Test Bank for Strategic Management Concepts Competitiveness and Globalization 12th Edition Hitt / All Chapters 1 – 13 / Full Complete 2023

Strategic Management Concepts Competitiveness and
Globalization 12th Edition Hitt Test Bank
Chapter 01 Strategic Management and Strategic
Competitiveness
TRUEFALSE

1. Strategic competitiveness is achieved when a firm successfully formulates and implements a
   value-creating strategy.
   (A) True
   (B) False
   Answer : (A)
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.
   (A) True
   (B) False
   Answer : (B)
3. The goal of strategy implementation is to develop a permanent competitive advantage.
   (A) True
   (B) False
   Answer : (B)
4. Risk in terms of financial returns reflects an investor’s uncertainty about economic gains or losses
   that will result from a particular investment.
   (A) True
   (B) False
   Answer : (A)
5. Average returns are those in excess of what an investor expects to earn from other investments
   with a similar amount of risk.
   (A) True

(B) False
Answer : (B)

6. Above average returns are those in excess of what an investor expects to earn from other
   investments with similar stock prices.
   (A) True
   (B) False
   Answer : (A)
7. Returns can only be measured in accounting terms such as return on assets, return on equity, or
   return on sales.
   (A) True
   (B) False
   Answer : (B)
8. To implement a firm’s strategies, the firm takes actions to with the goal of achieving strategic
   competitiveness and above average returns.
   (A) True
   (B) False
   Answer : (A)
9. Economies of scale and huge advertising budgets are just as effective in the new competitive
   landscape as they were in the past.
   (A) True
   (B) False
   Answer : (B)
10. The two primary drivers of hypercompetition are the emergence of the global economy and
    technology.
    (A) True
    (B) False
    Answer : (A)
11. The rate of technology diffusion has been steadily increasing over the last two decades.

(A) True
(B) False
Answer : (A)

12. While patents may be an effective way of protecting proprietary technology, many firms
    competing in the electronics industry do not apply for patents to prevent competitors from utilizing
    the technological knowledge that would be included in the patent application.
    (A) True
    (B) False
    Answer : (A)
13. Examples of incremental innovations include iPods, PDAs, Wi-Fi, and web browser software.
    (A) True
    (B) False
    Answer : (B)
14. The rapid rate of technological diffusion has increased the competitive benefits of patents.
    (A) True
    (B) False
    Answer : (B)
15. Developed countries still have major advantages in their access to information technology when
    compared to emerging economies because of the significant cost of the infrastructure needed for
    computing power.
    (A) True
    (B) False
    Answer : (B)
16. The rate of growth of Internet-based applications could be affected by strategies of Internet
    service providers charging users for downloading those applications.
    (A) True
    (B) False

Answer : (A)

17. The new CEO of Opacity Enterprises is determined to make the long-established firm
    strategically flexible. The CEO feels that the employees of the company have the ability, training,
    and resources to engage in continuous learning. The CEO must encourage ambidextrous learning,
    absorbing new knowledge and building incremental knowledge.
    (A) True
    (B) False
    Answer : (A)
18. The I/O (industrial organization) model assumes that the uniqueness of a firm’s resources and
    capabilities is the main source of above-average returns.
    (A) True
    (B) False
    Answer : (B)
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.
    (A) True
    (B) False
    Answer : (B)
20. The five forces model suggests that firms should target the industry with the highest potential
    for above-average returns and then implement either a cost-leadership strategy or a differentiation
    strategy.
    (A) True
    (B) False
    Answer : (A)
21. The uniqueness of a firm’s resources and capabilities is the basis for a firm’s strategy and
    determines its ability to earn above-average returns under the I/O view.
    (A) True
    (B) False