Chapter m1—Strategic mManagementmandmStrategic mCompetitiveness
TRUE/FALSE
1. ThemOpeningmCasemshowsmthatmMcDonald’smismonemofmthemfewmfirmsmablemtomachievemstrat
egicmcompetitivenessmfrommitsmfoundingmuntilmthempresentmtime.
ANS:m F PTS:mmm 1 DIF: Medium REF:m3
OBJ:m01-01 mTYPE:mapplication
NOT:mAACSB:mMulticulturalm&mDiversity m|mManagement:mEnvironmentalmInfluencem|mDierdorffm&mRubi
n:mManagingmstrategy mand minnovation
2. By mfocusingmonmproductminnovationsmand mupgradesmofmitsmproperties,mMcDonald’smwasmablemto machi
evemstrategicmcompetitivenessmand mabovemaverage mreturns.
ANS:m T PTS:mmm 1 DIF: Medium REF:m3-4
OBJ:m01-01 mTYPE:mapplication
NOT:mAACSB:mBusinessmKnowledgemand mAnalyticalmSkillsm|mManagement:mStrategy|mDierdorff m&mRu
bin:mManagingmstrategy mand minnovation
3. Strategicmcompetitivenessmismachieved mwhenmamfirmmsuccessfully mformulatesmand mimplementsmamval
ue-mcreatingmstrategy.
ANS:m T PTS:mmm 1 DIF: Easy REF:m4
OBJ:m01-01 mTYPE:mknowledge
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin
:mManagingmstrategy m&minnovation
4. Partmof mMcDonald’smstrategy mwasmthemchoicemthatmitmwould mremainminvolvedminmadditionalmfoodmconc
eptsmsuch masmBoston mMarketmand mChipotle.
ANS:m T PTS:mmm 1 DIF: Easy REF:m4
OBJ:m01-01 mTYPE:mapplication
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin
:mManagingmstrategy m&minnovation
5. AlligatormEnterprisesmhasmearnedmabove-
averagemreturnsmsincemitsmfoundingmfivemyearsmago.mSincemnomothermfirmmhasmchallenged mAlligatorm
in mitsmparticularmmarketmniche,mthemfirm’smownersmcanmfeelmsecuremthatmAlligatormhasmestablishedmam
competitive madvantage.
ANS:m F PTS:mmm 1 DIF: Hard REF:m5
OBJ:m01-01 mTYPE:mapplication
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin
:mManagingmthemtask menvironment
6. Themgoalmof mstrategicmmanagementmismto mdevelop mamcompetitive madvantage mthatmismpermanent.
ANS:m F PTS:mmm 1 DIF: Medium REF:m5
OBJ:m01-01 mTYPE:mcomprehension
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin
:mManagingmstrategy m&minnovation
1
All minformationmprovidedmformreference m
onlymaJoinmusmonmFacebook.com/theto
pgrades
, 7. Risk min mtermsmofmfinancialmreturnsmreflectsmanminvestor’smuncertaintymaboutmeconomicmgainsmormlossesm
thatmwillmresultmfrommamparticularminvestment.
ANS:m T PTS:mmm 1 DIF: Easy REF:m5
OBJ:m01-01 mTYPE:mknowledge
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin:mFounda
tionalmskills
8. Average mreturnsmaremreturnsminmexcessmofmwhatmanminvestormexpectsmto mearnmfrommotherminvestmentsm
with mamsimilarmamountmof mrisk.
ANS:m F PTS:mmm 1 DIF: Medium REF:m5
OBJ:m01-01 mTYPE:mknowledge
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin:mFounda
tionalmskills
9. Returnsmcanmonly mbemmeasuredminmaccountingmtermsmsuchmasmreturnmonmassets,mreturnmon mequity,mormr
eturn mon msales.
ANS:m F PTS:mmm 1 DIF: Easy REF:m5
OBJ:m01-01 mTYPE:mknowledge
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin:mFounda
tionalmskills
10. BestmBuy moutperformingmCircuitmCity,mandmBestmBuy’smcontinuingmgoodmperformancemillustratemt
hatmpermanentmsuccessmismpossible.
ANS:m F PTS:mmm 1 DIF: Medium REF:m6
OBJ:m01-01 mTYPE:mapplication
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin
:mManagingmstrategy m&minnovation
11. In mthemchaptermStrategicmFocusmcase,mCircuitmCity mdidmnotmachievemstrategicmcompetitivenessmand mab
ove-maverage mreturnsmbecause mitmfailed mto msuccessfully mimplementmitsmstrategy.
