Test Bank - Strategic Management, Concepts and Cases-Competitiveness and Globalization 13th Edition by Michael A. Hitt, R. Duane Ireland & Robert E. Hoskisson- Complete

Test bank For Strategic Management Concepts and Cases
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Competitiveness and Globalization 13th Edition
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,Chapter r01: rStrategic rManagement rand rStrategic rCompetitiveness

True / Falser r




1. Strategic competitiveness is achieved when a firm successfully formulates and implements a value-creating strategy.
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a. True
b. False
ANSWER: True r




2. Alligator Enterprises has earned above-average returns since its founding five years ago. No other firm has challenged
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Alligator in its particular market niche; therefore, the firm's owners can feel secure that Alligator has established a
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competitive advantage.
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a. True
b. False
ANSWER: False r




3. The goal of strategy implementation is to develop a permanent competitive advantage.
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a. True
b. False
ANSWER: False r




4. Risk in terms of financial returns reflects an investor's uncertainty about the economic gains or losses that will result
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from a particular investment.
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a. True
b. False
ANSWER: True r




5. The difference between average and above-average returns is that average returns are returns that an investor expects to
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earn from an investment as compared to other investments with similar stock prices, while above-average returns are in
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excess of expectations for similarly priced stocks.
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a. True
b. False
ANSWER: False r




6. Above-average returns are returns in excess of what an investor expects to earn from other investments with a similar
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amount of risk.
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a. True
b. False
ANSWER: True r




7. Particularly when assessing investments in new venture firms, the most effective, and often the only, way to measure
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the performance of the firms and determine their viability as an investment option is to examine financial metrics such as
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returns on assets, and sales.
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a. True
b. False
ANSWER: False r




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,8. To implement a firm’s strategies, the firm takes actions to enact each strategy with the intent of achieving strategic
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competitiveness and above-average returns.
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a. True
b. False
ANSWER: True r




9. Economies of scale and huge advertising budgets are more effective in the new competitive landscape than they were in
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the past.
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a. True
b. False
ANSWER: False r




10. The two primary drivers of hypercompetition are the emergence of the global economy and technology.
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a. True
b. False
ANSWER: True r




11. The rate of technology diffusion has increased significantly over the last two decades.
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a. True
b. False
ANSWER: True r




12. RelTech is a firm in the electronics industry. It could protect its proprietary technology through patents. However, it
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likely will not apply for patents to keep competitors from gaining access to the technological knowledge included in the
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patent application.
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a. True
b. False
ANSWER: True r




13. Examples of incremental innovations include iPads, Wi-Fi, and the web browser.
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a. True
b. False
ANSWER: False r




14. The rapid rate of technological diffusion has increased the competitive benefits of patents.
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a. True
b. False
ANSWER: False r




15. Companies searching for opportunities in the global economy would likely conclude that the three leading European
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economies of Germany, United Kingdom, and France would be good investments because they are predicted to continue
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increasing in size.
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a. True
b. False
ANSWER: False r




16. Since the 1980s, the basis for competition has shifted from intangible resources to hard assets.
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, a. True
b. False
ANSWER: False r




17. The new CEO of Opacity Enterprises is determined to make the long-established firm strategically flexible. The CEO
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should understand that the task is not easy, largely because of inertia that can build up over time.
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a. True
b. False
ANSWER: True r




18. The industrial organization (I/O) model suggests that above-average returns are determined primarily by the firm's
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unique internal resources rather than by external capabilities.
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a. True
b. False
ANSWER: False r




19. The CEO of Twin Spires, Inc., is committed to using the expertise and resources currently in the firm to serve the needs
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of the natural gardening community by providing rare and native plants to individuals and nurseries around the United
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States. The perspective of the CEO of Twin Spires is consistent with the assumptions of the industrial organization(I/O)
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model.
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a. True
b. False
ANSWER: False r




20. The five forces model suggests that firms should target the industry with the highest potential for above-average
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returns and then implement either a cost-leadership strategy or a differentiation strategy.
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a. True
b. False
ANSWER: True r




21. The uniqueness of a firm's resources and capabilities is the basis for a firm's strategy and its ability to earn above-
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average returns under the industrial organization (I/O) model.
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a. True
b. False
ANSWER: False r




22. Research shows that a greater percentage of a firm's profitability is explained by the I/O model rather than the
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resource-based model.
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a. True
b. False
ANSWER: False r




23. All of a firm's resources and capabilities have the potential to be the foundation for a competitive advantage.
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a. True
b. False
ANSWER: False r




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