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