Chapter1 exercise and test

一、TRUE/FALSE:

1.The effect of globalization on Boeing is only negative and is due solely to direct competition with European-based competitor Airbus.( )

2.One way to evaluate if Airbus had achieved above average returns would be to compare stock market returns against those of Boeing.( )

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

4.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!ˉs owners can feel secure that Alligator has established a competitive advantage.( )

5. The goal of strategic management is to develop a competitive advantage that is permanently sustainable.

6. Risk in terms of financial returns reflects an investor’s u ncertainty about economic gains that will result from a particular investment.

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

8. Returns can only be measured in accounting terms.

9. If a firm can earn at least average returns it will be able to survive.

10. 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.

11. Wal-Mart is trying to achieve a boundaryless retailing empire by implementing global pricing, sourcing, and logistics.

12. It is still possible for a firm to escape the demands of globalization by operating solely in its domestic market.

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

14. http://www.doczj.com/doc/b126ef0416fc700abb68fc26.html created a competitive advantage and an entirely new industry by making use of disruptive technology.

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

16. The value of patents on inventions is increasing because of the competitive edge organizations gain by constant innovation and creation of new products.

17. Developed countries still have major advantages in information technology over developing countries because of the significant cost of the infrastructure needed for computing power.

18. Tangible assets, such as land and capital equipment, are losing their value as sources of competitive advantage in comparison to intangible assets.

19. The new CEO of Opacity Enterprises is determined to make the long-established firm strategically

20. One capability characteristic of a firm with strategic flexibility is effective management information systems.

20. One capability characteristic of a firm with strategic flexibility is effective management information systems.

21. The I/O (industrial organization) model assumes that a firm’s unique resources and capabilities are its main source of above-average returns.

22. 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

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