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Test Bank for Strategic Management Concepts and Cases Competitiveness and Globalization 9th Edition Hitt

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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 it... s founding until the present time. 2. By focusing on product innovations and upgrades of its properties, McDonald’s was able to achieve strategic competitiveness and above average returns. 3. Strategic competitiveness is achieved when a firm successfully formulates and implements a value- creating strategy. 4. Part of McDonald’s strategy was the choice that it would remain involved in additional food concepts such as Boston Market and Chipotle. 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. 6. The goal of strategic management is to develop a competitive advantage that is permanent. 1 7. Risk in terms of financial returns reflects an investor’s uncertainty about economic gains or losses that will result from a particular investment. 8. Average returns are returns in excess of what an investor expects to earn from other investments with a similar amount of risk. 9. Returns can only be measured in accounting terms such as return on assets, return on equity, or return on sales. 10. Best Buy outperforming Circuit City, and Best Buy’s continuing good performance illustrate that permanent success is possible. 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. 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. 13. Wal-Mart is trying to achieve a boundaryless retailing empire by implementing global pricing, sourcing, and logistics. ................................................................................continued............................................................................... [Show More]

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