TEST BANK FOR xc xc
Strategic Management 6th Edition Rothaermel Frank
xc xc xc xc xc
ISBN 9781265954574
xc
Chapter 1-12 Answers are at the End of Each Chapter
xc x c xc xc xc xc xc xc xc
Chapter 1 xc
Student name: xc
1) A good strategy allows a firm to achieve superior performance and sustainable
xc xc xc xc xc xc xc xc xc xc xc
xc competitive advantage without regard to the external environment.
xc xc xc xc xc xc xc
⊚ true x c
⊚ false x c
2) The following statement by the chief executive of MegaFilms movie studio should not
xc xc xc xc xc xc xc xc xc xc xc xc
be used as a strategy: “We will produce the greatest films of the 21st century.”
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
⊚ true x c
⊚ false x c
3) The three tasks of the AFI strategy framework are to Assemble a prototype, Find a buyer,
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
xc and Incorporate feedback.
xc xc
⊚ true x c
⊚ false x c
4) Questions asked during the strategy analysis stage of the AFI framework should include
xc xc xc xc xc xc xc xc xc xc xc xc
xc “What effects do forces in the external environment have on the firm’s potential to gain
xc xc xc xc xc xc xc xc xc xc xc xc xc xc
xc and sustain a competitive advantage?”
xc xc xc xc
⊚ true x c
⊚ false x c
,5) Once a strategy has been formulated and implemented, it is important that the firm sticks to
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
it no matter what happens.
xc xc xc xc xc
⊚ true x c
⊚ false x c
6) Because they are a crucial component of a firm’s success, customers are considered
xc xc xc xc xc xc xc xc xc xc xc xc
internal stakeholders.
xc xc
⊚ true x c
⊚ false x c
7) A firm is required by society and its shareholders to meet its ethical and
xc xc xc xc xc xc xc xc xc xc xc xc xc
philanthropic responsibilities.
xc xc
⊚ true x c
⊚ false x c
8) Stakeholder impact analysis provides a decision tool that helps strategic leaders recognize the
xc xc xc xc xc xc xc xc xc xc xc xc
xc needs of different stakeholders.
xc xc xc
⊚ true x c
⊚ false x c
9) Juan wants to open his own hot dog restaurant but doesn’t know anything about business.
xc xc xc xc xc xc xc xc xc xc xc xc xc xc
He needs help determining who his competition is, how he should craft his strategy to
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
compete and how he’ll implement his strategy to achieve a competitive advantage. He’s
xc xc xc xc xc xc xc xc xc xc xc xc xc
hired you to help him get started. As a result, you will probably use which of the
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
following?
xc
A) AFI strategy framework xc xc
B) Red Queen effect xc xc
C) competitive benchmarking xc
D) Stakeholder Impact analysis xc xc
,10) Roberta is interested in the concept of strategy and decides to create her own. As a
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
result, Roberta says that her strategy is to focus on competitive benchmarking to
xc xc xc xc xc xc xc xc xc xc xc xc xc
achieve competitive advantage. Which is the best evaluation of Roberta’s statement?
xc xc xc xc xc xc xc xc xc xc xc
A) Roberta’s strategy is clear, but she should provide more detail.xc xc xc xc xc xc xc xc xc
B) Roberta’s strategy reveals a clear strategic position and tradeoff, so she should
xc xc xc xc xc xc xc xc xc xc xc
proceed. xc
C) Roberta should reevaluate her statement because it fails to mention more than
xc xc xc xc xc xc xc xc xc xc xc
one strategy. xc xc
D) Roberta should reevaluate her statement because it fails to meet the principles of
xc xc xc xc xc xc xc xc xc xc xc xc
what a strategy should be.
