TEST BANK FOR
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STRATEGIC MANAGEMENT 6TH EDITION ROTHAER
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MEL FRANK 5t
ISBN 978-1266191862
5t
,Chapter 1-12 Answers are at the End of Each Chapter
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Chapter 1 5t
Student name: 5t
1) A good strategy allows a firm to achieve superior performance and sustainable competitive
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advantage without regard to the external environment.
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⊚ true 5 t
⊚ false 5 t
2) The following statement by the chief executive of MegaFilms movie studio should not be
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used as a strategy: “We will produce the greatest films of the 21st century.”
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⊚ true 5 t
⊚ false 5 t
3) The three tasks of the AFI strategy framework are to Assemble a prototype, Find a buyer, and
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
Incorporate feedback. 5t
⊚ true 5 t
⊚ false 5 t
4) Questions asked during the strategy analysis stage of the AFI framework should include “
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What effects do forces in the external environment have on the firm’s potential to gain and s
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ustain a competitive advantage?”
5t 5t 5t
⊚ true 5 t
⊚ false 5 t
,5) Once a strategy has been formulated and implemented, it is important that the firm sticks to it
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no matter what happens.
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⊚ true 5 t
⊚ false 5 t
6) Because they are a crucial component of a firm’s success, customers are considered internal
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stakeholders.
⊚ true 5 t
⊚ false 5 t
7) A firm is required by society and its shareholders to meet its ethical and philanthropic
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responsibilities.
⊚ true 5 t
⊚ false 5 t
8) Stakeholder impact analysis provides a decision tool that helps strategic leaders recognize the
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needs of different stakeholders.
5t 5t 5t
⊚ true 5 t
⊚ false 5 t
9) Juan wants to open his own hot dog restaurant but doesn’t know anything about business. He
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needs help determining who his competition is, how he should craft his strategy to compete
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and how he’ll implement his strategy to achieve a competitive advantage. He’s hired you to
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help him get started. As a result, you will probably use which of the following?
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
A) AFI strategy framework 5t 5t
B) Red Queen effect 5t 5t
C) competitive benchmarking 5t
D) Stakeholder Impact analysis 5t 5t
, 10) Roberta is interested in the concept of strategy and decides to create her own. As a result,
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Roberta says that her strategy is to focus on competitive benchmarking to achieve comp
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etitive advantage. Which is the best evaluation of Roberta’s statement?
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A) Roberta’s strategy is clear, but she should provide more detail.5t 5t 5t 5t 5t 5t 5t 5t 5t
B) Roberta’s strategy reveals a clear strategic position and tradeoff, so she should
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proceed.
C) Roberta should reevaluate her statement because it fails to mention more than one
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strategy.
D) Roberta should reevaluate her statement because it fails to meet the principles of what
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a strategy should be. 5t 5t 5t
11) Tony’s Pizza Shop is able to net $10,000 a week; this makes the shop profitable. Its number
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one competitor, Leo’s Pies, is also profitable, netting $12,000 a week. Lil Anthony’s Pizza
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Palace nets $13,000 a week. Since Tony’s Pizza Shop is profitable, we can conclude that it
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
has a competitive advantage in its industry.
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A) True—competitive advantage is achieved through profitability alone. 5t 5t 5t 5t 5t 5t
B) True—competitive advantage is achieved since Tony has a positive net income. 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
C) False—
competitive advantage is only achieved by generating above average returns, relative
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to competition.
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D) False—
Tony more than likely has a sustained competitive advantage since he’s been in busin
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ess longer. 5t
12) Bill’s Auto & Airplane Repair shop is able to generate a positive net income of $10,000 a
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week, which is about the same as the income of a close competitor. As a result, we can
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
conclude that the two businesses also have a competitive parity in the industry.
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A) Correct—competitive advantage is achieved through profitability alone. 5t 5t 5t 5t 5t 5t
B) Correct—
competitive advantage is achieved since Bill’s Auto & Airplane Repair shop has a posi
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tive net income. 5t 5t
C) Correct—competitive parity is a performance of two or more firms at the same level. 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
D) Incorrect—
Bill’s Auto & Airplane Repair shop more than likely has a sustained competitiv
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e advantage because the business is diversified.
