Strategic Management: Concepts and Cases: Competitiveness and Globalization - 14th - 2024
Test Bank for Strategic Management: Concepts
and Cases: Competitiveness and Globalization -
14th - 2024
1. Strategic competitiveness is achieved when a firm successfully formulates and
implements a value-creating strategy
True
2. Alligator Enterprises has earned above-average returns since its founding five years
ago. No other firm has challenged Alligator in its particular market niche; therefore,
the firm's owners can feel secure that Alligator has established a competitive
advantage
False
3. The goal of strategy implementation is to develop a permanent competitive
advantage False
4. Risk in terms of financial returns reflects an investor's uncertainty about the economic
gains or losses that will result from a particular investment
True
5. The difference between average and above-average returns is that average returns are
returns that an investor expects to earn from an investment as compared to other
investments with similar stock prices, while above-average returns are in excess of
expectations for similarly priced stocks
False
Test Bank Page 1
, Strategic Management: Concepts and Cases: Competitiveness and Globalization - 14th - 2024
6. Above-average returns are returns in excess of what an investor expects to earn
from other investments with a similar amount of risk
True
7. Particularly when assessing investments in new venture firms, the most effective, and
often the only, way to measure the performance of the firms and determine their
viability as an investment option is to examine financial metrics such as returns on
assets, and sales.
False
8. To implement a firm's strategies, the firm takes actions to enact each strategy with the
intent of achieving strategic competitiveness and above-average returns
True
9. Economies of scale and huge advertising budgets are more effective in the new
competitive landscape than they were in the past.
False
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, Test Bank For Strategic Management: Concepts and Cases: Competitiveness and Globalization - 14th - 2024
10. The two primary drivers of hyper competition are the emergence of the global economy and technology.
True
11. The rate of technology diffusion has increased significantly over the last two decades. True
12. RelTech is a firm in the electronics industry. It could protect its proprietary technology through patents.
However, it likely will not apply for patents to keep competitors from gaining access to the technological
knowledge included in the patent application.
True
13. Examples of incremental innovations include iPads, Wi-Fi, and the web browser. False
14. The rapid rate of technological diffusion has increased the competitive benefits of patents False
15. Companies searching for opportunities in the global economy would likely conclude that the three
leading European economies of Germany, United Kingdom, and France would be good investments
because they are predicted to continue increasing in size.
False
16. Since the 1980s, the basis for competition has shifted from intangible resources to hard assets False
17. The new CEO of Opacity Enterprises is determined to make the long-established firm strategically
flexible. The CEO should understand that the task is not easy, largely because of inertia that can build up
over time
True
18. The industrial organization (I/O) model suggests that above-average returns are determined primarily
by the firm's unique internal resources rather than by external capabilities.
False
19. The CEO of Twin Spires, Inc., is committed to using the expertise and resources currently in the firm to
serve the needs of the natural gardening community by providing rare and native plants to individuals and
nurseries around the United States. The perspective of the CEO of Twin Spires is consistent with the
assumptions of the industrial organization (I/O) model.
False
Test Bank Page 3
, Test Bank For Strategic Management: Concepts and Cases: Competitiveness and Globalization - 14th - 2024
20. The five forces model suggests that firms should target the industry with the highest potentialfor above-
average returns and then implement either a cost-leadership strategy or a differentiation strategy.
True
21. The uniqueness of a firm's resources and capabilities is the basis for a firm's strategy and its ability to
earn above-average returns under the industrial organization (I/O) model.
False
22. Research shows that a greater percentage of a firm's profitability is explained by the I/O model rather than
the resource-based model
False
23. All of a firm's resources and capabilities have the potential to be the foundation for a competitive
advantage
False
24. The I/O and resource-based models contain many of the same steps. One clear difference between the
two models is the resource-based model starts by looking at the internal strengths and weaknesses of a
firm, while the I/O model begins with an examination of the external environment. Another key difference
is the resource-based model identifies an attractive industry much earlier in the process than does the I/O
model.
False
Indicate whether the statement is true or false.
1. The goal of strategy implementation is to develop a permanent competitive advantage.
a. True
b. False
2. The CEO of Twin Spires, Inc., is committed to using the expertise and resources currently in the
firm to serve the needs of the natural gardening community by providing rare and native plants to
individuals and nurseries around the United States. The perspective of the CEO of Twin Spires is
Test Bank Page 4
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