xc xc xc xc xc
11) Tony’s Pizza Shop is able to net $10,000 a week; this makes the shop profitable. Its
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
number one competitor, Leo’s Pies, is also profitable, netting $12,000 a week. Lil
xc xc xc xc xc xc xc xc xc xc xc xc xc
Anthony’s Pizza Palace nets $13,000 a week. Since Tony’s Pizza Shop is profitable, we
xc xc xc xc xc xc xc xc xc xc xc xc xc xc
can conclude that it has a competitive advantage in its industry.
xc xc xc xc xc xc xc xc xc xc xc
A) True—competitive advantage is achieved through profitability alone. xc xc xc xc xc xc
B) True—competitive advantage is achieved since Tony has a positive net income. xc xc xc xc xc xc xc xc xc xc
C) False—competitive advantage is only achieved by generating above average returns, xc xc xc xc xc xc xc xc xc
relative to competition.
xc xc xc
D) False—Tony more than likely has a sustained competitive advantage since he’s been xc xc xc xc xc xc xc xc xc xc xc
in business longer.
xc xc xc
12) Bill’s Auto & Airplane Repair shop is able to generate a positive net income of $10,000
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
a week, which is about the same as the income of a close competitor. As a result, we
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
can conclude that the two businesses also have a competitive parity in the industry.
xc xc xc xc xc xc xc xc xc xc xc xc xc xc
A) Correct—competitive advantage is achieved through profitability alone. xc xc xc xc xc xc
B) Correct—competitive advantage is achieved since Bill’s Auto & Airplane Repair shop xc xc xc xc xc xc xc xc xc xc
has a positive net income.
xc xc xc xc xc
C) Correct—competitive parity is a performance of two or more firms at the same level. xc xc xc xc xc xc xc xc xc xc xc xc xc
D) Incorrect—Bill’s Auto & Airplane Repair shop more than likely has a xc xc xc xc xc xc xc xc xc xc
sustained competitive advantage because the business is diversified.
xc xc xc xc xc xc xc xc
, 13) To better achieve a competitive advantage, firms must now adopt a holistic approach
xc xc xc xc xc xc xc xc xc xc xc xc
towards satisfying multiple stakeholders opposed to focusing on the needs of their
xc xc xc xc xc xc xc xc xc xc xc xc
shareholders. What term is used for this approach?
xc xc xc xc xc xc xc xc
A) stakeholder strategy xc
B) internal shareholder strategy xc xc
C) value creation strategy xc xc
D) shareholder relationship strategy xc xc
14) All ofxc xc the following are external stakeholders except which of the following?
xc xc xc xc xc xc xc xc xc
A) customers
B) creditors
C) alliance partners xc
D) competitors
15) John is a bit confused about the difference between stakeholders and stockholders. You
xc xc xc xc xc xc xc xc xc xc xc xc
meet with John and inform him that the main difference is that
xc xc xc xc xc xc xc xc xc xc xc xc
A) stakeholders are both internal and external to the firm while stockholders are xc xc xc xc xc xc xc xc xc xc xc
considered external to the firm.
xc xc xc xc xc
B) stakeholders are considered internal to the firm while stockholders are external to xc xc xc xc xc xc xc xc xc xc xc
the firm. xc xc
C) stakeholders can be both internal and external while stockholders own shares of a xc xc xc xc xc xc xc xc xc xc xc xc
firm and are classified as internal to the firm.
xc xc xc xc xc xc xc xc xc
D) stakeholders are external to the firm while stockholders are considered internal to the xc xc xc xc xc xc xc xc xc xc xc xc
firm. xc
16) Which of the following three important stakeholder attributes should managers pay special
xc xc xc xc xc xc xc xc xc xc xc
xc close attention to in order to better understand stakeholder impact analysis?
