The Difference Between a Distinctive Competence and a Core Competence

question 76

Multiple Choice

The difference between a distinctive competence and a core competence is that

• A) a distinctive competence refers to a company's best-executed functional strategy and a core competence refers to a company's best-executed business strategy.
• B) a distinctive competence refers to a company's most strategically important resource whereas a core competence refers to the basis of a company's competitive advantage over rivals.
• C) a distinctive competence is a competitively relevant internal activity that a firm performs especially well relative to other internal activities,whereas a core competence is a competitively important activity performed by key strategic allies.
• D) a distinctive competence represents internal activity that is performed with a very high level of proficiency whereas a core competence is a proficiently performed internal activity that is central to a company's strategy and competitiveness.
• E) a core competence usually resides in a company's technology and physical assets (state-of-the-art plants and equipment,attractive real estate locations,and so on)whereas a distinctive competence usually resides in a company's human capital,information capital,or organizational capital.

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Definitions:

Market Value

Market value refers to the current price at which an asset or a company can be bought or sold on the open market.

November 45 Put

A put option contract with a strike price of 45 that expires in November, giving the holder the right to sell the underlying asset at the strike price.

Risk-Free Asset

A theoretical financial instrument that offers guaranteed returns with no risk of financial loss, often represented by government bonds.

Strike Price

The price at which the holder of an option can buy (in a call option) or sell (in a put option) the underlying security.