TEST BANK
STRATEGIC MANAGEMENT
,Chapter 1-12 Answers Are At The End Of Each Chapter
Chapter 1
Student Name:
1) A Good Strategy Allows A Firm To Achieve Superior Performance And Sustainable
Competitive Advantage Without Regard To The External Environment.
⊚ True
⊚ False
2) The Following Statement By The 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 Strategy Framework 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 Strategy Has Been Formulated And Implemented, It Is Important That The Firm
Sticks To It No Matter What Happens.
⊚ True
⊚ False
6) Because They Are A Crucial Component Of A Firm’s Success, Customers Are Considered
Internal Stakeholders.
⊚ True
⊚ False
7) A Firm Is Required By Society And 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 Strategy Reveals 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 Profitability Alone.
B) True—Competitive Advantage Is Achieved Since Tony Has A Positive Net Income.
C) False—Competitive Advantage Is Only Achieved By Generating Above Average
Returns, Relative To Competition.
D) False—Tony More Than Likely Has 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 Profitability Alone.
B) Correct—Competitive Advantage Is Achieved Since Bill’s Auto & Airplane Repair
Shop Has A Positive Net Income.
C) Correct—Competitive Parity Is A Performance Of Two Or More Firms At The Same Level.
D) Incorrect—Bill’s Auto & Airplane Repair Shop More Than Likely Has A
Sustained Competitive Advantage Because The Business Is Diversified.
,13) To Better Achieve A Competitive Advantage, Firms Must Now Adopt A Holistic Approach
Towards Satisfying Multiple Stakeholders Opposed To Focusing On The Needs Of Their
Shareholders. What Term Is Used For This Approach?
A) Stakeholder Strategy
B) Internal Shareholder Strategy
C) Value Creation Strategy
D) Shareholder Relationship Strategy
14) All Of The Following Are External Stakeholders Except Which Of The Following?
A) Customers
B) Creditors
C) Alliance Partners
D) Competitors
15) John Is A Bit Confused About The Difference Between Stakeholders And Stockholders. You
Meet With John And Inform Him That The Main Difference Is That
A) Stakeholders Are Both Internal And External To The Firm While
Stockholders Are Considered External To The Firm.
B) Stakeholders Are Considered Internal To The Firm While Stockholders Are External
To The Firm.
C) Stakeholders Can Be Both Internal And External While Stockholders Own
Shares Of A Firm And Are Classified As Internal To The Firm.
D) Stakeholders Are External To The Firm While Stockholders Are Considered Internal
To The Firm.
16) Which Of The Following Three Important Stakeholder Attributes Should Managers Pay
Special Close Attention To In Order To Better Understand Stakeholder Impact Analysis?
A) Competitive Advantage, Economic Value, And Time
B) Power, Legitimacy, And Urgency
C) Grace Under Pressure, Financial Control, And Reward Power
D) Shareholder Rights Plan, Board Representation And Ceo Influence
,17) Mosttconsumersandinvestorstodaywanttthetfirmstheydobusinesswithtotlookbeyondjusttthetp
Rofitmotive. Intfact, Theywantfirmstthatbehavetlegallyandethicallytwhilealsotgivingtbackttothe
Ir Communitiesviaphilanthropicactivities. Theframeworkthattattemptstoreconciletthesetwants
Isknown As
A) Corporatesocialresponsibility.
B) Stakeholderimpact Analysis.
C) Businesstmodelanalysis.
D) Valuechaindrivendecisionmaking.
18) Whichofthefollowingtermstdescribestthetguidingtpolicytoaddressthecompetitivechal
Lenge, Andusescorporate- Andbusiness-Levelstrategy?
A) Analysis
B) Formulation
C) Implementation
D) Competitivetadvantage
19) In Strategictmanagement, Strategiststengagetinthreepillars. Thesetthreetpillarstinclude The
Ofmajorgoalsandobjectives.
A) Implementation
B) Presentation
C) Objectification
D) Unification
20) Whichofthefollowingtasksinthe Afitstrategyframeworkinvolvesevaluatingttheinternaland
Externaltenvironments Inwhichatfirmtoperates?
A) Analysis
B) Formulation
C) Implementation
D) Competitivetadvantage
21) Thetgoalofagoodstrategyisfocusedprimarilyon
A) Creatingtsuperiorvaluewhiletcontainingtcosts.
B) Making As Muchmoneyas Possible.
C) Employingleanmanufacturingtand Six Sigma.
D) Encouraginginvestorstotbuymoresharesofthetfirm.
,22) Foracorporatetstrategy, Whichquestionisoftenasked?
A) Howdostrategicleadersthelpshapetafirm’svision,Tmission, Andvalues?
B) Howshouldthetfirmcompete: Cost Leadership, Differentiation, Orvalueinnovation?
C) Howdotwe Createtshared Value?
D) Whereshouldthefirmcompeteintermsofindustry, Markets, Andgeography?
23) Asuccessfulstrategydetailsasetofgoal-
Directedtactionsthatmanagersmakettogainandtsustainacompetitiveadvantage; Inordertotcr
Eate This Strategy, Managersmust Focusonthreetpillars. Whichofthefollowingbelowis Not
On Eoftthesepillars?
