4. Which of the following stages of the strategic management process involves an
evaluation of a firm's external and internal environments?
Frank Rothaermel strategic management Test bank 6th edition
UPDATED 2023 QUESTIONS AND ANSWERS GRADED A+ A. Strategy
analysis
B. Strategy
implementation
C. Strategy
formulation
1. Keeping in mind Apple's competitive advantage, which of the following products was
D. Strategy
introduced by Apple in 2007?
control
5. In , a firm frames a guiding policy to address the competitive challenge.
A. iPa
d
B. iPhon A. strategy
e control
C. iPo B. strategy
d implementation
D. iTune C. strategy
s formulation
D. strategy
2. is best described as an integrative management field that combines analysis,
analysis
formulation, and implementation in the quest for competitive advantage.
6. Through , a firm puts its guiding policy into practice by employing a set of
coherent actions.
A. Supply chain
management
B. Integrated technology A. strategy
management control
C. Strategic B. strategy
management implementation
D. Inventory C. strategy
management formulation
D. strategy
3. is best described as a set of goal-directed actions a firm takes to gain andsustain
analysis
superior performance relative to competitors.
A. Behavior
modification
B. Strateg
y
C. Cred
o
D. Competency
management
,7. A firm that achieves superior performance relative to other firms in the same industryor the 10. If SA Pharmaceuticals obtains an 18 percent return on invested capital, which of thefollowing
industry average has a(n) . will help determine if it has a competitive advantage over other pharmaceutical companies?
A. competitive A. Comparing the return to the return on invested capital obtained by other firmsin the
advantage industry
B. balanced B. Assessing the value based on the shareholders' expectations of return ontheir
scorecard capital
C. power C. Evaluating the liquidity ratios for other pharmaceutical
position companies
D. equity D. Comparing the value to the history of the firm's return of investment over anumber of
leverage years
8. Cadia Foods Inc. was the first company to start selling energy drinks in its country—aproduct 11. Underperformance relative to other firms in the same industry or the industryaverage
that gained popularity among diverse groups. Soon, other companies startedto sell their own results in a(n) for a firm.
brands of energy drinks, thereby giving Cadia Foods ample competition. In response, Cadia
Foods decided to limit its variety of energy drinks to only two. However, it ensured that these
two flavors were free of calories and low in cost. With this innovation, Cadia Foods Inc. A. sustainable competitive
consistently outperformed its competitorsfor ten years. In this scenario, Cadia Foods Inc. has advantage
maintained a through its B. increased power
innovative strategy. distance
C. diseconomies of
scope
A. balanced D. competitive
scorecard disadvantage
B. fiduciary
responsibility 12. New Communications Inc. is a newspaper publishing company whose average returnon
C. consistent power invested capital is approximately 5 percent. Because newspaper publishing is adeclining
position industry, the industry average has been negative (-5 percent) for the last few years. In this
D. sustainable competitive scenario, New Communications Inc. has a .
advantage
9. Which of the following scenarios illustrates a firm that has a sustainable competitive A. competitive
advantage? advantage
B. balanced
scorecard
A. Newon Inc. generated a revenue of $300,000 this financial year, which is close tothe C. competitive
industrial revenue average of $320,000. disadvantage
B. SM Inc. almost doubled its sales to 8500 units this year compared to its previousyear's D. power
sales of 5000 units, though the industry average is 10,000 units. position
C. TrueLink Corp. was able to hold its market share of 68 percent in the social
networking industry for more than three years.
D. Max Electrova Inc. was able to outperform its competitors with its new productionsystem, in
terms of revenue, for a brief period of four months.
,13. Exis Inc. and Stelma Inc. are two companies that have been manufacturing typewriters for 16. FindFor Inc. is an e-commerce retail firm that sells a variety of merchandise online. Through
almost 30 years. Due to the reduced demand for typewriters today, both companies' average services like cash on delivery, easy return, and online tracking, the companyhas created more
return on invested capital is approximately -5 percent. The current industry average is 2 customer value than its competitors (brick-and-mortar businesses) at the same price. Also, the
percent. In this scenario, Exis Inc. and Stelma Inc. mostlikely have: company's costs are substantially low due to minimal investment in operation and
administration. In this scenario, FindFor Inc. has most likely been able to provide superior value
and cost control through .