5t 5t 5t 5t 5t 5t
5t 5t
STRATEGIC MANAGEMENT 6TH EDITION ROTHAER
5t 5t 5t 5t5t
MEL FRANK 5t
ISBN 978-1266191862
5t
,Chapter 1-12 Answers are at the End of Each Chapter
5t 5 t 5t 5t 5t 5t 5t 5t 5t
Chapter 1 5t
Student name: 5t
1) A good strategy allows a firm to achieve superior performance and sustainable competitive
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
advantage without regard to the external environment.
5t 5t 5t 5t 5t 5t
⊚ true 5 t
⊚ false 5 t
2) The following statement by the chief executive of MegaFilms movie studio should not be
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
used as a strategy: “We will produce the greatest films of the 21st century.”
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
⊚ true 5 t
⊚ false 5 t
3) The three tasks of the AFI strategy framework are to Assemble a prototype, Find a buyer, and
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
Incorporate feedback. 5t
⊚ true 5 t
⊚ false 5 t
4) Questions asked during the strategy analysis stage of the AFI framework should include “
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What effects do forces in the external environment have on the firm’s potential to gain and s
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
ustain a competitive advantage?”
5t 5t 5t
⊚ true 5 t
⊚ false 5 t
,5) Once a strategy has been formulated and implemented, it is important that the firm sticks to it
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
no matter what happens.
5t 5t 5t
⊚ true 5 t
⊚ false 5 t
6) Because they are a crucial component of a firm’s success, customers are considered internal
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
stakeholders.
⊚ true 5 t
⊚ false 5 t
7) A firm is required by society and its shareholders to meet its ethical and philanthropic
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
responsibilities.
⊚ true 5 t
⊚ false 5 t
8) Stakeholder impact analysis provides a decision tool that helps strategic leaders recognize the
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
needs of different stakeholders.
5t 5t 5t
⊚ true 5 t
⊚ false 5 t
9) Juan wants to open his own hot dog restaurant but doesn’t know anything about business. He
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
needs help determining who his competition is, how he should craft his strategy to compete
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
and how he’ll implement his strategy to achieve a competitive advantage. He’s hired you to
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
help him get started. As a result, you will probably use which of the following?
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
A) AFI strategy framework 5t 5t
B) Red Queen effect 5t 5t
C) competitive benchmarking 5t
D) Stakeholder Impact analysis 5t 5t
, 10) Roberta is interested in the concept of strategy and decides to create her own. As a result,
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
Roberta says that her strategy is to focus on competitive benchmarking to achieve comp
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
etitive advantage. Which is the best evaluation of Roberta’s statement?
5t 5t 5t 5t 5t 5t 5t 5t 5t
A) Roberta’s strategy is clear, but she should provide more detail.5t 5t 5t 5t 5t 5t 5t 5t 5t
B) Roberta’s strategy reveals a clear strategic position and tradeoff, so she should
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
proceed.
C) Roberta should reevaluate her statement because it fails to mention more than one
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strategy.
D) Roberta should reevaluate her statement because it fails to meet the principles of what
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
a strategy should be. 5t 5t 5t
11) Tony’s Pizza Shop is able to net $10,000 a week; this makes the shop profitable. Its number
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one competitor, Leo’s Pies, is also profitable, netting $12,000 a week. Lil Anthony’s Pizza
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
Palace nets $13,000 a week. Since Tony’s Pizza Shop is profitable, we can conclude that it
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
has a competitive advantage in its industry.
5t 5t 5t 5t 5t 5t 5t
A) True—competitive advantage is achieved through profitability alone. 5t 5t 5t 5t 5t 5t
B) True—competitive advantage is achieved since Tony has a positive net income. 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
C) False—
competitive advantage is only achieved by generating above average returns, relative
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to competition.
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D) False—
Tony more than likely has a sustained competitive advantage since he’s been in busin
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
ess longer. 5t
12) Bill’s Auto & Airplane Repair shop is able to generate a positive net income of $10,000 a
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week, which is about the same as the income of a close competitor. As a result, we can
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
conclude that the two businesses also have a competitive parity in the industry.
5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
A) Correct—competitive advantage is achieved through profitability alone. 5t 5t 5t 5t 5t 5t
B) Correct—
competitive advantage is achieved since Bill’s Auto & Airplane Repair shop has a posi
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tive net income. 5t 5t
C) Correct—competitive parity is a performance of two or more firms at the same level. 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t 5t
D) Incorrect—
Bill’s Auto & Airplane Repair shop more than likely has a sustained competitiv
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e advantage because the business is diversified.
5t 5t 5t 5t 5t 5t
