TEST BANK FOR
STRATEGICMANAGEMENT6THEDITION
ROTHAERMEL FRANK
ISBN978-1266191862
,Chapter 1-12 Answers are at the End of Each Chapter
Chapter1
Studentname:
1) A good strategyallows a firm to achieve superior performance and sustainable competitive
advantage without regard to the external environment.
⊚ true
⊚ false
2) The following statement bythe chief executive of MegaFilms movie studio should not be used
as a strategy: “We will produce the greatest films of the 21st century.”
⊚ true
⊚ false
3) The three tasks of the AFI strategyframework are to Assemble a prototype, Find a buyer, and
Incorporate feedback.
⊚ true
⊚ false
4) Questions asked during the strategy analysis stage of the AFI framework should include “What
effects do forces in the external environment have on the firm’s potential to gain and sustain a
competitive advantage?”
⊚ true
⊚ false
,5) Once a strategyhas been formulated and implemented, it is important that the firm sticks to it no
matter what happens.
⊚ true
⊚ false
6) Because theyare a crucial component of a firm’s success, customers are considered internal
stakeholders.
⊚ true
⊚ false
7) A firm is required bysocietyand its shareholders to meet its ethical and philanthropic
responsibilities.
⊚ true
⊚ false
8) Stakeholder impact analysis provides a decision tool that helps strategic leaders recognize the
needs of different stakeholders.
⊚ true
⊚ false
9) Juan wants to open his own hot dog restaurant but doesn’t know anything about business. He needs
help determining who his competition is, how he should craft his strategy to compete and how
he’ll implement his strategy to achieve a competitive advantage. He’s hired you to help him get
started. As a result, you will probably use which of the following?
A) AFI strategy framework
B) Red Queen effect
C) competitive benchmarking
D) Stakeholder Impact analysis
, 10) Roberta is interested in the concept of strategy and decides to create her own. As a result,
Roberta says that her strategy is to focus on competitive benchmarking to achieve competitive
advantage. Which is the best evaluation of Roberta’s statement?
A) Roberta’s strategy is clear, but she should provide more detail.
B) Roberta’s strategyreveals a clear strategic position and tradeoff, so she should
proceed.
C) Roberta should reevaluate her statement because it fails to mention more than one
strategy.
D) Roberta should reevaluate her statement because it fails to meet the principles of what a
strategy should be.
11) Tony’s Pizza Shop is able to net $10,000 a week; this makes the shop profitable. Its number one
competitor, Leo’s Pies, is also profitable, netting $12,000 a week. Lil Anthony’s Pizza Palace
nets $13,000 a week. Since Tony’s Pizza Shop is profitable, we can conclude that it has a
competitive advantage in its industry.
A) True—competitive advantage is achieved through profitabilityalone.
B) True—competitive advantage is achieved since Tony has a positive net income.
C) False—competitive advantageis onlyachieved bygeneratingabove average returns,
relative to competition.
D) False—Tonymore than likelyhas a sustained competitive advantage since he’s been in
business longer.
12) Bill’s Auto & Airplane Repair shop is able to generate a positive net income of $10,000 a week,
which is about the same as the income of a close competitor. As a result, we can conclude that
the two businesses also have a competitive parity in the industry.
A) Correct—competitive advantage is achieved through profitabilityalone.
B) Correct—competitive advantage is achieved since Bill’s Auto & Airplane Repair shop has
a positive net income.
C) Correct—competitive parityis a performance of two or more firms at the same level.
D) Incorrect—Bill’s Auto & Airplane Repair shop more than likelyhas a sustained
competitive advantage because the business is diversified.
STRATEGICMANAGEMENT6THEDITION
ROTHAERMEL FRANK
ISBN978-1266191862
,Chapter 1-12 Answers are at the End of Each Chapter
Chapter1
Studentname:
1) A good strategyallows a firm to achieve superior performance and sustainable competitive
advantage without regard to the external environment.
⊚ true
⊚ false
2) The following statement bythe chief executive of MegaFilms movie studio should not be used
as a strategy: “We will produce the greatest films of the 21st century.”
⊚ true
⊚ false
3) The three tasks of the AFI strategyframework are to Assemble a prototype, Find a buyer, and
Incorporate feedback.
⊚ true
⊚ false
4) Questions asked during the strategy analysis stage of the AFI framework should include “What
effects do forces in the external environment have on the firm’s potential to gain and sustain a
competitive advantage?”
⊚ true
⊚ false
,5) Once a strategyhas been formulated and implemented, it is important that the firm sticks to it no
matter what happens.
⊚ true
⊚ false
6) Because theyare a crucial component of a firm’s success, customers are considered internal
stakeholders.
⊚ true
⊚ false
7) A firm is required bysocietyand its shareholders to meet its ethical and philanthropic
responsibilities.
⊚ true
⊚ false
8) Stakeholder impact analysis provides a decision tool that helps strategic leaders recognize the
needs of different stakeholders.
⊚ true
⊚ false
9) Juan wants to open his own hot dog restaurant but doesn’t know anything about business. He needs
help determining who his competition is, how he should craft his strategy to compete and how
he’ll implement his strategy to achieve a competitive advantage. He’s hired you to help him get
started. As a result, you will probably use which of the following?
A) AFI strategy framework
B) Red Queen effect
C) competitive benchmarking
D) Stakeholder Impact analysis
, 10) Roberta is interested in the concept of strategy and decides to create her own. As a result,
Roberta says that her strategy is to focus on competitive benchmarking to achieve competitive
advantage. Which is the best evaluation of Roberta’s statement?
A) Roberta’s strategy is clear, but she should provide more detail.
B) Roberta’s strategyreveals a clear strategic position and tradeoff, so she should
proceed.
C) Roberta should reevaluate her statement because it fails to mention more than one
strategy.
D) Roberta should reevaluate her statement because it fails to meet the principles of what a
strategy should be.
11) Tony’s Pizza Shop is able to net $10,000 a week; this makes the shop profitable. Its number one
competitor, Leo’s Pies, is also profitable, netting $12,000 a week. Lil Anthony’s Pizza Palace
nets $13,000 a week. Since Tony’s Pizza Shop is profitable, we can conclude that it has a
competitive advantage in its industry.
A) True—competitive advantage is achieved through profitabilityalone.
B) True—competitive advantage is achieved since Tony has a positive net income.
C) False—competitive advantageis onlyachieved bygeneratingabove average returns,
relative to competition.
D) False—Tonymore than likelyhas a sustained competitive advantage since he’s been in
business longer.
12) Bill’s Auto & Airplane Repair shop is able to generate a positive net income of $10,000 a week,
which is about the same as the income of a close competitor. As a result, we can conclude that
the two businesses also have a competitive parity in the industry.
A) Correct—competitive advantage is achieved through profitabilityalone.
B) Correct—competitive advantage is achieved since Bill’s Auto & Airplane Repair shop has
a positive net income.
C) Correct—competitive parityis a performance of two or more firms at the same level.
D) Incorrect—Bill’s Auto & Airplane Repair shop more than likelyhas a sustained
competitive advantage because the business is diversified.
