7. Far Reach recently entered the satellite telephone retail business. In response, two existing rivals, Smooth Waves and Clear Signal, improved the quality and lowered the cost of their satellite phones. By doing this, Smooth Waves and Clear Signal have ... A. decreased industry exit barriers. B. increased industry exit barriers. C. decreased industry profit potential. D. increased industry profit potential. 8. GNC and BNC are direct competitors. GNC's tangible assets are valued at $15 billion and its intangible assets are valued at \$35 billion. BNC's tangible assets are valued at \$5 billion and its intangible assets are valued at \$45 billion. From this we can conclude that ... A. It is easier to buy intangible assets with cash than tangible assets. B. BNC is more likely than GNC to gain and sustain a competitive advantage. C. It takes longer time to build tangible assets than intangible assets. D. There is resource homogeneity between BNC and GNC. 9. Home Value, Max Cart, and Nice Necessities are consumer-product retailers. Their products consist primarily of daily necessities that are easy to imitate and sell. All 3 rely on very similar resources and capabilities. It is most likely that ... A. Each firm will have strong bargaining power against suppliers. B. The industry structure will be far from perfect competition. C. Barriers to entry within the industry will be high. D. The competitive advantage that any one fim has will be short-lived. 10. A perfectly competitive industry differs from the resource-based model in that ... A. all firms have access to the same resources. B. accessibility to bundles of resources differ across firms. C. resources tend to be "sticky." D. competencies differ across firms within the same industry. 11. Mova Electronics is an electronics maker that recently declared itself bankrupt. While most of Mova's competitors shifted their research toward cell phones, Mova reinvested most of its earnings on improving its pagers. Once the pager market drastically declined, Mova was unable to capitalize on the new technology. This best illustrates A. causal ambiguity B. knowledge diffusion C. social complexity D. path dependence 12. A firm will fail to create a sustained competitive advantage when the ... A. fit between its internal strengths and the external environment is static. B. source of its competitive advantage is causally ambiguous. C. source of its competitive advantage is socially complex. D. source of its competitive advantage is path dependent