xc xc xc xc xc xc xc xc xc xc
A) competitive advantage, economic value, and time xc xc xc xc xc
B) power, legitimacy, and urgency xc xc xc
C) grace under pressure, financial control, and reward power
xc xc xc xc xc xc xc
D) shareholder rights plan, board representation and CEO influence xc xc xc xc xc xc xc
Strategic Management 6th Edition Rothaermel Frank
xc xc xc xc xc
ISBN 9781265954574
xc
Chapter 1-12 Answers are at the End of Each Chapter
xc x c xc xc xc xc xc xc xc
Chapter 1 xc
Student name: xc
1) A good strategy allows a firm to achieve superior performance and sustainable
xc xc xc xc xc xc xc xc xc xc xc
xc competitive advantage without regard to the external environment.
xc xc xc xc xc xc xc
⊚ true x c
⊚ false x c
2) The following statement by the chief executive of MegaFilms movie studio should not
xc xc xc xc xc xc xc xc xc xc xc xc
be used as a strategy: “We will produce the greatest films of the 21st century.”
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
⊚ true x c
⊚ false x c
3) The three tasks of the AFI strategy framework are to Assemble a prototype, Find a buyer,
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
xc and Incorporate feedback.
xc xc
⊚ true x c
⊚ false x c
4) Questions asked during the strategy analysis stage of the AFI framework should include
xc xc xc xc xc xc xc xc xc xc xc xc
xc “What effects do forces in the external environment have on the firm’s potential to gain
xc xc xc xc xc xc xc xc xc xc xc xc xc xc
xc and sustain a competitive advantage?”
xc xc xc xc
⊚ true x c
⊚ false x c
,5) Once a strategy has been formulated and implemented, it is important that the firm sticks to
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
it no matter what happens.
xc xc xc xc xc
⊚ true x c
⊚ false x c
6) Because they are a crucial component of a firm’s success, customers are considered
xc xc xc xc xc xc xc xc xc xc xc xc
internal stakeholders.
xc xc
⊚ true x c
⊚ false x c
7) A firm is required by society and its shareholders to meet its ethical and
xc xc xc xc xc xc xc xc xc xc xc xc xc
philanthropic responsibilities.
xc xc
⊚ true x c
⊚ false x c
8) Stakeholder impact analysis provides a decision tool that helps strategic leaders recognize the
xc xc xc xc xc xc xc xc xc xc xc xc
xc needs of different stakeholders.
xc xc xc
⊚ true x c
⊚ false x c
9) Juan wants to open his own hot dog restaurant but doesn’t know anything about business.
xc xc xc xc xc xc xc xc xc xc xc xc xc xc
He needs help determining who his competition is, how he should craft his strategy to
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
compete and how he’ll implement his strategy to achieve a competitive advantage. He’s
xc xc xc xc xc xc xc xc xc xc xc xc xc
hired you to help him get started. As a result, you will probably use which of the
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
following?
xc
A) AFI strategy framework xc xc
B) Red Queen effect xc xc
C) competitive benchmarking xc
D) Stakeholder Impact analysis xc xc
,10) Roberta is interested in the concept of strategy and decides to create her own. As a
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
result, Roberta says that her strategy is to focus on competitive benchmarking to
xc xc xc xc xc xc xc xc xc xc xc xc xc
achieve competitive advantage. Which is the best evaluation of Roberta’s statement?
xc xc xc xc xc xc xc xc xc xc xc
A) Roberta’s strategy is clear, but she should provide more detail.xc xc xc xc xc xc xc xc xc
B) Roberta’s strategy reveals a clear strategic position and tradeoff, so she should
xc xc xc xc xc xc xc xc xc xc xc
proceed. xc
C) Roberta should reevaluate her statement because it fails to mention more than
xc xc xc xc xc xc xc xc xc xc xc
one strategy. xc xc
D) Roberta should reevaluate her statement because it fails to meet the principles of
xc xc xc xc xc xc xc xc xc xc xc xc
what a strategy should be.
