Test Bank for Strategic Management,Concepts and Cases-Competitiveness and Globalization 13th Edition by Michael A. Hitt, R. Duane Ireland & Robert E. Hoskisson- Complete, Elaborated and Latest Test Bank. ALL Chapters (1-13) Included and Updated-Expanded

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Testbank For Strategic Management Concepts and Cases
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Competitiveness and Globalization 13th Edition
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Chapter 01: Strategic Management and Strategic Competitiveness
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True / False ga ga




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 g a




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 g a




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




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 g a




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




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 g a




7. Particularly when assessing investments in new venture firms, the most effective, and often the only, way to
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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 g a




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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 g a




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




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 g a




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




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




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




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




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 g a




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 g a




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 g a




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 g a




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




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 g a




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.
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a. True
b. False
ANSWER: False g a




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




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 g a




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