TEST BANK FOR
b b
STRATEGIC MANAGEMENT 6TH EDITION
b b b b
ROTHAERMEL FRANK
b b
ISBN 978-1266191862
b
,Chapter 1-12 Answers are at the End of Each Chapter
b b b b b b b b b
Chapter 1 b
Student name: b
1) A good strategy allows a firm to achieve superior performance and sustainable competitive
b b b b b b b b b b b b
badvantage without regard to the external environment.
b b b b b b
⊚ true b
⊚ false b
2) The following statement by the chief executive of MegaFilms movie studio should not be
b b b b b b b b b b b b b
bused as a strategy: “We will produce the greatest films of the 21st century.”
b b b b b b b b b b b b b
⊚ true b
⊚ false b
3) The three tasks of the AFI strategy framework are to Assemble a prototype, Find a buyer, and
b b b b b b b b b b b b b b b b
b Incorporate feedback. b
⊚ true b
⊚ false b
4) Questions asked during the strategy analysis stage of the AFI framework should include
b b b b b b b b b b b b
b“What effects do forces in the external environment have on the firm’s potential to gain and
b b b b b b b b b b b b b b b
bsustain a competitive advantage?”
b b b
⊚ true b
⊚ false b
,5) Once a strategy has been formulated and implemented, it is important that the firm sticks to it
b b b b b b b b b b b b b b b b
bno matter what happens.
b b b
⊚ true b
⊚ false b
6) Because they are a crucial component of a firm’s success, customers are considered internal
b b b b b b b b b b b b b
bstakeholders.
⊚ true b
⊚ false b
7) A firm is required by society and its shareholders to meet its ethical and philanthropic
b b b b b b b b b b b b b b
bresponsibilities.
⊚ true b
⊚ false b
8) Stakeholder impact analysis provides a decision tool that helps strategic leaders recognize the
b b b b b b b b b b b b
bneeds of different stakeholders.
b b b
⊚ true b
⊚ false b
9) Juan wants to open his own hot dog restaurant but doesn’t know anything about business. He
b b b b b b b b b b b b b b b
bneeds help determining who his competition is, how he should craft his strategy to compete
b b b b b b b b b b b b b b
band how he’ll implement his strategy to achieve a competitive advantage. He’s hired you to
b b b b b b b b b b b b b b
bhelp him get started. As a result, you will probably use which of the following?
b b b b b b b b b b b b b b
A) AFI strategy framework b b
B) Red Queen effect b b
C) competitive benchmarking b
D) Stakeholder Impact analysis b b
, 10) Roberta is interested in the concept of strategy and decides to create her own. As a result,
b b b b b b b b b b b b b b b b
bRoberta says that her strategy is to focus on competitive benchmarking to achieve
b b b b b b b b b b b b
bcompetitive advantage. Which is the best evaluation of Roberta’s statement?
b b b b b b b b b
A) Roberta’s strategy is clear, but she should provide more detail. b b b b b b b b b
B) Roberta’s strategy reveals a clear strategic position and tradeoff, so she should
b b b b b b b b b b b
proceed. b
C) Roberta should reevaluate her statement because it fails to mention more than one
b b b b b b b b b b b b
strategy. b
D) Roberta should reevaluate her statement because it fails to meet the principles of what
b b b b b b b b b b b b b
a strategy should be.
b b b b
11) Tony’s Pizza Shop is able to net $10,000 a week; this makes the shop profitable. Its number
b b b b b b b b b b b b b b b b
bone competitor, Leo’s Pies, is also profitable, netting $12,000 a week. Lil Anthony’s Pizza
b b b b b b b b b b b b b
bPalace nets $13,000 a week. Since Tony’s Pizza Shop is profitable, we can conclude that it
b b b b b b b b b b b b b b b
bhas a competitive advantage in its industry.
b b b b b b
A) True—competitive advantage is achieved through profitability alone. b b b b b b
B) True—competitive advantage is achieved since Tony has a positive net income. b b b b b b b b b b
C) False—competitive advantage is only achieved by generating above average returns, b b b b b b b b b
relative to competition.
b b b
D) False—Tony more than likely has a sustained competitive advantage since he’s been b b b b b b b b b b b
in business longer.
b b b
12) Bill’s Auto & Airplane Repair shop is able to generate a positive net income of $10,000 a
b b b b b b b b b b b b b b b b
bweek, which is about the same as the income of a close competitor. As a result, we can
b b b b b b b b b b b b b b b b b
bconclude that the two businesses also have a competitive parity in the industry.
b b b b b b b b b b b b
A) Correct—competitive advantage is achieved through profitability alone. b b b b b b
B) Correct—competitive advantage is achieved since Bill’s Auto & Airplane Repair shop b b b b b b b b b b
has a positive net income.
b b b b b
C) Correct—competitive parity is a performance of two or more firms at the same level. b b b b b b b b b b b b b
D) Incorrect—Bill’s Auto & Airplane Repair shop more than likely has a sustained b b b b b b b b b b b
competitive advantage because the business is diversified.
