Question 1

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. It may simply indicate a lack of competition in the market. A competitive advantage is achieved when a company has something unique to offer that sets it apart from its competitors and allows it to maintain its market position over time. Without more information about Alligator's strategies and strengths, it is not possible to determine whether the firm has truly established a competitive advantage.

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 the degree of uncertainty or potential financial loss inherent in an investment decision.

Question 3

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

False

Question 4

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 5

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 6

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 Chapter 1 Opening Case describes how Barnes & Noble and Amazon were able to adapt and compete more effectively in the changing retail book market compared to Borders.

Question 7

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

Accepted Answer

The answer of Examples of incremental innovations include iPods, PDAs,...

Question 8

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

Accepted Answer

This statement is generally true, as technology is being adopted and integrated into society and businesses at an increasingly rapid pace. However, there may be some exceptions or fluctuations in certain industries or regions.

Question 9

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

Accepted Answer

This statement is true as strategic competitiveness is the ability of a firm to create and implement a strategy that allows it to outperform its competitors and achieve sustained success. This requires a focus on creating unique value for customers and effectively managing resources and capabilities to support the strategy.

Question 10

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 11

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 opening case states that Barnes & Noble and Amazon were more effective than Borders in using the strategic management process for their strategic competitiveness and above-average returns.

Question 12

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 13

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 development and introduction of the iPod disrupted the music industry and created a new market, leading to hypercompetition.

Question 14

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 have enabled businesses from different parts of the world to compete with each other, leading to hypercompetition.

Question 15

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 16

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. A sustainable competitive advantage can last for a significant period of time and allow a company to outperform its competitors, but it may eventually diminish due to changes in the industry or market conditions.

Question 17

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

The answer of The Chapter 1 Strategic Focus shows that...

Question 18

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 successful in the US market primarily because of its ability to offer high-quality, low-cost products and services, and a strong emphasis on research and development. The company also had a strong global presence and partnerships with major telecommunications companies. However, Huawei faced challenges in the US market, including suspicion and scrutiny from US government agencies about the company's possible ties to the Chinese government.

Question 19

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 20

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 loyalty, or social impact.

Quiz 1: Strategic Management and Competitiveness