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