Frank T. Rothaermel -- Strategic
Management 3e -- Chapter 1-4 Test
Bank with Answers.
strategic management - Answer An integrative management field that combines analysis,
formulation, and implementation
in the quest for competitive advantage.
Good Strategy (3 elements) - Answer 1. Diagnosis of competitive advantage through
(analysis) of firm's external and internal environments
2. Guiding policy: to address competitive challenge, accomplished (formulation). Needs to be
backed up by strategic commitments such as sizable investments or changes
3. Set of coherent actions implemented for clear guiding policy (Implementation)
AFI Framework - Answer Analyze, Formulate, Implement
strategy - Answer The set of goal-directed actions a firm takes
to gain and sustain superior performance relative to competitors.
More than just a goal or company slogan.
creating superior value, while containing the cost
focus on creating value for customers and not destroying rivals
Strategies are not - Answer Grandiose statement
failure to face a competitive challenge
operational effectiveness, competitive bench-marking or other tactical tools (support but not
sufficient)
competitive advantage - Answer Superior performance (always relative) relative to other
competitors in the same industry or the industry average..
, To achieve advantage, need to provide goods/ services either of higher value or lower price
compared to competitors
Unique position through different activities or performing activities differently in order to be
similar but better
sustainable competitive advantage - Answer Outperforming competitors or the industry
average over a prolonged period of time.
competitive disadvantage - Answer Underperformance relative to other competitors in the
same industry or the industry average.
competitive parity - Answer Performance of two or more firms at the same level.
Rewards / consequence of superior value - Answer profitability and market share
Economic contribution - Answer when value creation > cost, firms generate high economic
contribution
industry effects - Answer Describes the underlying economic structure of the industry.
Firm performance attributed to the structure of the industry in which the firm competes.
atructure determined by entry+exit barriers, number and size of companies, and types of
products/services offered.
2
20% of firms profitability depends on firms performance
firm effects - Answer Firm performance attributed to the actions managers take.
Explains up to 55% of firm's performance
Other effects on firm's performance - Answer Business cycle and unexplained variance (25%)
Stakeholders and competitive advantage - Answer good strategy generate value for society
and should obey law and act ethically despite competing in own interest
Management 3e -- Chapter 1-4 Test
Bank with Answers.
strategic management - Answer An integrative management field that combines analysis,
formulation, and implementation
in the quest for competitive advantage.
Good Strategy (3 elements) - Answer 1. Diagnosis of competitive advantage through
(analysis) of firm's external and internal environments
2. Guiding policy: to address competitive challenge, accomplished (formulation). Needs to be
backed up by strategic commitments such as sizable investments or changes
3. Set of coherent actions implemented for clear guiding policy (Implementation)
AFI Framework - Answer Analyze, Formulate, Implement
strategy - Answer The set of goal-directed actions a firm takes
to gain and sustain superior performance relative to competitors.
More than just a goal or company slogan.
creating superior value, while containing the cost
focus on creating value for customers and not destroying rivals
Strategies are not - Answer Grandiose statement
failure to face a competitive challenge
operational effectiveness, competitive bench-marking or other tactical tools (support but not
sufficient)
competitive advantage - Answer Superior performance (always relative) relative to other
competitors in the same industry or the industry average..
, To achieve advantage, need to provide goods/ services either of higher value or lower price
compared to competitors
Unique position through different activities or performing activities differently in order to be
similar but better
sustainable competitive advantage - Answer Outperforming competitors or the industry
average over a prolonged period of time.
competitive disadvantage - Answer Underperformance relative to other competitors in the
same industry or the industry average.
competitive parity - Answer Performance of two or more firms at the same level.
Rewards / consequence of superior value - Answer profitability and market share
Economic contribution - Answer when value creation > cost, firms generate high economic
contribution
industry effects - Answer Describes the underlying economic structure of the industry.
Firm performance attributed to the structure of the industry in which the firm competes.
atructure determined by entry+exit barriers, number and size of companies, and types of
products/services offered.
2
20% of firms profitability depends on firms performance
firm effects - Answer Firm performance attributed to the actions managers take.
Explains up to 55% of firm's performance
Other effects on firm's performance - Answer Business cycle and unexplained variance (25%)
Stakeholders and competitive advantage - Answer good strategy generate value for society
and should obey law and act ethically despite competing in own interest
