Question 1

Average returns are those 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 on an investment over a period of time, not specifically returns in excess of expectations from other investments with similar risk.

Question 2

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.

Accepted Answer

Many firms in the electronics industry choose not to apply for patents to prevent competitors from accessing their technological knowledge.

Question 3

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.

Accepted Answer

False

Question 4

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

Accepted Answer

Internet service providers may limit or charge for access to certain applications, which could slow down the growth of those applications.

Question 5

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 value, or social impact.

Question 6

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.

Accepted Answer

The statement indicates that the CEO wants to promote continuous learning and ambidextrous learning among employees, which suggests a desire for strategic flexibility. Therefore, the statement is true.

Question 7

The goal of strategy implementation is to develop a permanent competitive advantage.

Accepted Answer

The answer of The goal of strategy implementation is to...

Question 8

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,...

Question 9

Economies of scale and huge advertising budgets are just as effective in the new competitive landscape as they were in the past.

Accepted Answer

The new competitive landscape is characterized by disruptive technologies, nimble competitors, and changing consumer preferences. In such an environment, economies of scale and huge advertising budgets may not be as effective as they were in the past. Rather, companies that can innovate quickly, personalize their offerings, and build strong customer relationships are likely to succeed.

Question 10

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 11

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

This statement is true. Risk refers to the potential for financial loss, and investors often weigh the risk of different investments against the potential for financial returns. Uncertainty about economic gains or losses is a key factor in assessing risk.

Question 12

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.

Accepted Answer

The I/O model emphasizes the importance of the external environment and industry structure over the uniqueness of a firm's resources and capabilities as the main source of above-average returns.

Question 13

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

Accepted Answer

Strategic competitiveness is the ability of a firm to successfully form and implement a strategy that creates value for its stakeholders, including customers, employees, shareholders, and society. When a firm achieves this, it can gain a competitive advantage over its rivals, leading to long-term success and profitability.

Question 14

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

This statement accurately reflects the recommendations of the five forces model for firms seeking to achieve above-average returns in their industry.

Question 15

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.

Accepted Answer

The answer of Alligator Enterprises has earned above-average returns since...

Question 16

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

Accepted Answer

This statement is true. The rapid advancement in communication technologies and the widespread access to the internet have contributed to the faster diffusion of technology. Globalization also plays a role in the increased rate of technology diffusion. As technology becomes more accessible and affordable, it spreads more quickly across geographical and cultural borders. This has led to faster adoption of new technologies in various industries and sectors.

Question 17

?Above average returns are those in excess of what an investor expects to earn from other investments with similar stock prices.

Accepted Answer

Above average returns refer to higher returns than what an investor would typically expect to earn from other investments with similar stock prices.

Question 18

?To implement a firm's strategies, the firm takes actions to with the goal of achieving strategic competitiveness and above average returns.

Accepted Answer

This statement is true. A firm must implement its strategies through actions in order to achieve strategic competitiveness and gain above average returns. Without action, the strategies will not result in actual accomplishments or success.

Question 19

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 both contributed to the intensification of competition, leading to hypercompetition.

Question 20

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.

Accepted Answer

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

Quiz 1: Strategic Management and Strategic Competitiveness