ANS:m T PTS:mmm 1 DIF: Easy REF:m8
OBJ:m01-01 mTYPE:mapplication
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin
:mManagingmstrategy m&minnovation
12. Economiesmofmscalemandmhugemadvertisingmbudgetsmaremjustmasmeffectiveminmthemnewmcompeti
tivemlandscape masmtheymwereminmthempast,mbutmthey mmustmbemreinforced mby mstrategicmflexibilit
y.
ANS:m F PTS:mmm 1 DIF: Hard REF:m9
OBJ:m01-02 mTYPE:mcomprehension
NOT:mAACSB:mBusinessmKnowledge m&mAnalyticalmSkillsm|mManagement:mStrategy m|mManageme
nt:mCreation mof mValue
13. Wal-
Martmismtryingmto machievemamboundarylessmretailingmempiremby mimplementingmglobalmpricing,ms
ourcing,mand mlogistics.
ANS:m T PTS:mmm 1 DIF: Easy REF:m10
OBJ:m01-02 mTYPE:mapplication
NOT:mAACSB:mBusinessmKnowledge m&mAnalyticalmSkillsm|mManagement:mCreation mof mValue m|
, Dierdorff m&mRubin:mManagingmlogisticsm&mtechnology
14. Themtwo mprimarymdriversmofmhypercompetition maremthememergencemofmthemglobalmeconomym
and mtechnology.
ANS:m T PTS:mmm 1 DIF: Easy REF:m9
OBJ:m01-02 mTYPE:mknowledge
NOT:mAACSB:mMulticulturalm&mDiversity m|mManagement:mEnvironmentalmInfluencem|mDierdorffm&mRubi
n:mManagingmstrategy m&minnovation
15. Themratemof mtechnology mdiffusion mhasmbeen msteadily mincreasingmovermthemlastmtwo mdecades.
ANS:m T PTS:mmm 1 DIF: Easy REF:m11
OBJ:m01-02 mTYPE:mknowledge
NOT:mAACSB:mInformationmTechnology m|mManagement:mInformationmTechnologym|mDierdorffm&mRubin:m
Knowledge mof mtechnology, mdesign,m&mproduction
16. Whilempatentsmmay mbemanmeffectivemwaymofmprotectingmproprietarymtechnologymin msomemindustriesmsuc
h masmpharmaceuticals,mmany mfirmsmcompetingmin mthemelectronicsmindustry mdo mnotmapply mformpatents.
ANS:m T PTS:mmm 1 DIF: Medium REF:m12
OBJ:m01-02 mTYPE:mapplication
NOT:mAACSB:mInformationmTechnology m|mManagement:mInformationmTechnologym|mDierdorffm&mRubin:m
Knowledge mof mtechnology, mdesign,m&mproduction
17. Examplesmof mincrementalminnovationsmincludemiPods,mPDAs,mWiFi,mand mweb mbrowsermsoftware.
ANS:m F PTS:mmm 1 DIF: Medium REF:m12
OBJ:m01-02 mTYPE:mapplication
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mCreationmofmValuem|mDierdorff
m& mRubin:mManagingmstrategy m& minnovation
18. Themrapid mratemof mtechnologicalmdiffusion mhasmincreased mthemcompetitive mbenefitsmof mpatents.
ANS:m F PTS:mmm 1 DIF: Medium REF:m12
OBJ:m01-02 mTYPE:mcomprehension
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mCreationmofmValuem|mDierdorff
m& mRubin:mKnowledge mof mtechnology, mdesign, m& mproduction
19. Developed mcountriesmstillmhavemmajormadvantagesmin maccessmtominformation mtechnology moverm
emergingmeconomiesmbecausemofmthemsignificantmcostmofmtheminfrastructure mneededmformcomput
ingmpower.
ANS:m F PTS:mmm 1 DIF: Hard REF:m12
OBJ:m01-02 mTYPE:mknowledge
NOT:mAACSB:mMulticulturalm&mDiversitym|mManagement:mInformationmTechnology m|mDierdorff m&mRu
bin:mKnowledge mof mtechnology, mdesign,m&mproduction
20. Themratemof mgrowth mof mInternet-
based mapplicationsmcouldmbemaffectedmbymthempossibility mofmInternetmservicemprovidersmchargingm
usersmformdownloadingmthosemapplications.
ANS:m T PTS:mmm 1 DIF: Medium REF:m12
OBJ:m01-02 mTYPE:mcomprehension
, NOT:mAACSB:mInformationmTechnology m|mManagement:mCreation mofmValuem|mDierdorffm&mRubi
n:mManagingmlogisticsmand mtechnology
TRUE/FALSE
1. ThemOpeningmCasemshowsmthatmMcDonald’smismonemofmthemfewmfirmsmablemtomachievemstrat
egicmcompetitivenessmfrommitsmfoundingmuntilmthempresentmtime.
