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