Chapter 1—Strategic Management and Strategic Competitiveness
h h h h h
TRUE/FALSE
1. ThehOpeninghCasehshowshthathMcDonald’shishonehofhthehfewhfirmshablehtohachievehstrategichc
ompetitivenesshfromhitshfoundinghuntilhthehpresenthtime.
ANS:h F PTS:hhh 1 DIF: Medium REF:h 3
OBJ:h01-01hTYPE:happlication
NOT:hAACSB:hMulticulturalh&hDiversityh|hManagement:hEnvironmentalhInfluenceh|hDierdorffh&hRubin:hM
anaginghstrategyhandhinnovation
2. Byhfocusinghonhproducthinnovationshandhupgradeshofhitshproperties,hMcDonald’shwashablehtohachievehs
trategichcompetitivenesshandhabovehaverageh returns.
ANS:h T PTS:hhh 1 DIF: Medium REF:h 3-4
OBJ:h01-01hTYPE:happlication
NOT:hAACSB:hBusinesshKnowledgehandhAnalyticalhSkillsh|hManagement:hStrategy|hDierdorffh&hRubin:h
Managinghstrategyhandhinnovation
3. Strategichcompetitivenesshishachievedhwhenhahfirmhsuccessfullyhformulateshandhimplementshahvalue-
hcreatinghstrategy.
ANS:h T PTS:hhh 1 DIF: Easy REF:h4
OBJ:h01-01hTYPE:hknowledge
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hMa
naginghstrategyh&hinnovation
4. ParthofhMcDonald’shstrategyhwashthehchoicehthathithwouldhremainhinvolvedhinhadditionalhfoodhconceptshs
uchhashBostonhMarkethandhChipotle.
ANS:h T PTS:hhh 1 DIF: Easy REF:h4
OBJ:h01-01hTYPE:happlication
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hMa
naginghstrategyh&hinnovation
5. AlligatorhEnterpriseshhashearnedhabove-
averagehreturnshsincehitshfoundinghfivehyearshago.hSincehnohotherhfirmhhashchallengedhAlligatorhinhits
hparticularhmarkethniche,hthehfirm’shownershcanhfeelhsecurehthathAlligatorhhashestablishedhahcompetiti
vehadvantage.
ANS:h F PTS:hhh 1 DIF: Hard REF:h5
OBJ:h01-01hTYPE:happlication
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hMa
naginghthehtaskhenvironment
6. Thehgoalhofhstrategichmanagementhishtohdevelophahcompetitivehadvantagehthathish permanent.
ANS:h F PTS:hhh 1 DIF: Medium REF:h5
OBJ:h01-01hTYPE:hcomprehension
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hMa
naginghstrategyh&hinnovation
1
Allhinformationhprovidedhforhreferencehonl
yhaJoinhushonhFacebook.com/thetopgrad
es
, 7. Riskhinhtermshofhfinancialhreturnshreflectshanhinvestor’shuncertaintyhaboutheconomichgainshorhlosseshthath
willhresulthfromhahparticularhinvestment.
ANS:h T PTS:hhh 1 DIF: Easy REF:h5
OBJ:h01-01hTYPE:hknowledge
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hFoundation
alhskills
8. Averagehreturnsharehreturnshinhexcesshofhwhathanhinvestorhexpectshtohearnhfromhotherhinvestmentshwithha
hsimilarhamounthofhrisk.
ANS:h F PTS:hhh 1 DIF: Medium REF:h5
OBJ:h01-01hTYPE:hknowledge
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hFoundation
alhskills
9. Returnshcanhonlyhbehmeasuredhinhaccountinghtermshsuchhashreturnhonhassets,hreturnhonhequity,horhreturnho
nhsales.
ANS:h F PTS:hhh 1 DIF: Easy REF:h5
OBJ:h01-01hTYPE:hknowledge
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hFoundation
alhskills
10. BesthBuyhoutperforminghCircuithCity,handhBesthBuy’shcontinuinghgoodhperformancehillustratehthath
permanenthsuccesshishpossible.
ANS:h F PTS:hhh 1 DIF: Medium REF:h6
OBJ:h01-01hTYPE:happlication
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hMa
naginghstrategyh&hinnovation
11. InhthehchapterhStrategichFocushcase,hCircuithCityhdidhnothachievehstrategichcompetitivenesshandhabove-
haveragehreturnshbecausehithfailedhtohsuccessfullyhimplementhitsh strategy.
