Strategic Management: Chapter 1 Exam
Prep | Comprehensive Study Guide |
2026/2027
A firm has achieved ____ when it successfully formulates and implements a
valuecreating strategy.
a. strategic competitiveness
b. a permanently sustainable competitive advantage
c. substantial returns
d. legal and ethical core values - correct answer-A
A competitive advantage
a. can be permanent if the firm has successfully implemented the strategic
management process.
b. entails reducing investors' risk to near zero.
c. can be identified only if it has been unsuccessfully challenged by competitors.
d. exists when competing firms are unable to find investors. - correct answer-C
Above-average returns are
a. higher profits than the firm earned last year.
b. higher profits than the industry averaged over the last 10 years.
c. profits in excess of what an investor expects to earn from a historical pattern of
performance of the firm.
,d. returns in excess of what an investor expects to earn from other investments
with a similar level of risk. - correct answer-D
The strategic management process is
a. a set of activities that will assure a sustainable competitive advantage and
above-average returns for the firm.
b. a decision-making activity concerned with a firm's internal resources,
capabilities, and competencies, independent of the conditions in its external
environment.
c. a process directed by top-management with input from other stakeholders
that seeks to achieve above-average returns for investors through effective use of
the organization's resources.
d. the full set of commitments, decisions, and actions required for the firm to
achieve above-average returns and strategic competitiveness. - correct answer-D
The primary drivers of hypercompetition are
a. rising global socio-economic instability and increased inflation.
b. the emergence of a global economy and rapid technological change.
c. increased global competition and decreasing tariffs.
d. increased availability of capital and increased competition. - correct answer-B
All of the following are characteristic of the global economy EXCEPT
a. the increasing importance of developing countries as sources of revenue
growth.
b. the free movement of goods, services, people, skills, and ideas across
geographic borders.
c. the increased use of tariffs to protect industries.
, d. higher levels of opportunities and challenges. - correct answer-C
Essentially, the _________ has become one of the world's largest markets with
700 million potential consumers.
a. European Union
b. The United States
c. China
d. Japan - correct answer-A
The economic interdependence among countries as reflected in the flow of
goods, services, financial capital and knowledge across country borders is defined
as
a. hypercompetition.
b. boundaryless retailing.
c. strategic intensity.
d. globalization. - correct answer-D
Globalization has led to
a. lower operational efficiency as firms must transport raw materials and finished
goods farther.
b. increasing loyalty of customers for products made domestically.
c. declining returns from investment in research and development.
d. higher product quality. - correct answer-D
The "liability of foreignness" is the
Prep | Comprehensive Study Guide |
2026/2027
A firm has achieved ____ when it successfully formulates and implements a
valuecreating strategy.
a. strategic competitiveness
b. a permanently sustainable competitive advantage
c. substantial returns
d. legal and ethical core values - correct answer-A
A competitive advantage
a. can be permanent if the firm has successfully implemented the strategic
management process.
b. entails reducing investors' risk to near zero.
c. can be identified only if it has been unsuccessfully challenged by competitors.
d. exists when competing firms are unable to find investors. - correct answer-C
Above-average returns are
a. higher profits than the firm earned last year.
b. higher profits than the industry averaged over the last 10 years.
c. profits in excess of what an investor expects to earn from a historical pattern of
performance of the firm.
,d. returns in excess of what an investor expects to earn from other investments
with a similar level of risk. - correct answer-D
The strategic management process is
a. a set of activities that will assure a sustainable competitive advantage and
above-average returns for the firm.
b. a decision-making activity concerned with a firm's internal resources,
capabilities, and competencies, independent of the conditions in its external
environment.
c. a process directed by top-management with input from other stakeholders
that seeks to achieve above-average returns for investors through effective use of
the organization's resources.
d. the full set of commitments, decisions, and actions required for the firm to
achieve above-average returns and strategic competitiveness. - correct answer-D
The primary drivers of hypercompetition are
a. rising global socio-economic instability and increased inflation.
b. the emergence of a global economy and rapid technological change.
c. increased global competition and decreasing tariffs.
d. increased availability of capital and increased competition. - correct answer-B
All of the following are characteristic of the global economy EXCEPT
a. the increasing importance of developing countries as sources of revenue
growth.
b. the free movement of goods, services, people, skills, and ideas across
geographic borders.
c. the increased use of tariffs to protect industries.
, d. higher levels of opportunities and challenges. - correct answer-C
Essentially, the _________ has become one of the world's largest markets with
700 million potential consumers.
a. European Union
b. The United States
c. China
d. Japan - correct answer-A
The economic interdependence among countries as reflected in the flow of
goods, services, financial capital and knowledge across country borders is defined
as
a. hypercompetition.
b. boundaryless retailing.
c. strategic intensity.
d. globalization. - correct answer-D
Globalization has led to
a. lower operational efficiency as firms must transport raw materials and finished
goods farther.
b. increasing loyalty of customers for products made domestically.
c. declining returns from investment in research and development.
d. higher product quality. - correct answer-D
The "liability of foreignness" is the
