Term
| Why do industries make different profits? |
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Definition
| These industries have different structures and face different environmental factors or forces that significantly affect profit. |
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Term
| External analysis cannot explain what? |
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Definition
| Intra-Industry Profitability Differential |
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Term
| Intra-Industry Profitability Differential |
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Definition
| Firms in the same industry make different profits. |
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Term
| How can you explain the existence of Intra-Industry Profitability Differential? |
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Definition
| Different firms within the same industry utilize different strategies that significantly affect profit. |
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Term
| What are distinctive competencies? |
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Definition
| Organizational strengths that allow the organization to differentiate the product and provide a product at a lower cost. |
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Term
| What is the intention of internal analysis? |
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Definition
| To realize a firm's strengths and weaknesses. |
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Term
| What are sources of distinctive competencies? |
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Definition
| Resources and Capabilities |
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Term
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Definition
| A company's assets that it owns and has at its disposal, whether they be tangible or intangible. |
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Term
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Definition
| A firm's skills at coordinating resources and putting them into use. |
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Term
| What are two tools you can use for internal analysis? |
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Definition
| Value Chain Analysis & VRIO Framework |
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Term
| What is the purpose of the Value Chain Analysis? |
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Definition
| Understand the process of value creation in a firm's business functions. |
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Term
| What is the purpose of the VRIO Framework? |
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Definition
| Identify resource and capabilities that helps a firm generate a competitive advantage. |
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Term
| What types of activities does the Value Chain Analysis Analyze in order to find the source of profit? |
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Definition
| Support and Primary Activities |
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Term
| What does the value chain not show? |
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Definition
| Whether or not profit sources will be sustainable. |
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Term
| What does the value chain show? |
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Definition
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Term
| What does V R I O stand for? |
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Definition
Value
Rarity
Inimitability
Organization |
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Term
| What are the questions the VRIO Framework asks? |
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Definition
How valuable are the resources a company holds?
How many other firms have the same resources?
Can other companies easily copy and imitate the resources?
Does a firm have complementary resources and capabilities? |
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