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13 Cards in this Set

  • Front
  • Back

What is the internal environment?

The internal environment is the environment within the company. The strengths and weaknesses of a firm in a SWOT analysis. Along the value chain, the internal environment is the primary and secondary activities. Its what the firm can do and its potential.

Why is it important for firms to understand the internal environment?

It’s important because it can help the company with their strategy, which ultimately affects their performance. Using value chain analysis, this can add value to a company through creating competitive advantages along the chain as well as efficiencies.

What are the advantages of a SWOT analysis?

- The advantages of SWOT include forcing managers to consider both internal and external factors simultaneously.

- Focusing on opportunities and threats make the firm proactive rather than reactive.

- It also creates a link between the internal and external environment.

- SWOT is simple as well.

What are the disadvantages of a SWOT analysis?

- The disadvantages to SWOT are that it cannot show a company how to achieve a competitive advantage. The strengths identified may not lead to an advantage. SWOT’s focus on external environment is too narrow.

- In addition, SWOT focuses on a single point in time, but competition among companies is constantly changing.

- SWOT is just a starting point.

- Lastly, SWOT places too much emphasis on one key feature, ignoring other factors. For example, Toyota focused on low cost and ignored quality, which led to losses for the company.

What is a resource?

What is a capability?

What is a core competency?

How do they differ?

- Resources are what the company has, like assets.

- Capability is what a company can do.

- A core competency is a particular strength of the company.

- Resources give companies capabilities, which capabilities lead to a core competency.

What is the difference between tangible and intangible resources?

- Tangible resources are easy to identify and they are the physical resources.

- Intangible resources are hard to identify are they are embedded in routines or practices, such as HR, brand image and reputation.

Briefly describe the four criteria used to determine sustainability of competitive advantages.

- Is the resource valuable?- Do they enable a firm to formulate and implement a strategy?

- Is the resource rare? If everyone has it, it’s not rare.

- Is the resource difficult to imitate? Physical uniqueness, path dependency, causal ambiguity, social complexity

- Is the resource difficult to substitute?

What is a business Model?

A design for the successful operations of a business, identifying revenue sources, customer base, products and details for financing. It’s how a company makes money.

What is the balanced scorecard? How can the development of a balanced scorecard help a company?

- It’s a method of evaluating a firm’s performance using performance measures from the customers’, internal, innovation and learning, and financial perspectives.

- A balanced scorecard provides a meaningful integration of the many issues that come into evaluating a firm’s performance.

- It helps a company with a fast but comprehensive view of the business.

- It enables a company to consider their company from 4 different perspectives.

How do financial ratios help understand the firm’s internal environment? Review the financial ratios and how they are used to understand the liquidity, financial leverage, and asset management of a firm.

- The financial ratios help a firm analyze its financial position. They have to be analyzed using reference points and see how they change over time. Compare ratios to historical comparisons, industry norms, and key competitors.

Briefly describe the primary activities in a firm’s value chain.

- The primary activities contribute to the physical creation of the product or service, its sale and transfer to the buyer, and its service after the sale.

- Inbound logistics-receiving, storing distributing inputs to the product

- Operations-activities associated with transforming inputs to final product, machining, packaging, assembly, testing, printing and facility operations.

- Outbound logistics-collecting, storing, and distributing the product or service to buyers

- Marketing and sales-

- Service-activities to provide service to enhance or maintain the value of the product, such as installation, repair and product adjustment

Briefly describe the support activities in a firm’s value chain.

- The secondary activities add value by themselves or add value through the relationship between primary activities and other support activities.

- Procurement-purchasing inputs used in the firms value chain, such as raw materials and supplies

- Technology development- activities associated with the development of new knowledge that is applied to the firms operations

- Human resource management-activities involved in recruiting, hiring, training, development and compensation.

- General administration- general mgmt, planning, finance, accounting, legal and gov affairs, quality mgmt, IS are examples. These activities support the entire value chain and not indiv activities.

Why do value chain analysis?

The value chain analysis identifies activities that create value to the company. A firm is profitable when the value exceeds the cost associated.