Question 1

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

Patents are not as effective in protecting proprietary technology in the electronics industry as they are in other industries such as pharmaceuticals. This is because the technology in the electronics industry changes so rapidly that patents often become obsolete before they can be enforced.

Question 2

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

Risk is a measure of uncertainty about the potential financial returns of an investment, taking into account both the likelihood of gains or losses and the magnitude of those gains or losses.

Question 3

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

Accepted Answer

Strategic competitiveness is indeed achieved when a firm successfully formulates and implements a value-creating strategy. This allows the firm to gain an advantage over its competitors and achieve long-term success in the market.

Question 4

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 main obstacle the CEO must face is inertia.

Accepted Answer

The statement mentions that the CEO wants to make the company strategically flexible and believes in the ability of employees to engage in continuous learning. However, the main obstacle is inertia, which refers to the resistance to change or the tendency to maintain the status quo. This suggests that the statement is true.

Question 5

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 6

Although the fast food (or quick-service)industry is unattractive,McDonald's has earned above-average returns through product innovations,enhancing existing facilities,and buying properties outside the United States.

Accepted Answer

The answer of Although the fast food (or quick-service)industry is...

Question 7

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 the two primary drivers of hypercompetition. They have contributed to increased competition by enabling businesses to easily enter new markets and quickly adopt new technologies, resulting in intense rivalry among competitors.

Question 8

The rate of growth of Internet-based applications could be affected by the possibility of Internet service providers charging users for downloading those applications.

Accepted Answer

If Internet service providers start charging users for downloading applications, it could potentially discourage users from accessing or using those applications, leading to a lower rate of growth for Internet-based applications.

Question 9

The CEO of Twin Spires,Inc.,is emotionally and intellectually committed to using the resources of 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. This commitment has carried the CEO through long periods of below-average returns on investment. The perspective of the CEO of Twin Spires is consistent with the assumptions of the industrial organization (I/O)model.

Accepted Answer

The I/O model focuses on external factors and industry structure as determinants of firm performance, rather than individual leadership or commitment to specific community needs.

Question 10

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 that is sustainable, not necessarily permanent. Competitors can always emerge and disrupt the market, which is why companies must be agile and adaptable in their strategies.

Question 11

Examples of incremental innovations include iPods,PDAs,Wi-Fi,and web browser software.

Accepted Answer

The answer of Examples of incremental innovations include iPods,PDAs,Wi-Fi,and web...

Question 12

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 13

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

Accepted Answer

The rapid advancements in technology and globalization have contributed to an increase in the rate of technology diffusion, making it easier and faster for new technologies to spread across geographical borders and industries.

Question 14

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

Accepted Answer

Average returns refer to the mean or typical return an investment generates over a period, not specifically returns in excess of expectations from similar risk investments.

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, and employee morale.

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 particular market niche does not necessarily mean that the firm has established a competitive advantage. Other factors such as barriers to entry, patented technology, or economies of scale may also play a role in determining a firm's sustained profitability. Therefore, it is not safe to assume that above-average returns for the last five years will continue indefinitely without further analysis.

Question 17

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.

Accepted Answer

The five forces model suggests that firms should target industries with the highest potential for above-average returns and then choose a strategy that best fits the industry's characteristics. These strategies could include cost-leadership, differentiation, or a focus strategy.

Question 18

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.

Accepted Answer

The answer of The uniqueness of a firm's resources and...

Question 19

The I/O (industrial organization)model assumes that the uniqueness of a firm's resources and capabilities is its main source of above-average returns.

Accepted Answer

The I/O model emphasizes the importance of the external environment and industry structure over a firm's internal resources and capabilities in determining above-average returns.

Question 20

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...

Quiz 1: Strategic Management and Strategic Competitivenes