In the Context of the Resource-Based Model of Competitive Advantage

question 93

Multiple Choice

In the context of the resource-based model of competitive advantage, which of the following scenarios best exemplifies resource immobility?

• A) AP Corp. has earned a good reputation among its shareholders by investing more heavily in equipment than in building up brand equity.
• B) Two Triangle Inc. has lost its market share because its resources are rigid, inflexible, and static.
• C) Blue Elixir Corp. has been able to gain a competitive advantage because of its ability to efficiently move its resources from one manufacturing unit to another.
• D) True 3 Inc. has been able to outperform its competitors because the uniqueness of its employee experience is difficult for competitors to replicate.

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Definitions:

Fixed Costs

These are business expenses that remain the same regardless of the level of production or sales, such as rent or salaries.

Break-Even Point

The level of sales at which total revenues equal total expenses, resulting in neither profit nor loss.

Variable Costs

Expenses that fluctuate in direct proportion to changes in levels of production or sales, such as materials and labor.

Fixed Costs

Expenses that do not change with the level of production or sales volumes, remaining constant regardless of the company's activity levels.