Question 1

Strategic competitiveness is achieved when a firm successfully formulates and implements a value-creating strategy.

Accepted Answer

Strategic competitiveness is achieved when a company formulates and implements a strategy that creates value for its stakeholders, such as customers, investors, and employees. This involves developing a clear and compelling vision, analyzing the competitive environment, identifying unique strengths and capabilities, and executing a plan to achieve sustainable competitive advantage. Ultimately, firms that are strategically competitive are able to generate superior financial returns and outperform their rivals over the long term.

Question 2

Examples of incremental innovations include iPods, PDAs, WiFi, and web browser software.

Accepted Answer

False

Question 3

According to the Chapter 1 Opening Case, Barnes & Noble and Amazon were more competitive than Borders and adjusted more effectively to changes in the retail book market.

Accepted Answer

The opening case in Chapter 1 describes how Barnes & Noble and Amazon were able to adapt more effectively to changes in the retail book market, while Borders struggled and eventually went out of business. This suggests that Barnes & Noble and Amazon were more competitive in the market.

Question 4

Economies of scale and huge advertising budgets are just as effective in the new competitive landscape as they were in the past, but they must be reinforced by strategic flexibility.

Accepted Answer

The answer of Economies of scale and huge advertising budgets...

Question 5

Apple (Chapter 1 Strategic Focus) is a source of hypercompetition through its development and introduction of disruptive technologies such as the iPod.

Accepted Answer

Apple's introduction of the iPod revolutionized the music industry and created a new market, demonstrating the company's ability to create and introduce disruptive technologies that change the competitive landscape. This is an example of hypercompetition, which refers to intense and rapidly changing competition in markets.

Question 6

The rate of technology diffusion has been steadily increasing over the last two decades.

Accepted Answer

This statement is true. With the advancement of the internet and increased global connectivity, technology has become more accessible and quickly disseminated throughout society.

Question 7

Risk in terms of financial returns reflects an investor's uncertainty about economic gains or losses that will result from a particular investment.

Accepted Answer

The statement is true. Risk refers to the uncertainty surrounding potential gains or losses in financial returns.

Question 8

While patents may be an effective way of protecting proprietary technology in some industries such as pharmaceuticals, many firms competing in the electronics industry do not apply for patents.

Accepted Answer

The answer of While patents may be an effective way...

Question 9

Developed countries still have major advantages in access to information technology over emerging economies because of the significant cost of the infrastructure needed for computing power.

Accepted Answer

The answer of Developed countries still have major advantages in...

Question 10

Average returns are returns in excess of what an investor expects to earn from other investments with a similar amount of risk.

Accepted Answer

The answer of Average returns are returns in excess of...

Question 11

The rapid rate of technological diffusion has increased the competitive benefits of patents.

Accepted Answer

The answer of The rapid rate of technological diffusion has...

Question 12

The goal of strategic management is to develop a competitive advantage that is permanent.

Accepted Answer

The goal of strategic management is to develop a competitive advantage, but it may not necessarily be permanent. The competitive landscape can change over time, and a company's advantage can be eroded or surpassed by competitors. Therefore, the focus is on creating sustainable advantages that can be maintained in the long-term.

Question 13

The Chapter 1 Strategic Focus shows that while Guanxi is an important element of doing business in China, it is unimportant in doing business in the United States as Huawei discovered when it entered US markets.

Accepted Answer

Guanxi, or personal relationships, is less emphasized in the US compared to China, but it can still play a role in business dealings. Huawei's challenges in the US were more related to political and security concerns rather than the lack of Guanxi.

Question 14

According to the Chapter 1 Strategic Focus, Huawei was successful in the US market primarily because of its ability to build Guanxi with the US government.

Accepted Answer

According to the Chapter 1 Strategic Focus, Huawei was not successful in the US market primarily because of its inability to build Guanxi with the US government.

Question 15

Returns can only be measured in accounting terms such as return on assets, return on equity, or return on sales.

Accepted Answer

Returns can also be measured in non-accounting terms such as customer satisfaction, brand reputation, or employee retention.

Question 16

Alligator Enterprises has earned above-average returns since its founding five years ago. Since no other firm has challenged Alligator in its particular market niche, the firm's owners can feel secure that Alligator has established a competitive advantage.

Accepted Answer

The fact that no other firm has challenged Alligator in its market niche does not necessarily mean that the firm has established a competitive advantage. Other factors such as barriers to entry, unique resources or capabilities, and strong brand recognition also need to be considered.

Question 17

According to the Chapter 1 Opening Case, Barnes & Noble and Amazon were more effective than Borders in using the strategic management process as the foundation for the commitments, decisions, and actions they took to pursue strategic competitiveness and above-average returns.

Accepted Answer

The Chapter 1 Opening Case highlights how Barnes & Noble and Amazon utilized the strategic management process to pursue strategic competitiveness and above-average returns, while Borders fell behind in this regard.

Question 18

The Chapter 1 Opening Case shows that Borders was unsuccessful in competing in Internet book sales, but not against brick-and-mortar stores.

Accepted Answer

The answer of The Chapter 1 Opening Case shows that...

Question 19

The Chapter 1 Opening Case illustrates that while Borders was able to achieve strategic competitiveness, it did not achieve above-average returns because of conditions beyond the control of of its top management.

Accepted Answer

The Chapter 1 Opening Case actually illustrates that Borders ultimately failed to achieve strategic competitiveness and sustainable competitive advantage, leading to its eventual bankruptcy. This was due to a combination of internal factors such as poor strategic decisions and failing to adapt to changing market conditions, and external factors including the rise of e-books and online retailers like Amazon. Therefore, it did not achieve above-average returns, but this was not solely due to factors beyond its top management's control.

Question 20

The two primary drivers of hypercompetition are the emergence of the global economy and technology.

Accepted Answer

The emergence of the global economy and technology are considered to be the two primary drivers of hypercompetition. These factors have increased competition by enabling companies from all over the world to compete with each other and by providing greater access to information and resources for businesses.

Quiz 1: Strategic Management and Strategic Competitiveness