:
Testbank For Strategic Management Concepts and Cases
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Competitiveness and Globalization 13th Edition
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Page 1
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Chapter 01: Strategic Management and Strategic Competitiveness
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True / False
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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 m z
2. Alligator Enterprises has earned above-average returns since its founding five years ago. No other firm has
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challenged Alligator in its particular market niche; therefore, the firm's owners can feel secure that Alligator has
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established a competitive advantage.
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a. True
b. False
ANSWER: False m z
3. The goal of strategy implementation is to develop a permanent competitive advantage.
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a. True
b. False
ANSWER: False m z
4. Risk in terms of financial returns reflects an investor's uncertainty about the economic gains or losses that will
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result from a particular investment.
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a. True
b. False
ANSWER: True m z
5. The difference between average and above-average returns is that average returns are returns that an investor
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expects to earn from an investment as compared to other investments with similar stock prices, while above-
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average returns are in excess of expectations for similarly priced stocks.
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a. True
b. False
ANSWER: False m z
6. Above-average returns are returns in excess of what an investor expects to earn from other investments with a
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similar amount of risk.
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a. True
b. False
ANSWER: True m z
7. Particularly when assessing investments in new venture firms, the most effective, and often the only, way to
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
measure the performance of the firms and determine their viability as an investment option is to examine financial
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metrics such as returns on assets, and sales.
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a. True
b. False
ANSWER: False m z
Page 2
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, :
8. To implement a firm’s strategies, the firm takes actions to enact each strategy with the intent of achieving
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strategic competitiveness and above-average returns.
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a. True
b. False
ANSWER: True m z
9. Economies of scale and huge advertising budgets are more effective in the new competitive landscape than they
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were in the past.
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a. True
b. False
ANSWER: False m z
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 m z
11. The rate of technology diffusion has increased significantly over the last two decades.
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a. True
b. False
ANSWER: True m z
12. RelTech is a firm in the electronics industry. It could protect its proprietary technology through patents.
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However, it likely will not apply for patents to keep competitors from gaining access to the technological
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knowledge included in the patent application.
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a. True
b. False
ANSWER: True m z
13. Examples of incremental innovations include iPads, Wi-Fi, and the web browser.
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a. True
b. False
ANSWER: False m z
14. The rapid rate of technological diffusion has increased the competitive benefits of patents.
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a. True
b. False
ANSWER: False m z
15. Companies searching for opportunities in the global economy would likely conclude that the three leading
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European economies of Germany, United Kingdom, and France would be good investments because they are
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predicted to continue increasing in size.
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a. True
b. False
ANSWER: False m z
16. Since the 1980s, the basis for competition has shifted from intangible resources to hard assets.
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Page 3
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, :
a. True
b. False
ANSWER: False m z
17. The new CEO of Opacity Enterprises is determined to make the long-established firm strategically flexible. The
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CEO 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 m z
18. The industrial organization (I/O) model suggests that above-average returns are determined primarily by the
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firm's unique internal resources rather than by external capabilities.
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a. True
b. False
ANSWER: False m z
19. The CEO of Twin Spires, Inc., is committed to using the expertise and resources currently in the firm to serve
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the needs of the natural gardening community by providing rare and native plants to individuals and nurseries
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around the United States. The perspective of the CEO of Twin Spires is consistent with the assumptions of the
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industrial organization (I/O) model.
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a. True
b. False
ANSWER: False m z
20. The five forces model suggests that firms should target the industry with the highest potential for above-
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average returns and then implement either a cost-leadership strategy or a differentiation strategy.
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a. True
b. False
ANSWER: True m z
21. The uniqueness of a firm's resources and capabilities is the basis for a firm's strategy and its ability to earn
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above- average returns under the industrial organization (I/O) model.
mz mz mz mz mz mz mz mz mz
a. True
b. False
ANSWER: False m z
22. Research shows that a greater percentage of a firm's profitability is explained by the I/O model rather
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than the resource-based model.
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a. True
b. False
ANSWER: False m z
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 m z
Page 4
mz
Testbank For Strategic Management Concepts and Cases
mz mz mz mz mz mz
Competitiveness and Globalization 13th Edition
mz mz mz mz mz
Page 1
mz
, :
Chapter 01: Strategic Management and Strategic Competitiveness
mz mz mz mz mz mz
True / False
mz mz
1. Strategic competitiveness is achieved when a firm successfully formulates and implements a value-creating strategy.
mz mz mz mz mz mz mz mz mz mz mz mz mz
a. True
b. False
ANSWER: True m z
2. Alligator Enterprises has earned above-average returns since its founding five years ago. No other firm has
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
challenged Alligator in its particular market niche; therefore, the firm's owners can feel secure that Alligator has
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
established a competitive advantage.
mz mz mz mz
a. True
b. False
ANSWER: False m z
3. The goal of strategy implementation is to develop a permanent competitive advantage.
mz mz mz mz mz mz mz mz mz mz mz
a. True
b. False
ANSWER: False m z
4. Risk in terms of financial returns reflects an investor's uncertainty about the economic gains or losses that will
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
result from a particular investment.