A. competitive advantage over other firms in their
industry.
B. competitive parity with each A. strategic
other. parity
C. strategic alliance with each B. strategic
other. profiling
D. economies of scope instead of economies of C. strategic
scale. liquidation
D. strategic
14. The average cost of production for a bottle of vitamin water in the industry is $4 while its positioning
average price is $7. StoreAll Inc. manufactures the same product for $3 perbottle and sells it
for $7 per bottle. Which of the following statements is most likely true of StoreAll Inc. in this 17. When a firm adopts a differentiation strategy to attain competitive advantage, itfocuses on:
scenario?
A. delivering unique features to its
A. It has a competitive advantage in the customers.
industry. B. providing the lowest prices to its
B. It has a competitive disadvantage in the customers.
industry. C. maximizing its profits by providing minimal customer
C. It has competitive parity with other firms in the service.
industry. D. lowering costs by employing low-skill
D. It has formed a strategic alliance with other firms in the employees.
industry.
18. True Cinemas Inc. and Digi Future Inc. are two companies that own and run movie theaters in
15. A firm is said to gain a competitive advantage when it can: malls and other commercial areas. While True Cinemas Inc. pursues a cost-leadership
strategy, Digi Future Inc. adopts a differentiation strategy. Which ofthe following statements is
most likely true of this scenario?
A. exceed its own previous
performances.
B. provide products similar to its competitors, but atlower A. True Cinemas will charge a premium price for its customers while Digi Future will
prices. implement everyday low pricing.
C. perform at the same level as that of its B. Digi Future and True Cinemas will not be direct competitors to each other and their customer
competitors. segments will overlap very little.
D. minimize the difference between value creationand C. Digi Future will keep its customer service at an acceptable level while TrueCinemas
cost. will provide superior customer service.
D. True Cinemas and Digi Future will use a similar approach to create value for
customers by attempting to offer everything to everybody.
, 19. For a firm that operates in an industry where competition is high, which of the following 22. Pink Couture Inc. and Pink Blush Inc. are two companies in the apparel industry. WhilePink
practices will result in inferior performance? Couture Inc. focuses on providing unique product features and superior customerservice, Pink
Blush Inc. focuses on low prices and minimal customer service. Both companies have been able
to gain a competitive advantage. This is most likely because:
A. Choosing a distinct but different strategic position inthe
industry
B. Working toward increasing the difference between value A. the companies have executed integrated
creation and cost strategies.
C. Trying to be everything to everybody by combining different B. the companies have entered into a cartel
competitive strategies arrangement.
D. Focusing on creating value for customers rather than C. the companies have pursued distinct strategic
destroying rivals positions.
D. the companies have engaged in direct imitation and
20. If a company wants to gain a competitive advantage in a highly competitive industry,it should substitution.
ideally:
23. Which of the following is an implication of all firms in an industry pursuing a low-costposition
through application of competitive benchmarking?
A. execute an integrated cost-leadership and differentiationposition.
B. copy the strategies of other firms through competitive
benchmarking. A. No firm would face direct competition from others in the industry; hence, profitpotential
C. provide goods or services similar to its competitors' athigher would be high.
prices. B. Each firm would be catering to a different customer
D. stake out a unique position within the segment.
industry. C. The firms would eventually have no resources to invest in product and process
improvements.
21. TakeFlight Airways is a new entrant to the airline industry. While most of its competitors are D. Each firm would be in a better position to gain a competitive
pursuing a cost-leadership strategy, TakeFlight Airways has decidedto execute a differentiation advantage.
strategy. Which of the following is the most likely implication of this decision?
24. Which of the following statements should ideally reflect a firm's strategy for
competitive advantage?
A. TakeFlight Airways will not gain a competitive advantage in theairline
industry.
B. TakeFlight Airways will gain a competitive advantage by reducingits A. Our strategy is to win at any
prices. cost.
C. TakeFlight Airways will face low profit potential by pursuing a B. We will be number one in the
different strategy. industry.
D. TakeFlight Airways will create value for customers by deliveringunique C. Our aim is to create superior customer value while
features. controlling costs.
