L6M9 practice question 13 of 15

Which of the following statements about Dynamic Capability Theory are TRUE? Select ALL that apply.

Answer options

A: It can be utilised to understand how the operations function reconfigures its competencies in response to changes in the marketplace Correct answer

B: It can contribute to the competitive advantage of the organisation Correct answer

C: The focus is on reducing costs to ensure the organisation remains profitable

D: Information sharing throughout the supply network is important to creating dynamic capability Correct answer

Correct Answer:

A. It can be utilised to understand how the operations function reconfigures its competencies in response to changes in the marketplace; B. It can contribute to the competitive advantage of the organisation; D. Information sharing throughout the supply network is important to creating dynamic capability

Explanation

✅ Option A is correct—Dynamic Capability Theory helps companies adjust their competencies to market changes. ✅ Option B is correct—Dynamic capabilities contribute to competitive advantage. ✅ Option D is correct—Information sharing within the supply chain is key to building dynamic capabilities. 🔗Option C is incorrect—Dynamic Capability Theory does not focus on cost reduction, but rather on agility and responsiveness to market changes.
Note: This section also covers Porter’s 5 Forces, STEEPLE, and the Product Life Cycle, which are important topics for revision! (See LO 2.1, p.88)

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