ANS:h T PTS:hhh 1 DIF: Easy REF:h8
OBJ:h01-01hTYPE:happlication
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hMa
naginghstrategyh&hinnovation
12. Economieshofhscalehandhhugehadvertisinghbudgetsharehjusthasheffectivehinhthehnewhcompetitivehl
andscapehashtheyhwerehinhthehpast,hbuththeyhmusthbehreinforcedhbyhstrategichflexibility.
ANS:h F PTS:hhh 1 DIF: Hard REF:h9
OBJ:h01-02hTYPE:hcomprehension
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hManagement:h
CreationhofhValue
13. Wal-
Marthishtryinghtohachievehahboundarylesshretailinghempirehbyhimplementinghglobalhpricing,hsourc
ing,handhlogistics.
ANS:h T PTS:hhh 1 DIF: Easy REF:h10
OBJ:h01-02hTYPE:happlication
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hCreationhofhValueh|
, Dierdorffh&hRubin:hManaginghlogisticsh&htechnology
14. Thehtwohprimaryhdrivershofhhypercompetitionharehthehemergencehofhthehglobalheconomyhandht
echnology.
ANS:h T PTS:hhh 1 DIF: Easy REF:h9
OBJ:h01-02hTYPE:hknowledge
NOT:hAACSB:hMulticulturalh&hDiversityh|hManagement:hEnvironmentalhInfluenceh|hDierdorffh&hRubin:hM
anaginghstrategyh&hinnovation
15. Thehratehofhtechnologyhdiffusionhhashbeenhsteadilyhincreasinghoverhthehlasthtwoh decades.
ANS:h T PTS:hhh 1 DIF: Easy REF:h11
OBJ:h01-02hTYPE:hknowledge
NOT:hAACSB:hInformationhTechnologyh|hManagement:hInformationhTechnologyh|hDierdorffh&hRubin:hKno
wledgehofhtechnology,hdesign,h&hproduction
16. Whilehpatentshmayhbehanheffectivehwayhofhprotectinghproprietaryhtechnologyhinhsomehindustrieshsuchhash
pharmaceuticals,hmanyhfirmshcompetinghinhthehelectronicshindustryhdohnothapplyhforhpatents.
ANS:h T PTS:hhh 1 DIF: Medium REF:h12
OBJ:h01-02hTYPE:happlication
NOT:hAACSB:hInformationhTechnologyh|hManagement:hInformationhTechnologyh|hDierdorffh&hRubin:hKno
wledgehofhtechnology,hdesign,h&hproduction
17. ExampleshofhincrementalhinnovationshincludehiPods,hPDAs,hWiFi,handhwebhbrowserhsoftware.
ANS:h F PTS:hhh 1 DIF: Medium REF:h12
OBJ:h01-02hTYPE:happlication
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hCreationhofhValueh|hDierdorffh&hR
ubin:hManaginghstrategyh&hinnovation
18. Thehrapidhratehofhtechnologicalhdiffusionhhashincreasedhthehcompetitivehbenefitshofh patents.
ANS:h F PTS:hhh 1 DIF: Medium REF:h12
OBJ:h01-02hTYPE:hcomprehension
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hCreationhofhValueh|hDierdorffh&hR
ubin:hKnowledgehofhtechnology,hdesign,h&hproduction
19. Developedhcountrieshstillhhavehmajorhadvantageshinhaccesshtohinformationhtechnologyhoverheme
rgingheconomieshbecausehofhthehsignificanthcosthofhthehinfrastructurehneededhforhcomputinghpow
er.
ANS:h F PTS:hhh 1 DIF: Hard REF:h12
OBJ:h01-02hTYPE:hknowledge
NOT:hAACSB:hMulticulturalh&hDiversityh|hManagement:hInformationhTechnologyh|hDierdorffh&hRubin:h
Knowledgehofhtechnology,hdesign,h&hproduction
20. ThehratehofhgrowthhofhInternet-
basedhapplicationshcouldhbehaffectedhbyhthehpossibilityhofhInternethservicehprovidershcharginghuser
shforhdownloadinghthosehapplications.
ANS:h T PTS:hhh 1 DIF: Medium REF:h12
OBJ:h01-02hTYPE:hcomprehension
, NOT:hAACSB:hInformationhTechnologyh|hManagement:hCreationhofhValueh|hDierdorffh&hRubin:hM
anaginghlogisticshandhtechnology
h h h h h
TRUE/FALSE
1. ThehOpeninghCasehshowshthathMcDonald’shishonehofhthehfewhfirmshablehtohachievehstrategichc
ompetitivenesshfromhitshfoundinghuntilhthehpresenthtime.
