Question

31

Which of the following characteristics makes a core competency less likely to be a durable competitive advantage?

The core competency is most applicable in an emerging industry that appears to be very profitable.

The core competency has a very shallow learning curve (that is, it takes longer to improve at it).

None of these.

The core competency is one the firm has a lot of experience executing.

The core competency is based on a trade secret.

34

Which of the following increases the power of suppliers over an industry?

Suppliers are more numerous than firms in the industry.

None of these.

The industry has high rivalry.

Suppliers are much smaller firms than those in the industry.

The industry needs parts that are unique.

Answer 1

31. Option B

The core competency has a very shallow learning curve (that is, it takes longer to improve at it).

For any competency to give substantial competitive advantage it must follow a steep learning curve. If a company is not able to use its competency to improve operational efficiency, that competency cannot be termed as a competitive advantage.

34. Option C

The industry has high rivalry

Suppliers play a huge role in generating and managing demand and supply. Due to the fierce rivalry in the industry, each organization looks for the supplier partnerships that are best suited to their needs. Plus, it is not easy to change suppliers on a regular basis as it is a big operation hassle. Changing suppliers can often create a lean phase on which rivals can capitalize. Hence, rivalry in industry gives power to suppliers as in the end they are the ones who are closer to the point of sale.