D. We want to be the market leader by exactly replicating our
competitor's strategy.
evaluation of a firm's external and internal environments?
Frank Rothaermel strategic management Test bank 6th edition
UPDATED 2023 QUESTIONS AND ANSWERS GRADED A+ A. Strategy
analysis
B. Strategy
implementation
C. Strategy
formulation
1. Keeping in mind Apple's competitive advantage, which of the following products was
D. Strategy
introduced by Apple in 2007?
control
5. In , a firm frames a guiding policy to address the competitive challenge.
A. iPa
d
B. iPhon A. strategy
e control
C. iPo B. strategy
d implementation
D. iTune C. strategy
s formulation
D. strategy
2. is best described as an integrative management field that combines analysis,
analysis
formulation, and implementation in the quest for competitive advantage.
6. Through , a firm puts its guiding policy into practice by employing a set of
coherent actions.
A. Supply chain
management
B. Integrated technology A. strategy
management control
C. Strategic B. strategy
management implementation
D. Inventory C. strategy
management formulation
D. strategy
3. is best described as a set of goal-directed actions a firm takes to gain andsustain
analysis
superior performance relative to competitors.
A. Behavior
modification
B. Strateg
y
C. Cred
o
D. Competency
management
,7. A firm that achieves superior performance relative to other firms in the same industryor the 10. If SA Pharmaceuticals obtains an 18 percent return on invested capital, which of thefollowing
industry average has a(n) . will help determine if it has a competitive advantage over other pharmaceutical companies?
A. competitive A. Comparing the return to the return on invested capital obtained by other firmsin the
advantage industry
B. balanced B. Assessing the value based on the shareholders' expectations of return ontheir
scorecard capital
C. power C. Evaluating the liquidity ratios for other pharmaceutical
position companies
D. equity D. Comparing the value to the history of the firm's return of investment over anumber of
leverage years
8. Cadia Foods Inc. was the first company to start selling energy drinks in its country—aproduct 11. Underperformance relative to other firms in the same industry or the industryaverage
that gained popularity among diverse groups. Soon, other companies startedto sell their own results in a(n) for a firm.
brands of energy drinks, thereby giving Cadia Foods ample competition. In response, Cadia
Foods decided to limit its variety of energy drinks to only two. However, it ensured that these
two flavors were free of calories and low in cost. With this innovation, Cadia Foods Inc. A. sustainable competitive
consistently outperformed its competitorsfor ten years. In this scenario, Cadia Foods Inc. has advantage
maintained a through its B. increased power
innovative strategy. distance
C. diseconomies of
scope
A. balanced D. competitive
scorecard disadvantage
B. fiduciary
responsibility 12. New Communications Inc. is a newspaper publishing company whose average returnon
C. consistent power invested capital is approximately 5 percent. Because newspaper publishing is adeclining
position industry, the industry average has been negative (-5 percent) for the last few years. In this
D. sustainable competitive scenario, New Communications Inc. has a .
advantage
9. Which of the following scenarios illustrates a firm that has a sustainable competitive A. competitive
advantage? advantage
B. balanced
scorecard
A. Newon Inc. generated a revenue of $300,000 this financial year, which is close tothe C. competitive
industrial revenue average of $320,000. disadvantage
B. SM Inc. almost doubled its sales to 8500 units this year compared to its previousyear's D. power
sales of 5000 units, though the industry average is 10,000 units. position
C. TrueLink Corp. was able to hold its market share of 68 percent in the social
networking industry for more than three years.
D. Max Electrova Inc. was able to outperform its competitors with its new productionsystem, in
terms of revenue, for a brief period of four months.
,13. Exis Inc. and Stelma Inc. are two companies that have been manufacturing typewriters for 16. FindFor Inc. is an e-commerce retail firm that sells a variety of merchandise online. Through
almost 30 years. Due to the reduced demand for typewriters today, both companies' average services like cash on delivery, easy return, and online tracking, the companyhas created more
return on invested capital is approximately -5 percent. The current industry average is 2 customer value than its competitors (brick-and-mortar businesses) at the same price. Also, the
percent. In this scenario, Exis Inc. and Stelma Inc. mostlikely have: company's costs are substantially low due to minimal investment in operation and
administration. In this scenario, FindFor Inc. has most likely been able to provide superior value
and cost control through .