xc xc xc xc xc
11) Tony’s Pizza Shop is able to net $10,000 a week; this makes the shop profitable. Its
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
number one competitor, Leo’s Pies, is also profitable, netting $12,000 a week. Lil
xc xc xc xc xc xc xc xc xc xc xc xc xc
Anthony’s Pizza Palace nets $13,000 a week. Since Tony’s Pizza Shop is profitable, we
xc xc xc xc xc xc xc xc xc xc xc xc xc xc
can conclude that it has a competitive advantage in its industry.
xc xc xc xc xc xc xc xc xc xc xc
A) True—competitive advantage is achieved through profitability alone. xc xc xc xc xc xc
B) True—competitive advantage is achieved since Tony has a positive net income. xc xc xc xc xc xc xc xc xc xc
C) False—competitive advantage is only achieved by generating above average returns, xc xc xc xc xc xc xc xc xc
relative to competition.
xc xc xc
D) False—Tony more than likely has a sustained competitive advantage since he’s been xc xc xc xc xc xc xc xc xc xc xc
in business longer.
xc xc xc
12) Bill’s Auto & Airplane Repair shop is able to generate a positive net income of $10,000
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
a week, which is about the same as the income of a close competitor. As a result, we
xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc xc
can conclude that the two businesses also have a competitive parity in the industry.
xc xc xc xc xc xc xc xc xc xc xc xc xc xc
A) Correct—competitive advantage is achieved through profitability alone. xc xc xc xc xc xc
B) Correct—competitive advantage is achieved since Bill’s Auto & Airplane Repair shop xc xc xc xc xc xc xc xc xc xc
has a positive net income.
xc xc xc xc xc
C) Correct—competitive parity is a performance of two or more firms at the same level. xc xc xc xc xc xc xc xc xc xc xc xc xc
D) Incorrect—Bill’s Auto & Airplane Repair shop more than likely has a xc xc xc xc xc xc xc xc xc xc
sustained competitive advantage because the business is diversified.
xc xc xc xc xc xc xc xc
, 13) To better achieve a competitive advantage, firms must now adopt a holistic approach
xc xc xc xc xc xc xc xc xc xc xc xc
towards satisfying multiple stakeholders opposed to focusing on the needs of their
xc xc xc xc xc xc xc xc xc xc xc xc
shareholders. What term is used for this approach?
xc xc xc xc xc xc xc xc
A) stakeholder strategy xc
B) internal shareholder strategy xc xc
C) value creation strategy xc xc
D) shareholder relationship strategy xc xc
14) All ofxc xc the following are external stakeholders except which of the following?
xc xc xc xc xc xc xc xc xc
A) customers
B) creditors
C) alliance partners xc
D) competitors
15) John is a bit confused about the difference between stakeholders and stockholders. You
xc xc xc xc xc xc xc xc xc xc xc xc
meet with John and inform him that the main difference is that
xc xc xc xc xc xc xc xc xc xc xc xc
A) stakeholders are both internal and external to the firm while stockholders are xc xc xc xc xc xc xc xc xc xc xc
considered external to the firm.
xc xc xc xc xc
B) stakeholders are considered internal to the firm while stockholders are external to xc xc xc xc xc xc xc xc xc xc xc
the firm. xc xc
C) stakeholders can be both internal and external while stockholders own shares of a xc xc xc xc xc xc xc xc xc xc xc xc
firm and are classified as internal to the firm.
xc xc xc xc xc xc xc xc xc
D) stakeholders are external to the firm while stockholders are considered internal to the xc xc xc xc xc xc xc xc xc xc xc xc
firm. xc
16) Which of the following three important stakeholder attributes should managers pay special
xc xc xc xc xc xc xc xc xc xc xc
xc close attention to in order to better understand stakeholder impact analysis?
xc xc xc xc xc xc xc xc xc xc
A) competitive advantage, economic value, and time xc xc xc xc xc
B) power, legitimacy, and urgency xc xc xc
C) grace under pressure, financial control, and reward power
xc xc xc xc xc xc xc
D) shareholder rights plan, board representation and CEO influence xc xc xc xc xc xc xc