A) Formulation
B) Execution
C) Implementation
D) Analysis
24) The
Effecttinvolvesstudyingandcopyingthecompetition, Whichresultstinun
Successfulefforts Togain Atcompetitivetadvantage.
A) Mad Hatter
B) Black Swan
C) Red Queen
D) Wizardoftoz
25) Lawrencedecidedtotcopythecompetitiontogainacompetitivetadvantagetforhiscompany. Afte
Ratyear, Herealizedhistcompanyfailedtogainsuch Antadvantage.
Lawrencemosttlikelyfailedbec Auseoftthe Effect.
A) Green Pawn
B) Grandiose
C) Globalization
D) Red Queen
26) Hewlett-
Packardwasnotabletoaddressthecompetitivechallengesofcloudandmobiletcomputing.
Thetcompanythereforetdestroyedtshareholdervaluetbyfailingttocreate
A) Astrongtinfrastructure.
B) Valueforsociety.
C) Aneedforprinters.
D) Foreigntcontacts.
, 27) Sean, Aretired Ceo, Investscapitalinatstart-
Upcompanythatcreatesbudgetingsoftware. Hementorstheentrepreneurandtheemployees
Ofthecompanybecausethetwantsthecompanytoperformwellandsurvivetinthemarket. Thus
, Seanisthestart-Upcompany’s
A) Headhunter.
B) Categorycaptain.
C) Employee.
D) Stakeholder.
28) Greenandtgoodtinc., Atmultinationalcompany, Reliesontitsmediapartner Omnisignaltotregu
Larlyadvertisetits Offers, Sales, Andnewproducts. Omnisignaltisinvestedtinthis
Relationship Becauseitgeneratestmostofitstrevenuefromadvertisingtgreenand
Good’stproducts. In This S Cenario, Omnisignalis Greenandtgoodtinc.’S
A) Stockholder.
B) Workforce.
C) Internalstakeholder.
D) Externaltstakeholder.
29) Louiseownsalargeportionof Sturdyappliance’sstock. However, Sheisnottemployedbythetc
Ompany. In This Scenario, Louiseistthetcompany’s
A) Externalstakeholder.
B) Internalstakeholder.
C) Creditor.
D) Customer.
30) Contour Inc.,Tavendor, Regularlysuppliescapacitorstotall Purpose Electronicsforusetinitsprod
Ucts. Therefore, Contour Inc. Is All Purposetelectronics’
A) Internalstakeholder.
B) Director.
C) Shareholder.
D) Externaltstakeholder.
STRATEGIC MANAGEMENT
,Chapter 1-12 Answers Are At The End Of Each Chapter
Chapter 1
Student Name:
1) A Good Strategy Allows A Firm To Achieve Superior Performance And Sustainable
Competitive Advantage Without Regard To The External Environment.
⊚ True
⊚ False
2) The Following Statement By The 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 Strategy Framework 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 Strategy Has Been Formulated And Implemented, It Is Important That The Firm
Sticks To It No Matter What Happens.
⊚ True
⊚ False
6) Because They Are A Crucial Component Of A Firm’s Success, Customers Are Considered
Internal Stakeholders.
⊚ True
⊚ False
7) A Firm Is Required By Society And 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 Strategy Reveals 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 Profitability Alone.
B) True—Competitive Advantage Is Achieved Since Tony Has A Positive Net Income.
C) False—Competitive Advantage Is Only Achieved By Generating Above Average
Returns, Relative To Competition.
D) False—Tony More Than Likely Has 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 Profitability Alone.
B) Correct—Competitive Advantage Is Achieved Since Bill’s Auto & Airplane Repair
Shop Has A Positive Net Income.
C) Correct—Competitive Parity Is A Performance Of Two Or More Firms At The Same Level.
D) Incorrect—Bill’s Auto & Airplane Repair Shop More Than Likely Has A
Sustained Competitive Advantage Because The Business Is Diversified.
,13) To Better Achieve A Competitive Advantage, Firms Must Now Adopt A Holistic Approach
Towards Satisfying Multiple Stakeholders Opposed To Focusing On The Needs Of Their
Shareholders. What Term Is Used For This Approach?
A) Stakeholder Strategy
B) Internal Shareholder Strategy
C) Value Creation Strategy
D) Shareholder Relationship Strategy
14) All Of The Following Are External Stakeholders Except Which Of The Following?
A) Customers
B) Creditors
C) Alliance Partners
D) Competitors
15) John Is A Bit Confused About The Difference Between Stakeholders And Stockholders. You
Meet With John And Inform Him That The Main Difference Is That
A) Stakeholders Are Both Internal And External To The Firm While
Stockholders Are Considered External To The Firm.
B) Stakeholders Are Considered Internal To The Firm While Stockholders Are External
To The Firm.
C) Stakeholders Can Be Both Internal And External While Stockholders Own
Shares Of A Firm And Are Classified As Internal To The Firm.
D) Stakeholders Are External To The Firm While Stockholders Are Considered Internal
To The Firm.