ANS:m F PTS:mmm 1 DIF: Medium REF:m3
OBJ:m01-01 mTYPE:mapplication
NOT:mAACSB:mMulticulturalm&mDiversity m|mManagement:mEnvironmentalmInfluencem|mDierdorffm&mRubi
n:mManagingmstrategy mand minnovation
2. By mfocusingmonmproductminnovationsmand mupgradesmofmitsmproperties,mMcDonald’smwasmablemto machi
evemstrategicmcompetitivenessmand mabovemaverage mreturns.
ANS:m T PTS:mmm 1 DIF: Medium REF:m3-4
OBJ:m01-01 mTYPE:mapplication
NOT:mAACSB:mBusinessmKnowledgemand mAnalyticalmSkillsm|mManagement:mStrategy|mDierdorff m&mRu
bin:mManagingmstrategy mand minnovation
3. Strategicmcompetitivenessmismachieved mwhenmamfirmmsuccessfully mformulatesmand mimplementsmamval
ue-mcreatingmstrategy.
ANS:m T PTS:mmm 1 DIF: Easy REF:m4
OBJ:m01-01 mTYPE:mknowledge
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin
:mManagingmstrategy m&minnovation
4. Partmof mMcDonald’smstrategy mwasmthemchoicemthatmitmwould mremainminvolvedminmadditionalmfoodmconc
eptsmsuch masmBoston mMarketmand mChipotle.
ANS:m T PTS:mmm 1 DIF: Easy REF:m4
OBJ:m01-01 mTYPE:mapplication
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin
:mManagingmstrategy m&minnovation
5. AlligatormEnterprisesmhasmearnedmabove-
averagemreturnsmsincemitsmfoundingmfivemyearsmago.mSincemnomothermfirmmhasmchallenged mAlligatorm
in mitsmparticularmmarketmniche,mthemfirm’smownersmcanmfeelmsecuremthatmAlligatormhasmestablishedmam
competitive madvantage.
ANS:m F PTS:mmm 1 DIF: Hard REF:m5
OBJ:m01-01 mTYPE:mapplication
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin
:mManagingmthemtask menvironment
6. Themgoalmof mstrategicmmanagementmismto mdevelop mamcompetitive madvantage mthatmismpermanent.
ANS:m F PTS:mmm 1 DIF: Medium REF:m5
OBJ:m01-01 mTYPE:mcomprehension
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin
:mManagingmstrategy m&minnovation
1
All minformationmprovidedmformreference m
onlymaJoinmusmonmFacebook.com/theto
pgrades
, 7. Risk min mtermsmofmfinancialmreturnsmreflectsmanminvestor’smuncertaintymaboutmeconomicmgainsmormlossesm
thatmwillmresultmfrommamparticularminvestment.
ANS:m T PTS:mmm 1 DIF: Easy REF:m5
OBJ:m01-01 mTYPE:mknowledge
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin:mFounda
tionalmskills
8. Average mreturnsmaremreturnsminmexcessmofmwhatmanminvestormexpectsmto mearnmfrommotherminvestmentsm
with mamsimilarmamountmof mrisk.
ANS:m F PTS:mmm 1 DIF: Medium REF:m5
OBJ:m01-01 mTYPE:mknowledge
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin:mFounda
tionalmskills
9. Returnsmcanmonly mbemmeasuredminmaccountingmtermsmsuchmasmreturnmonmassets,mreturnmon mequity,mormr
eturn mon msales.
ANS:m F PTS:mmm 1 DIF: Easy REF:m5
OBJ:m01-01 mTYPE:mknowledge
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin:mFounda
tionalmskills
10. BestmBuy moutperformingmCircuitmCity,mandmBestmBuy’smcontinuingmgoodmperformancemillustratemt
hatmpermanentmsuccessmismpossible.
ANS:m F PTS:mmm 1 DIF: Medium REF:m6
OBJ:m01-01 mTYPE:mapplication
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin
:mManagingmstrategy m&minnovation
11. In mthemchaptermStrategicmFocusmcase,mCircuitmCity mdidmnotmachievemstrategicmcompetitivenessmand mab
ove-maverage mreturnsmbecause mitmfailed mto msuccessfully mimplementmitsmstrategy.