ANS:h F PTS:hhh 1 DIF: Medium REF:h 3
OBJ:h01-01hTYPE:happlication
NOT:hAACSB:hMulticulturalh&hDiversityh|hManagement:hEnvironmentalhInfluenceh|hDierdorffh&hRubin:hM
anaginghstrategyhandhinnovation
2. Byhfocusinghonhproducthinnovationshandhupgradeshofhitshproperties,hMcDonald’shwashablehtohachievehs
trategichcompetitivenesshandhabovehaverageh returns.
ANS:h T PTS:hhh 1 DIF: Medium REF:h 3-4
OBJ:h01-01hTYPE:happlication
NOT:hAACSB:hBusinesshKnowledgehandhAnalyticalhSkillsh|hManagement:hStrategy|hDierdorffh&hRubin:h
Managinghstrategyhandhinnovation
3. Strategichcompetitivenesshishachievedhwhenhahfirmhsuccessfullyhformulateshandhimplementshahvalue-
hcreatinghstrategy.
ANS:h T PTS:hhh 1 DIF: Easy REF:h4
OBJ:h01-01hTYPE:hknowledge
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hMa
naginghstrategyh&hinnovation
4. ParthofhMcDonald’shstrategyhwashthehchoicehthathithwouldhremainhinvolvedhinhadditionalhfoodhconceptshs
uchhashBostonhMarkethandhChipotle.
ANS:h T PTS:hhh 1 DIF: Easy REF:h4
OBJ:h01-01hTYPE:happlication
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hMa
naginghstrategyh&hinnovation
5. AlligatorhEnterpriseshhashearnedhabove-
averagehreturnshsincehitshfoundinghfivehyearshago.hSincehnohotherhfirmhhashchallengedhAlligatorhinhits
hparticularhmarkethniche,hthehfirm’shownershcanhfeelhsecurehthathAlligatorhhashestablishedhahcompetiti
vehadvantage.
ANS:h F PTS:hhh 1 DIF: Hard REF:h5
OBJ:h01-01hTYPE:happlication
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hMa
naginghthehtaskhenvironment
6. Thehgoalhofhstrategichmanagementhishtohdevelophahcompetitivehadvantagehthathish permanent.
ANS:h F PTS:hhh 1 DIF: Medium REF:h5
OBJ:h01-01hTYPE:hcomprehension
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hMa
naginghstrategyh&hinnovation
1
Allhinformationhprovidedhforhreferencehonl
yhaJoinhushonhFacebook.com/thetopgrad
es
, 7. Riskhinhtermshofhfinancialhreturnshreflectshanhinvestor’shuncertaintyhaboutheconomichgainshorhlosseshthath
willhresulthfromhahparticularhinvestment.
ANS:h T PTS:hhh 1 DIF: Easy REF:h5
OBJ:h01-01hTYPE:hknowledge
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hFoundation
alhskills
8. Averagehreturnsharehreturnshinhexcesshofhwhathanhinvestorhexpectshtohearnhfromhotherhinvestmentshwithha
hsimilarhamounthofhrisk.
ANS:h F PTS:hhh 1 DIF: Medium REF:h5
OBJ:h01-01hTYPE:hknowledge
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hFoundation
alhskills
9. Returnshcanhonlyhbehmeasuredhinhaccountinghtermshsuchhashreturnhonhassets,hreturnhonhequity,horhreturnho
nhsales.
ANS:h F PTS:hhh 1 DIF: Easy REF:h5
OBJ:h01-01hTYPE:hknowledge
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hFoundation
alhskills
10. BesthBuyhoutperforminghCircuithCity,handhBesthBuy’shcontinuinghgoodhperformancehillustratehthath
permanenthsuccesshishpossible.
ANS:h F PTS:hhh 1 DIF: Medium REF:h6
OBJ:h01-01hTYPE:happlication
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hMa
naginghstrategyh&hinnovation
11. InhthehchapterhStrategichFocushcase,hCircuithCityhdidhnothachievehstrategichcompetitivenesshandhabove-
haveragehreturnshbecausehithfailedhtohsuccessfullyhimplementhitsh strategy.
