Final answer:
To achieve strategic competitiveness and above-average returns, firms implement strategies that often involve investment in assets with the expectation of future profits. These investment strategies can include acquiring new equipment or facilities and investing in research and development. Government intervention sometimes balances large-scale production benefits with competitive market needs.
Step-by-step explanation:
To implement a firm's strategies, the firm indeed takes actions with the goal of achieving strategic competitiveness and above-average returns. This is true because the essential purpose of strategy execution is to strengthen the firm's position in the marketplace and ensure it can deliver on its strategic objectives, which often include financial performance that exceeds industry norms.
Firms often make decisions that involve investment strategies and financial assets, spending money presently expecting to earn profits in the future. Large investments like purchasing machinery, building new plants, or launching research and development projects are prime examples of such strategies. These initiatives are typically financed through various means, including equity, debt, retained earnings, or even through partnerships and alliances.
The theory of the firm teaches us that competition leads to innovative products and lower prices, while large-scale production can reduce average costs. However, in the real world, markets are not perfectly competitive, and government policymakers sometimes need to intervene to ensure a balance between the efficiency benefits of large firms and the potential negative impact on competition due to mergers and growth.