ANS:m T PTS:mmm 1 DIF: Easy REF:m8
OBJ:m01-01 mTYPE:mapplication
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mStrategy m|mDierdorffm&mRubin
:mManagingmstrategy m&minnovation
12. Economiesmofmscalemandmhugemadvertisingmbudgetsmaremjustmasmeffectiveminmthemnewmcompeti
tivemlandscape masmtheymwereminmthempast,mbutmthey mmustmbemreinforced mby mstrategicmflexibilit
y.
ANS:m F PTS:mmm 1 DIF: Hard REF:m9
OBJ:m01-02 mTYPE:mcomprehension
NOT:mAACSB:mBusinessmKnowledge m&mAnalyticalmSkillsm|mManagement:mStrategy m|mManageme
nt:mCreation mof mValue
13. Wal-
Martmismtryingmto machievemamboundarylessmretailingmempiremby mimplementingmglobalmpricing,ms
ourcing,mand mlogistics.
ANS:m T PTS:mmm 1 DIF: Easy REF:m10
OBJ:m01-02 mTYPE:mapplication
NOT:mAACSB:mBusinessmKnowledge m&mAnalyticalmSkillsm|mManagement:mCreation mof mValue m|
, Dierdorff m&mRubin:mManagingmlogisticsm&mtechnology
14. Themtwo mprimarymdriversmofmhypercompetition maremthememergencemofmthemglobalmeconomym
and mtechnology.
ANS:m T PTS:mmm 1 DIF: Easy REF:m9
OBJ:m01-02 mTYPE:mknowledge
NOT:mAACSB:mMulticulturalm&mDiversity m|mManagement:mEnvironmentalmInfluencem|mDierdorffm&mRubi
n:mManagingmstrategy m&minnovation
15. Themratemof mtechnology mdiffusion mhasmbeen msteadily mincreasingmovermthemlastmtwo mdecades.
ANS:m T PTS:mmm 1 DIF: Easy REF:m11
OBJ:m01-02 mTYPE:mknowledge
NOT:mAACSB:mInformationmTechnology m|mManagement:mInformationmTechnologym|mDierdorffm&mRubin:m
Knowledge mof mtechnology, mdesign,m&mproduction
16. Whilempatentsmmay mbemanmeffectivemwaymofmprotectingmproprietarymtechnologymin msomemindustriesmsuc
h masmpharmaceuticals,mmany mfirmsmcompetingmin mthemelectronicsmindustry mdo mnotmapply mformpatents.
ANS:m T PTS:mmm 1 DIF: Medium REF:m12
OBJ:m01-02 mTYPE:mapplication
NOT:mAACSB:mInformationmTechnology m|mManagement:mInformationmTechnologym|mDierdorffm&mRubin:m
Knowledge mof mtechnology, mdesign,m&mproduction
17. Examplesmof mincrementalminnovationsmincludemiPods,mPDAs,mWiFi,mand mweb mbrowsermsoftware.
ANS:m F PTS:mmm 1 DIF: Medium REF:m12
OBJ:m01-02 mTYPE:mapplication
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mCreationmofmValuem|mDierdorff
m& mRubin:mManagingmstrategy m& minnovation
18. Themrapid mratemof mtechnologicalmdiffusion mhasmincreased mthemcompetitive mbenefitsmof mpatents.
ANS:m F PTS:mmm 1 DIF: Medium REF:m12
OBJ:m01-02 mTYPE:mcomprehension
NOT:mAACSB:mBusinessmKnowledgem&mAnalyticalmSkillsm|mManagement:mCreationmofmValuem|mDierdorff
m& mRubin:mKnowledge mof mtechnology, mdesign, m& mproduction
19. Developed mcountriesmstillmhavemmajormadvantagesmin maccessmtominformation mtechnology moverm
emergingmeconomiesmbecausemofmthemsignificantmcostmofmtheminfrastructure mneededmformcomput
ingmpower.
ANS:m F PTS:mmm 1 DIF: Hard REF:m12
OBJ:m01-02 mTYPE:mknowledge
NOT:mAACSB:mMulticulturalm&mDiversitym|mManagement:mInformationmTechnology m|mDierdorff m&mRu
bin:mKnowledge mof mtechnology, mdesign,m&mproduction
20. Themratemof mgrowth mof mInternet-
based mapplicationsmcouldmbemaffectedmbymthempossibility mofmInternetmservicemprovidersmchargingm
usersmformdownloadingmthosemapplications.
ANS:m T PTS:mmm 1 DIF: Medium REF:m12
OBJ:m01-02 mTYPE:mcomprehension
, NOT:mAACSB:mInformationmTechnology m|mManagement:mCreation mofmValuem|mDierdorffm&mRubi
n:mManagingmlogisticsmand mtechnology