16) Which Of The Following Three Important Stakeholder Attributes Should Managers Pay
Special Close Attention To In Order To Better Understand Stakeholder Impact Analysis?
A) Competitive Advantage, Economic Value, And Time
B) Power, Legitimacy, And Urgency
C) Grace Under Pressure, Financial Control, And Reward Power
D) Shareholder Rights Plan, Board Representation And Ceo Influence
,17) Mosttconsumersandinvestorstodaywanttthetfirmstheydobusinesswithtotlookbeyondjusttthetp
Rofitmotive. Intfact, Theywantfirmstthatbehavetlegallyandethicallytwhilealsotgivingtbackttothe
Ir Communitiesviaphilanthropicactivities. Theframeworkthattattemptstoreconciletthesetwants
Isknown As
A) Corporatesocialresponsibility.
B) Stakeholderimpact Analysis.
C) Businesstmodelanalysis.
D) Valuechaindrivendecisionmaking.
18) Whichofthefollowingtermstdescribestthetguidingtpolicytoaddressthecompetitivechal
Lenge, Andusescorporate- Andbusiness-Levelstrategy?
A) Analysis
B) Formulation
C) Implementation
D) Competitivetadvantage
19) In Strategictmanagement, Strategiststengagetinthreepillars. Thesetthreetpillarstinclude The
Ofmajorgoalsandobjectives.
A) Implementation
B) Presentation
C) Objectification
D) Unification
20) Whichofthefollowingtasksinthe Afitstrategyframeworkinvolvesevaluatingttheinternaland
Externaltenvironments Inwhichatfirmtoperates?
A) Analysis
B) Formulation
C) Implementation
D) Competitivetadvantage
21) Thetgoalofagoodstrategyisfocusedprimarilyon
A) Creatingtsuperiorvaluewhiletcontainingtcosts.
B) Making As Muchmoneyas Possible.
C) Employingleanmanufacturingtand Six Sigma.
D) Encouraginginvestorstotbuymoresharesofthetfirm.
,22) Foracorporatetstrategy, Whichquestionisoftenasked?
A) Howdostrategicleadersthelpshapetafirm’svision,Tmission, Andvalues?
B) Howshouldthetfirmcompete: Cost Leadership, Differentiation, Orvalueinnovation?
C) Howdotwe Createtshared Value?
D) Whereshouldthefirmcompeteintermsofindustry, Markets, Andgeography?
23) Asuccessfulstrategydetailsasetofgoal-
Directedtactionsthatmanagersmakettogainandtsustainacompetitiveadvantage; Inordertotcr
Eate This Strategy, Managersmust Focusonthreetpillars. Whichofthefollowingbelowis Not
On Eoftthesepillars?
A) Formulation
B) Execution
C) Implementation
D) Analysis
24) The
Effecttinvolvesstudyingandcopyingthecompetition, Whichresultstinun
Successfulefforts Togain Atcompetitivetadvantage.
A) Mad Hatter
B) Black Swan
C) Red Queen
D) Wizardoftoz
25) Lawrencedecidedtotcopythecompetitiontogainacompetitivetadvantagetforhiscompany. Afte
Ratyear, Herealizedhistcompanyfailedtogainsuch Antadvantage.
Lawrencemosttlikelyfailedbec Auseoftthe Effect.
A) Green Pawn
B) Grandiose
C) Globalization
D) Red Queen
26) Hewlett-
Packardwasnotabletoaddressthecompetitivechallengesofcloudandmobiletcomputing.
Thetcompanythereforetdestroyedtshareholdervaluetbyfailingttocreate
A) Astrongtinfrastructure.
B) Valueforsociety.
C) Aneedforprinters.
D) Foreigntcontacts.
, 27) Sean, Aretired Ceo, Investscapitalinatstart-
Upcompanythatcreatesbudgetingsoftware. Hementorstheentrepreneurandtheemployees
Ofthecompanybecausethetwantsthecompanytoperformwellandsurvivetinthemarket. Thus
, Seanisthestart-Upcompany’s
A) Headhunter.
B) Categorycaptain.
C) Employee.
D) Stakeholder.
28) Greenandtgoodtinc., Atmultinationalcompany, Reliesontitsmediapartner Omnisignaltotregu
Larlyadvertisetits Offers, Sales, Andnewproducts. Omnisignaltisinvestedtinthis
Relationship Becauseitgeneratestmostofitstrevenuefromadvertisingtgreenand
Good’stproducts. In This S Cenario, Omnisignalis Greenandtgoodtinc.’S
A) Stockholder.
B) Workforce.
C) Internalstakeholder.
D) Externaltstakeholder.
29) Louiseownsalargeportionof Sturdyappliance’sstock. However, Sheisnottemployedbythetc
Ompany. In This Scenario, Louiseistthetcompany’s
A) Externalstakeholder.
B) Internalstakeholder.
C) Creditor.
D) Customer.
30) Contour Inc.,Tavendor, Regularlysuppliescapacitorstotall Purpose Electronicsforusetinitsprod
Ucts. Therefore, Contour Inc. Is All Purposetelectronics’
A) Internalstakeholder.
B) Director.
C) Shareholder.
D) Externaltstakeholder.