b b b b b b b
b b
STRATEGIC MANAGEMENT 6TH EDITION
b b b b
ROTHAERMEL FRANK
b b
ISBN 978-1266191862
b
,Chapter 1-12 Answers are at the End of Each Chapter
b b b b b b b b b
Chapter 1 b
Student name: b
1) A good strategy allows a firm to achieve superior performance and sustainable competitive
b b b b b b b b b b b b
badvantage without regard to the external environment.
b b b b b b
⊚ true b
⊚ false b
2) The following statement by the chief executive of MegaFilms movie studio should not be
b b b b b b b b b b b b b
bused as a strategy: “We will produce the greatest films of the 21st century.”
b b b b b b b b b b b b b
⊚ true b
⊚ false b
3) The three tasks of the AFI strategy framework are to Assemble a prototype, Find a buyer, and
b b b b b b b b b b b b b b b b
b Incorporate feedback. b
⊚ true b
⊚ false b
4) Questions asked during the strategy analysis stage of the AFI framework should include
b b b b b b b b b b b b
b“What effects do forces in the external environment have on the firm’s potential to gain and
b b b b b b b b b b b b b b b
bsustain a competitive advantage?”
b b b
⊚ true b
⊚ false b
,5) Once a strategy has been formulated and implemented, it is important that the firm sticks to it
b b b b b b b b b b b b b b b b
bno matter what happens.
b b b
⊚ true b
⊚ false b
6) Because they are a crucial component of a firm’s success, customers are considered internal
b b b b b b b b b b b b b
bstakeholders.
⊚ true b
⊚ false b
7) A firm is required by society and its shareholders to meet its ethical and philanthropic
b b b b b b b b b b b b b b
bresponsibilities.
⊚ true b
⊚ false b
8) Stakeholder impact analysis provides a decision tool that helps strategic leaders recognize the
b b b b b b b b b b b b
bneeds of different stakeholders.
b b b
⊚ true b
⊚ false b
9) Juan wants to open his own hot dog restaurant but doesn’t know anything about business. He
b b b b b b b b b b b b b b b
bneeds help determining who his competition is, how he should craft his strategy to compete
b b b b b b b b b b b b b b
band how he’ll implement his strategy to achieve a competitive advantage. He’s hired you to
b b b b b b b b b b b b b b
bhelp him get started. As a result, you will probably use which of the following?
b b b b b b b b b b b b b b
A) AFI strategy framework b b
B) Red Queen effect b b
C) competitive benchmarking b
D) Stakeholder Impact analysis b b
, 10) Roberta is interested in the concept of strategy and decides to create her own. As a result,
b b b b b b b b b b b b b b b b
bRoberta says that her strategy is to focus on competitive benchmarking to achieve
b b b b b b b b b b b b
bcompetitive advantage. Which is the best evaluation of Roberta’s statement?
b b b b b b b b b
A) Roberta’s strategy is clear, but she should provide more detail. b b b b b b b b b
B) Roberta’s strategy reveals a clear strategic position and tradeoff, so she should
b b b b b b b b b b b
proceed. b
C) Roberta should reevaluate her statement because it fails to mention more than one
b b b b b b b b b b b b
strategy. b
D) Roberta should reevaluate her statement because it fails to meet the principles of what
b b b b b b b b b b b b b
a strategy should be.
b b b b
11) Tony’s Pizza Shop is able to net $10,000 a week; this makes the shop profitable. Its number
b b b b b b b b b b b b b b b b
bone competitor, Leo’s Pies, is also profitable, netting $12,000 a week. Lil Anthony’s Pizza
b b b b b b b b b b b b b
bPalace nets $13,000 a week. Since Tony’s Pizza Shop is profitable, we can conclude that it
b b b b b b b b b b b b b b b
bhas a competitive advantage in its industry.
b b b b b b
A) True—competitive advantage is achieved through profitability alone. b b b b b b
B) True—competitive advantage is achieved since Tony has a positive net income. b b b b b b b b b b
C) False—competitive advantage is only achieved by generating above average returns, b b b b b b b b b
relative to competition.
b b b
D) False—Tony more than likely has a sustained competitive advantage since he’s been b b b b b b b b b b b
in business longer.
b b b
12) Bill’s Auto & Airplane Repair shop is able to generate a positive net income of $10,000 a
b b b b b b b b b b b b b b b b
bweek, which is about the same as the income of a close competitor. As a result, we can
b b b b b b b b b b b b b b b b b
bconclude that the two businesses also have a competitive parity in the industry.
b b b b b b b b b b b b
A) Correct—competitive advantage is achieved through profitability alone. b b b b b b
B) Correct—competitive advantage is achieved since Bill’s Auto & Airplane Repair shop b b b b b b b b b b
has a positive net income.
b b b b b
C) Correct—competitive parity is a performance of two or more firms at the same level. b b b b b b b b b b b b b
D) Incorrect—Bill’s Auto & Airplane Repair shop more than likely has a sustained b b b b b b b b b b b
competitive advantage because the business is diversified.
b b b b b b b