ANS:h T PTS:hhh 1 DIF: Easy REF:h8
OBJ:h01-01hTYPE:happlication
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hDierdorffh&hRubin:hMa
naginghstrategyh&hinnovation
12. Economieshofhscalehandhhugehadvertisinghbudgetsharehjusthasheffectivehinhthehnewhcompetitivehl
andscapehashtheyhwerehinhthehpast,hbuththeyhmusthbehreinforcedhbyhstrategichflexibility.
ANS:h F PTS:hhh 1 DIF: Hard REF:h9
OBJ:h01-02hTYPE:hcomprehension
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hStrategyh|hManagement:h
CreationhofhValue
13. Wal-
Marthishtryinghtohachievehahboundarylesshretailinghempirehbyhimplementinghglobalhpricing,hsourc
ing,handhlogistics.
ANS:h T PTS:hhh 1 DIF: Easy REF:h10
OBJ:h01-02hTYPE:happlication
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hCreationhofhValueh|
, Dierdorffh&hRubin:hManaginghlogisticsh&htechnology
14. Thehtwohprimaryhdrivershofhhypercompetitionharehthehemergencehofhthehglobalheconomyhandht
echnology.
ANS:h T PTS:hhh 1 DIF: Easy REF:h9
OBJ:h01-02hTYPE:hknowledge
NOT:hAACSB:hMulticulturalh&hDiversityh|hManagement:hEnvironmentalhInfluenceh|hDierdorffh&hRubin:hM
anaginghstrategyh&hinnovation
15. Thehratehofhtechnologyhdiffusionhhashbeenhsteadilyhincreasinghoverhthehlasthtwoh decades.
ANS:h T PTS:hhh 1 DIF: Easy REF:h11
OBJ:h01-02hTYPE:hknowledge
NOT:hAACSB:hInformationhTechnologyh|hManagement:hInformationhTechnologyh|hDierdorffh&hRubin:hKno
wledgehofhtechnology,hdesign,h&hproduction
16. Whilehpatentshmayhbehanheffectivehwayhofhprotectinghproprietaryhtechnologyhinhsomehindustrieshsuchhash
pharmaceuticals,hmanyhfirmshcompetinghinhthehelectronicshindustryhdohnothapplyhforhpatents.
ANS:h T PTS:hhh 1 DIF: Medium REF:h12
OBJ:h01-02hTYPE:happlication
NOT:hAACSB:hInformationhTechnologyh|hManagement:hInformationhTechnologyh|hDierdorffh&hRubin:hKno
wledgehofhtechnology,hdesign,h&hproduction
17. ExampleshofhincrementalhinnovationshincludehiPods,hPDAs,hWiFi,handhwebhbrowserhsoftware.
ANS:h F PTS:hhh 1 DIF: Medium REF:h12
OBJ:h01-02hTYPE:happlication
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hCreationhofhValueh|hDierdorffh&hR
ubin:hManaginghstrategyh&hinnovation
18. Thehrapidhratehofhtechnologicalhdiffusionhhashincreasedhthehcompetitivehbenefitshofh patents.
ANS:h F PTS:hhh 1 DIF: Medium REF:h12
OBJ:h01-02hTYPE:hcomprehension
NOT:hAACSB:hBusinesshKnowledgeh&hAnalyticalhSkillsh|hManagement:hCreationhofhValueh|hDierdorffh&hR
ubin:hKnowledgehofhtechnology,hdesign,h&hproduction
19. Developedhcountrieshstillhhavehmajorhadvantageshinhaccesshtohinformationhtechnologyhoverheme
rgingheconomieshbecausehofhthehsignificanthcosthofhthehinfrastructurehneededhforhcomputinghpow
er.
ANS:h F PTS:hhh 1 DIF: Hard REF:h12
OBJ:h01-02hTYPE:hknowledge
NOT:hAACSB:hMulticulturalh&hDiversityh|hManagement:hInformationhTechnologyh|hDierdorffh&hRubin:h
Knowledgehofhtechnology,hdesign,h&hproduction
20. ThehratehofhgrowthhofhInternet-
basedhapplicationshcouldhbehaffectedhbyhthehpossibilityhofhInternethservicehprovidershcharginghuser
shforhdownloadinghthosehapplications.
ANS:h T PTS:hhh 1 DIF: Medium REF:h12
OBJ:h01-02hTYPE:hcomprehension
, NOT:hAACSB:hInformationhTechnologyh|hManagement:hCreationhofhValueh|hDierdorffh&hRubin:hM
anaginghlogisticshandhtechnology
