Mid-term Review Questions
Chapter 1
1. Define strategic competitiveness, strategy, competitive advantage, above-average returns, and the strategic management process.

Strategic competitiveness is achieved when a firm successfully formulates and implements a value-creating strategy.
Strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage.
Competitive advantage is when a firm implements a strategy that its competitors are unable to duplicate or find too costly to try to imitate.
Above-average returns are returns in excess of what an investor expects to earn from other investments with a similar amount of risk.
Strategic management process is the full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average returns.
2. Describe the 21st-century competitive landscape and explain how globalization and technological changes shape it.

* The fundamental nature of competition in many of the world’s industries is changing. There are rapid changes in industry boundaries and markets. * Conventional sources of competitive advantage such as economies of scale and huge advertising budgets are not as effective as they once were in terms of helping firms earn above average returns. * The conditions of competitive landscape result in a perilous business world, one where the investments that are required to compete on a global scale are enormous and the consequences of failure are severe. * Hypercompetition is a term often used to capture the realities of the competitive landscape, which is a condition of escalating competition. Its two main drivers are globalization and rapid change of technology.
Globalization brings both opportunities and challenges to firms. Globalization is the increasing economic