations
* marketing
* distribution

**Example**:

Automobile manufacturer's value chain starts with Raw Materials + Parts + Components + Software and ends with Post Sales Service + Support

Service firms, like Facebook, have a similar value chain but typically substitute operational processes for manufacturing processes.

### 🔸 VCA for Consumer Products Company


Primary Activities create value and include:
* ++In-Bound Logistics++ - defined as either simply transportation OR supply chain management
* ++Manufacturing & Assembly++ - raw materials and other inputs are turned into the final product
* ++Distribution/Out-Bound Logistics++ - distribution of the final product to customers
* ++Marketing & Sales++ - advertising, promotion, sales force organization, selecting distribution channels, pricing and managing customer relationships
* ++Post-Sales Support++ - activities needed to maintain the product's performance after it has been produced and sold

Support Activities help enable primary activities and include:
* ++Research & Development++ - researching the firm's market and customer needs then developing new and improved products/services to meet those needs
* ++Information Systems++ - the technology involved in the firm's processes
* ++Human Resources++ - activities involved in hiring and retaining resources
* ++Firm Infrastructure++ - refers mainly to the management of the firms physical infrastructure including the assets of the firm
* ++Accounting, Financing and Planning++ - administrative functions that support many of the planning and control functions of the organization

To generate a competitive advantage, each distinct activity needs to add value to the product or service offering OR lower the cost of that product offering

---

## 🧩 M15L16 - Ratio Analysis & Benchmarking

++Benchmarking++ - when the firm compares itself to another firm OR a relevant set of firms

* Senior management uses ratio analysis to evaluate firm operation effectiveness and lower-level managers' and employees' performance.
* Key metrics, often stated as ratios, hold senior managers accountable.
* Ratios help identify operational strengths and areas needing improvement.
* Useful for making comparisons over time to identify trends and against other firms to gauge relative performance.

### 🔸 Financial Ratios

Ratios are derived from:
* Balance Sheet
* Income Statement
* Statement of Cash Flows

**Types of Financial Ratios**
* Activity and Asset Quality Ratios
* Liquidity Ratios
* Capital Adequacy Ratios
* Earnings and Profitability Ratios

Analysis focuses on internal operations; excludes market-based ratios like Earnings Per Share and Price/Earnings Multiple. Key ratios allow trend analysis over multiple years, critical for identifying areas needing improvement.

### 🔸 Benchmarking

Benchmarking involves comparing key processes and metrics to best practices or industry standards. Types of Benchmarking:
* Process Benchmarking:
* Compares efficiency and effectiveness of production, decision-making, and business processes.
* Helps firms compare internal processes to identify strengths and weaknesses.
* Product Benchmarking:
* Done by marketing to compare product features, quality, and performance against competitors.
* Functional Benchmarking:
* Evaluates potential for outsourcing non-strategic capabilities to lower operating costs.
* Financial Benchmarking:
* Assesses overall firm competitiveness and financial performance.
* Benchmarking goals:
* Achieve operational excellence
* Attain competitive parity, not necessarily an advantage

---

## 🧩 M15L17 - SWOT Analysis

# ❓ Self-Assessment Questions

1. One reason for performing an external analysis is that the strategist can identify potential opportunities and threats used later for strategy formulation.

*True*

2. A strategic group is a cluster of firms that produce complementary products that positively impacts a firm's growth strategy.

*False*

3. Which statement below is TRUE?

*Intangible assets are more likely to drive sustainable competitive advantage than physical assets*

4. It is important to consider a firm's external environment when performing an internal analysis.

*True*

5. Which ONE of the following industry characteristics would likely NOT result in fierce competitive rivalry?

*Very high market growth rates*

6. The external environment of a firm comprises all of the following except: Select all that apply:

*Firm Culture & CEO*

7. The primary objective of Porter's Five Forces analysis is to quantify the impact of macro-economic forces on the firm

*False*

8. Which ONE of the following is NOT a Force in the Porter Five Forces model?

*Threat of complementary products*

9. Which ONE of the following is NOT a macro-force in the PESTEL framework?

*Diffusion of technical knowledge*

10. Which ONE of the following would not be considered to be an economic factor when performing a PESTEL Analysis?

*Taxation Policy*

11. Strong brands and customer loyalty, the existence of powerful patents and other intellectual property, and asset specificity are factors that would typically result in (choose the best answer from the list below).

*Significant barriers to entry*

12. The primary threat (or impact) that a substitute product has on an industry is that it can result in limits placed on the competitors abilities to raise prices.

*True*

13. A measure of the aggregate market shares of the top competitors in an industry is called the:

*Concentration Ratio*

14. The idea that the source of competitive advantage is the resources and the capabilities of the firm is referred to as __________.

*Resource Based View of Competitive Advantage*

15. VRIO supports a careful analysis of firm activities that allows managers to obtain a more detailed and fine-grained understanding of how the firm's economic value creation breaks down into a distinct set of activities.

*False*

16. The resource based view is a model that sees types of resources as key to superior firm performance.

*True*

17. Which ONE of the following is an example of a tangible resource (asset)?

*Cash*

18. The Coca-Cola brand is an example of a:

*Intangible resource*

19. Firm X would like to improve its performance. You are a business strategy consultant and have been hired to review the company's performance and make recommendations. What tools and frameworks would you use to analyze the internal performance of the company? Select all that apply

*Ratio Analysis & SWOT Analysis & Benchmarking*

20. An activity that a company has outsourced can still be considered as VRIO since the company still owns all the rights to the activity and its outputs

*False*

21. Two assumptions are critical in the resource based model -- resource homogeneity and resource immobility.

*False*

22. A resource must be VRIO if it can help drive a sustainable competitive advantage. One condition of VRIO is costly to imitate (the "I"). In the video lesson we discussed why resources can be costly to imitate. Which ONE of the following is NOT a reason discussed.

*cultural dependancy*

23. Competitive advantage is more likely to be based on intangible resources.

*True*

24. In performing a value chain analysis for a pharmaceutical firm which of the following would be considered to be Primary activities? Indicate by checking the activities in the list below. HINT: The other classification of activities is called support or indirect activities.

*Sales and Marketing & Manufacturing & Customer Service*

25. _________ are the organizational and management skills necessary to orchestrate a diverse set of resources to deploy them strategically.

*Capabilities*

26.You are preparing a SWOT analysis for a global franchisor of health oriented fast food restaurants. Your firm is different from many fast food franchises in that the menu is focused on healthy options rather than high carbohydrate and fatty foods. Your manager has just instructed you on the proper way to construct a SWOT (think back to the video lesson). You have developed a list of positives you have gleamed from external and internal analysis. Look over the list below and identify those positives that should be classified as a STRENGTH. You must successfully identify all of the Strengths to get credit for this question. HINT: The objective of the Question for to Determine if the Student Can recognize Strengths vs. Opportunities.

*Outstanding brand & Experienced and successful management team & well financed & efficient*