A. competitive advantage over other firms in their
industry.
B. competitive parity with each A. strategic
other. parity
C. strategic alliance with each B. strategic
other. profiling
D. economies of scope instead of economies of C. strategic
scale. liquidation
D. strategic
14. The average cost of production for a bottle of vitamin water in the industry is $4 while its positioning
average price is $7. StoreAll Inc. manufactures the same product for $3 perbottle and sells it
for $7 per bottle. Which of the following statements is most likely true of StoreAll Inc. in this 17. When a firm adopts a differentiation strategy to attain competitive advantage, itfocuses on:
scenario?
A. delivering unique features to its
A. It has a competitive advantage in the customers.
industry. B. providing the lowest prices to its
B. It has a competitive disadvantage in the customers.
industry. C. maximizing its profits by providing minimal customer
C. It has competitive parity with other firms in the service.
industry. D. lowering costs by employing low-skill
D. It has formed a strategic alliance with other firms in the employees.
industry.
18. True Cinemas Inc. and Digi Future Inc. are two companies that own and run movie theaters in
15. A firm is said to gain a competitive advantage when it can: malls and other commercial areas. While True Cinemas Inc. pursues a cost-leadership
strategy, Digi Future Inc. adopts a differentiation strategy. Which ofthe following statements is
most likely true of this scenario?
A. exceed its own previous
performances.
B. provide products similar to its competitors, but atlower A. True Cinemas will charge a premium price for its customers while Digi Future will
prices. implement everyday low pricing.
C. perform at the same level as that of its B. Digi Future and True Cinemas will not be direct competitors to each other and their customer
competitors. segments will overlap very little.
D. minimize the difference between value creationand C. Digi Future will keep its customer service at an acceptable level while TrueCinemas
cost. will provide superior customer service.
D. True Cinemas and Digi Future will use a similar approach to create value for
customers by attempting to offer everything to everybody.
, 19. For a firm that operates in an industry where competition is high, which of the following 22. Pink Couture Inc. and Pink Blush Inc. are two companies in the apparel industry. WhilePink
practices will result in inferior performance? Couture Inc. focuses on providing unique product features and superior customerservice, Pink
Blush Inc. focuses on low prices and minimal customer service. Both companies have been able
to gain a competitive advantage. This is most likely because:
A. Choosing a distinct but different strategic position inthe
industry
B. Working toward increasing the difference between value A. the companies have executed integrated
creation and cost strategies.
C. Trying to be everything to everybody by combining different B. the companies have entered into a cartel
competitive strategies arrangement.
D. Focusing on creating value for customers rather than C. the companies have pursued distinct strategic
destroying rivals positions.
D. the companies have engaged in direct imitation and
20. If a company wants to gain a competitive advantage in a highly competitive industry,it should substitution.
ideally:
23. Which of the following is an implication of all firms in an industry pursuing a low-costposition
through application of competitive benchmarking?
A. execute an integrated cost-leadership and differentiationposition.
B. copy the strategies of other firms through competitive
benchmarking. A. No firm would face direct competition from others in the industry; hence, profitpotential
C. provide goods or services similar to its competitors' athigher would be high.
prices. B. Each firm would be catering to a different customer
D. stake out a unique position within the segment.
industry. C. The firms would eventually have no resources to invest in product and process
improvements.
21. TakeFlight Airways is a new entrant to the airline industry. While most of its competitors are D. Each firm would be in a better position to gain a competitive
pursuing a cost-leadership strategy, TakeFlight Airways has decidedto execute a differentiation advantage.
strategy. Which of the following is the most likely implication of this decision?
24. Which of the following statements should ideally reflect a firm's strategy for
competitive advantage?
A. TakeFlight Airways will not gain a competitive advantage in theairline
industry.
B. TakeFlight Airways will gain a competitive advantage by reducingits A. Our strategy is to win at any
prices. cost.
C. TakeFlight Airways will face low profit potential by pursuing a B. We will be number one in the
different strategy. industry.
D. TakeFlight Airways will create value for customers by deliveringunique C. Our aim is to create superior customer value while
features. controlling costs.
D. We want to be the market leader by exactly replicating our
competitor's strategy.
