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An Introduction to Firm Specific Advantages

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An Introduction to Firm Specific Advantages
Introduction to IB Tutorial 1 exercise questions

Questions:
1. What is a firm specific advantage?
An unique strength a firm has that distinguishes him from his rivals, and creates a competitive advantage.
2. What is Honda’s FSA?
Honda has a very wide range of motorized machines, its assortment covers a large group of consumers.
3. What basic but important distinction does Verbeke make?
Non-location-bound FSAs versus Location bound FSAs.
4. Why are some FSAs location bound?
These FSAs are so unique and difficult to imitate that they cannot be transferred abroad.
5. What does that mean “location bound”?
That the FSAs can only be exploited in a specific location
6. Can you give an example?
The Phillips R&D (research & development) centre will never be transferred abroad to a because the researches who have the technical knowledge and creative skills are most of the time western people who don’t want to migrate to a low-income country.
7. What part of Honda’s FSAs are location bound?
The FSAs that are responsible for Honda’s technical superiority like the R&D centres that are located in Japan.
8. What is the broader question that the field of International Business
(IB) is concerned with?
How to develop FSAs that can be transferred across borders without stopping creating value.
9. What does Verbeke mean when he talks about unique resources?
Resources a firm has that are somehow special and can form a significant strategic advantage for the firm.

10. What unique resources does he list?
Physical resources, financial resources, human resources, upstream knowledge, downstream knowledge, administrative knowledge and reputational resources.
11. Can you think of an example yourself?
Localized resources (resources that are bound to specific locations like mining sites)
12. Verbeke describes the FSA as a unique resource which gives a firm an advantage, but an advantage compared to what or whom?
An advantage compared towards a

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