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a. True
b. False
ANSWER: True m z
5. The difference between average and above-average returns is that average returns are returns that an investor
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
expects to earn from an investment as compared to other investments with similar stock prices, while above-
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
average returns are in excess of expectations for similarly priced stocks.
mz mz mz mz mz mz mz mz mz mz
a. True
b. False
ANSWER: False m z
6. Above-average returns are returns in excess of what an investor expects to earn from other investments with a
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similar amount of risk.
mz mz mz mz
a. True
b. False
ANSWER: True m z
7. Particularly when assessing investments in new venture firms, the most effective, and often the only, way to
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
measure the performance of the firms and determine their viability as an investment option is to examine financial
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
metrics such as returns on assets, and sales.
mz mz mz mz mz mz mz mz
a. True
b. False
ANSWER: False m z
Page 2
mz
, :
8. To implement a firm’s strategies, the firm takes actions to enact each strategy with the intent of achieving
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
strategic competitiveness and above-average returns.
mz mz mz mz mz
a. True
b. False
ANSWER: True m z
9. Economies of scale and huge advertising budgets are more effective in the new competitive landscape than they
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
were in the past.
mz mz mz mz
a. True
b. False
ANSWER: False m z
10. The two primary drivers of hypercompetition are the emergence of the global economy and technology.
mz mz mz mz mz mz mz mz mz mz mz mz mz mz
a. True
b. False
ANSWER: True m z
11. The rate of technology diffusion has increased significantly over the last two decades.
mz mz mz mz mz mz mz mz mz mz mz mz
a. True
b. False
ANSWER: True m z
12. RelTech is a firm in the electronics industry. It could protect its proprietary technology through patents.
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
However, it likely will not apply for patents to keep competitors from gaining access to the technological
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
knowledge included in the patent application.
mz mz mz mz mz mz
a. True
b. False
ANSWER: True m z
13. Examples of incremental innovations include iPads, Wi-Fi, and the web browser.
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a. True
b. False
ANSWER: False m z
14. The rapid rate of technological diffusion has increased the competitive benefits of patents.
mz mz mz mz mz mz mz mz mz mz mz mz
a. True
b. False
ANSWER: False m z
15. Companies searching for opportunities in the global economy would likely conclude that the three leading
mz mz mz mz mz mz mz mz mz mz mz mz mz mz
European economies of Germany, United Kingdom, and France would be good investments because they are
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
predicted to continue increasing in size.
mz mz mz mz mz mz
a. True
b. False
ANSWER: False m z
16. Since the 1980s, the basis for competition has shifted from intangible resources to hard assets.
mz mz mz mz mz mz mz mz mz mz mz mz mz mz
Page 3
mz
, :
a. True
b. False
ANSWER: False m z
17. The new CEO of Opacity Enterprises is determined to make the long-established firm strategically flexible. The
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
CEO should understand that the task is not easy, largely because of inertia that can build up over time.
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
a. True
b. False
ANSWER: True m z
18. The industrial organization (I/O) model suggests that above-average returns are determined primarily by the
mz mz mz mz mz mz mz mz mz mz mz mz mz
firm's unique internal resources rather than by external capabilities.
mz mz mz mz mz mz mz mz mz
a. True
b. False
ANSWER: False m z
19. The CEO of Twin Spires, Inc., is committed to using the expertise and resources currently in the firm to serve
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
the needs of the natural gardening community by providing rare and native plants to individuals and nurseries
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
around the United States. The perspective of the CEO of Twin Spires is consistent with the assumptions of the
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
industrial organization (I/O) model.
mz mz mz mz
a. True
b. False
ANSWER: False m z
20. The five forces model suggests that firms should target the industry with the highest potential for above-
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
average returns and then implement either a cost-leadership strategy or a differentiation strategy.
mz mz mz mz mz mz mz mz mz mz mz mz
a. True
b. False
ANSWER: True m z
21. The uniqueness of a firm's resources and capabilities is the basis for a firm's strategy and its ability to earn
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
above- average returns under the industrial organization (I/O) model.
mz mz mz mz mz mz mz mz mz
a. True
b. False
ANSWER: False m z
22. Research shows that a greater percentage of a firm's profitability is explained by the I/O model rather
mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz mz
than the resource-based model.
mz mz mz mz
a. True
b. False
ANSWER: False m z
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 m z
Page 4
mz
