Chapter 1—Strategic Management and Strategic Competitiveness
TRUE/FALSE
1. The Opening Case shows that McDonald’s is one of the few firms able to achieve strategic
competitiveness from its founding until the present time.
ANS: F PTS: 1 DIF: Medium REF: 3
OBJ: 01-01 TYPE: application
NOT: AACSB: Multicultural & Diversity | Management: Environmental Influence | Dierdorff & Rubin:
Managing strategy and innovation
2. By focusing on product innovations and upgrades of its properties, McDonald’s was able to achieve
strategic competitiveness and above average returns.
ANS: T PTS: 1 DIF: Medium REF: 3-4
OBJ: 01-01 TYPE: application
NOT: AACSB: Business Knowledge and Analytical Skills | Management: Strategy| Dierdorff & Rubin:
Managing strategy and innovation
3. Strategic competitiveness is achieved when a firm successfully formulates and implements a value-
creating strategy.
ANS: T PTS: 1 DIF: Easy REF: 4
OBJ: 01-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing strategy & innovation
4. Part of McDonald’s strategy was the choice that it would remain involved in additional food concepts
such as Boston Market and Chipotle.
ANS: T PTS: 1 DIF: Easy REF: 4
OBJ: 01-01 TYPE: application
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing strategy & innovation
5. 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.
ANS: F PTS: 1 DIF: Hard REF: 5
OBJ: 01-01 TYPE: application
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing the task environment
6. The goal of strategic management is to develop a competitive advantage that is permanent.
ANS: F PTS: 1 DIF: Medium REF: 5
OBJ: 01-01 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing strategy & innovation
1
All information provided for reference only
aJoin us on Facebook.com/thetopgrades
, 7. Risk in terms of financial returns reflects an investor’s uncertainty about economic gains or losses that
will result from a particular investment.
ANS: T PTS: 1 DIF: Easy REF: 5
OBJ: 01-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Foundational skills
8. Average returns are returns in excess of what an investor expects to earn from other investments with
a similar amount of risk.
ANS: F PTS: 1 DIF: Medium REF: 5
OBJ: 01-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Foundational skills
9. Returns can only be measured in accounting terms such as return on assets, return on equity, or return
on sales.
ANS: F PTS: 1 DIF: Easy REF: 5
OBJ: 01-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Foundational skills
10. Best Buy outperforming Circuit City, and Best Buy’s continuing good performance illustrate that
permanent success is possible.
ANS: F PTS: 1 DIF: Medium REF: 6
OBJ: 01-01 TYPE: application
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing strategy & innovation
11. In the chapter Strategic Focus case, Circuit City did not achieve strategic competitiveness and above-
average returns because it failed to successfully implement its strategy.
ANS: T PTS: 1 DIF: Easy REF: 8
OBJ: 01-01 TYPE: application
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing strategy & innovation
12. 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.
ANS: F PTS: 1 DIF: Hard REF: 9
OBJ: 01-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Management:
Creation of Value
13. Wal-Mart is trying to achieve a boundaryless retailing empire by implementing global pricing,
sourcing, and logistics.
ANS: T PTS: 1 DIF: Easy REF: 10
OBJ: 01-02 TYPE: application
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value |
, Dierdorff & Rubin: Managing logistics & technology
14. The two primary drivers of hypercompetition are the emergence of the global economy and
technology.
ANS: T PTS: 1 DIF: Easy REF: 9
OBJ: 01-02 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity | Management: Environmental Influence | Dierdorff & Rubin:
Managing strategy & innovation
15. The rate of technology diffusion has been steadily increasing over the last two decades.
ANS: T PTS: 1 DIF: Easy REF: 11
OBJ: 01-02 TYPE: knowledge
NOT: AACSB: Information Technology | Management: Information Technology | Dierdorff & Rubin:
Knowledge of technology, design, & production
16. 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.
ANS: T PTS: 1 DIF: Medium REF: 12
OBJ: 01-02 TYPE: application
NOT: AACSB: Information Technology | Management: Information Technology | Dierdorff & Rubin:
Knowledge of technology, design, & production
17. Examples of incremental innovations include iPods, PDAs, WiFi, and web browser software.
ANS: F PTS: 1 DIF: Medium REF: 12
OBJ: 01-02 TYPE: application
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff &
Rubin: Managing strategy & innovation
18. The rapid rate of technological diffusion has increased the competitive benefits of patents.
ANS: F PTS: 1 DIF: Medium REF: 12
OBJ: 01-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff &
Rubin: Knowledge of technology, design, & production
19. 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.
ANS: F PTS: 1 DIF: Hard REF: 12
OBJ: 01-02 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity | Management: Information Technology | Dierdorff & Rubin:
Knowledge of technology, design, & production
20. The rate of growth of Internet-based applications could be affected by the possibility of Internet
service providers charging users for downloading those applications.
ANS: T PTS: 1 DIF: Medium REF: 12
OBJ: 01-02 TYPE: comprehension
, NOT: AACSB: Information Technology | Management: Creation of Value | Dierdorff & Rubin:
Managing logistics and technology
TRUE/FALSE
1. The Opening Case shows that McDonald’s is one of the few firms able to achieve strategic
competitiveness from its founding until the present time.
ANS: F PTS: 1 DIF: Medium REF: 3
OBJ: 01-01 TYPE: application
NOT: AACSB: Multicultural & Diversity | Management: Environmental Influence | Dierdorff & Rubin:
Managing strategy and innovation
2. By focusing on product innovations and upgrades of its properties, McDonald’s was able to achieve
strategic competitiveness and above average returns.
ANS: T PTS: 1 DIF: Medium REF: 3-4
OBJ: 01-01 TYPE: application
NOT: AACSB: Business Knowledge and Analytical Skills | Management: Strategy| Dierdorff & Rubin:
Managing strategy and innovation
3. Strategic competitiveness is achieved when a firm successfully formulates and implements a value-
creating strategy.
ANS: T PTS: 1 DIF: Easy REF: 4
OBJ: 01-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing strategy & innovation
4. Part of McDonald’s strategy was the choice that it would remain involved in additional food concepts
such as Boston Market and Chipotle.
ANS: T PTS: 1 DIF: Easy REF: 4
OBJ: 01-01 TYPE: application
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing strategy & innovation
5. 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.
ANS: F PTS: 1 DIF: Hard REF: 5
OBJ: 01-01 TYPE: application
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing the task environment
6. The goal of strategic management is to develop a competitive advantage that is permanent.
ANS: F PTS: 1 DIF: Medium REF: 5
OBJ: 01-01 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing strategy & innovation
1
All information provided for reference only
aJoin us on Facebook.com/thetopgrades
, 7. Risk in terms of financial returns reflects an investor’s uncertainty about economic gains or losses that
will result from a particular investment.
ANS: T PTS: 1 DIF: Easy REF: 5
OBJ: 01-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Foundational skills
8. Average returns are returns in excess of what an investor expects to earn from other investments with
a similar amount of risk.
ANS: F PTS: 1 DIF: Medium REF: 5
OBJ: 01-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Foundational skills
9. Returns can only be measured in accounting terms such as return on assets, return on equity, or return
on sales.
ANS: F PTS: 1 DIF: Easy REF: 5
OBJ: 01-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Foundational skills
10. Best Buy outperforming Circuit City, and Best Buy’s continuing good performance illustrate that
permanent success is possible.
ANS: F PTS: 1 DIF: Medium REF: 6
OBJ: 01-01 TYPE: application
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing strategy & innovation
11. In the chapter Strategic Focus case, Circuit City did not achieve strategic competitiveness and above-
average returns because it failed to successfully implement its strategy.
ANS: T PTS: 1 DIF: Easy REF: 8
OBJ: 01-01 TYPE: application
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing strategy & innovation
12. 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.
ANS: F PTS: 1 DIF: Hard REF: 9
OBJ: 01-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Management:
Creation of Value
13. Wal-Mart is trying to achieve a boundaryless retailing empire by implementing global pricing,
sourcing, and logistics.
ANS: T PTS: 1 DIF: Easy REF: 10
OBJ: 01-02 TYPE: application
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value |
, Dierdorff & Rubin: Managing logistics & technology
14. The two primary drivers of hypercompetition are the emergence of the global economy and
technology.
ANS: T PTS: 1 DIF: Easy REF: 9
OBJ: 01-02 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity | Management: Environmental Influence | Dierdorff & Rubin:
Managing strategy & innovation
15. The rate of technology diffusion has been steadily increasing over the last two decades.
ANS: T PTS: 1 DIF: Easy REF: 11
OBJ: 01-02 TYPE: knowledge
NOT: AACSB: Information Technology | Management: Information Technology | Dierdorff & Rubin:
Knowledge of technology, design, & production
16. 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.
ANS: T PTS: 1 DIF: Medium REF: 12
OBJ: 01-02 TYPE: application
NOT: AACSB: Information Technology | Management: Information Technology | Dierdorff & Rubin:
Knowledge of technology, design, & production
17. Examples of incremental innovations include iPods, PDAs, WiFi, and web browser software.
ANS: F PTS: 1 DIF: Medium REF: 12
OBJ: 01-02 TYPE: application
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff &
Rubin: Managing strategy & innovation
18. The rapid rate of technological diffusion has increased the competitive benefits of patents.
ANS: F PTS: 1 DIF: Medium REF: 12
OBJ: 01-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff &
Rubin: Knowledge of technology, design, & production
19. 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.
ANS: F PTS: 1 DIF: Hard REF: 12
OBJ: 01-02 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity | Management: Information Technology | Dierdorff & Rubin:
Knowledge of technology, design, & production
20. The rate of growth of Internet-based applications could be affected by the possibility of Internet
service providers charging users for downloading those applications.
ANS: T PTS: 1 DIF: Medium REF: 12
OBJ: 01-02 TYPE: comprehension
, NOT: AACSB: Information Technology | Management: Creation of Value | Dierdorff & Rubin:
Managing logistics and technology
