Test Bank For Strategic Management 6th edition By Rothaermel Frank, ISBN 9781265954574 | Complete Chapter 1-12

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) Most consumers and investors today want the firms they do business with to look beyond just the profit motive. In fact, they want firms that behave legally and ethically while also giving back to their communities via philanthropic activities. The framework that attempts to reconcile these wants is known as A) corporate social responsibility. B) stakeholder impact analysis. C) business model analysis. D) value chain driven decision making. 18) Which of the following terms describes the guiding policy to address the competitive challenge, and uses corporate- and business-level strategy? A) analysis B) formulation C) implementation D) competitive advantage 19) In strategic management, strategists engage in three pillars. These three pillars include the________ of major goals and objectives. A) implementation B) presentation C) objectification D) unification 20) Which of the following tasks in the AFI strategy framework involves evaluating the internal and external environments in which a firm operates? A) analysis B) formulation C) implementation D) competitive advantage 21) The goal of a good strategy is focused primarily on A) creating superior value while containing costs. B) making as much money as possible. C) employing lean manufacturing and Six Sigma. D) encouraging investors to buy more shares of the firm. 22) For a corporate strategy, which question is often asked? A) How do strategic leaders help shape a firm’s vision, mission, and values? B) How should the firm compete: cost leadership, differentiation, or value innovation? C) How do we create shared value? D) Where should the firm compete in terms of industry, markets, and geography? 23) A successful strategy details a set of goal-directed actions that managers make to gain and sustain a competitive advantage; in order to create this strategy, managers must focus on three pillars. Which of the following below is not one of these pillars? A) formulation B) execution C) implementation D) analysis 24) The________ effect involves studying and copying the competition, which results in unsuccessful efforts to gain a competitive advantage. A) Mad Hatter B) Black Swan C) Red Queen D) Wizard of Oz 25) Lawrence decided to copy the competition to gain a competitive advantage for his company. After a year, he realized his company failed to gain such an advantage. Lawrence most likely failed because of the________ effect. A) Green Pawn B) grandiose C) globalization D) Red Queen 26) Hewlett-Packard was not able to address the competitive challenges of cloud and mobile computing. The company therefore destroyed shareholder value by failing to create A) a strong infrastructure. B) value for society. C) a need for printers. D) foreign contacts. 27) Sean, a retired CEO, invests capital in a start-up company that creates budgeting software. He mentors the entrepreneur and the employees of the company because he wants the company to perform well and survive in the market. Thus, Sean is the start-up company’s A) headhunter. B) category captain. C) employee. D) stakeholder. 28) Green and Good Inc., a multinational company, relies on its media partner OmniSignal to regularly advertise its offers, sales, and new products. OmniSignal is invested in this relationship because it generates most of its revenue from advertising Green and Good’s products. In this scenario, OmniSignal is Green and Good Inc.’s A) stockholder. B) workforce. C) internal stakeholder. D) external stakeholder. 29) Louise owns a large portion of Sturdy Appliance’s stock. However, she is not employed by the company. In this scenario, Louise is the company’s A) external stakeholder. B) internal stakeholder. C) creditor. D) customer. 30) Contour Inc., a vendor, regularly supplies capacitors to All Purpose Electronics for use in its products. Therefore, Contour Inc. is All Purpose Electronics’ A) internal stakeholder. B) director. C) shareholder. D) external stakeholder. 31) Which of the following best qualifies as a firm’s internal stakeholder? A) an auditor assigned to the firm by a federal government agency B) a labor union with whom the firm’s employees can affiliate C) a manager taking care of the firm’s operations in a foreign market D) a competitor manufacturing the same products as that of the firm 32) The best example of a firm’s external stakeholder is a(n) A) government agency that regulates the prices of products manufactured by the firm. B) board member from a wholly-owned foreign subsidiary of the firm. C) shareholder who has invested money in the firm but is not employed by the firm. D) employee of the firm who is responsible for a contract project. 33) The interaction between a firm and its diverse internal and external stakeholders is best described as a(n) A) ergonomic relationship. B) cartel arrangement. C) exchange relationship. D) fiduciary responsibility. 34) Dimitre Corp. has been able to gain and sustain a competitive advantage due to its strong relationship with its employees, customers, suppliers, and local communities. The company believes in lifetime employment and ensures that its employees grow along with the company. Investors are more than satisfied with the returns on their investments. Also, 3 percent of the company’s profit is spent on community development. With initiatives like these, customers feel privileged to associate themselves with Dimitre products. This scenario best illustrates the implementation of a A) strategic analysis. B) stakeholder strategy. C) wild card event. D) black swan event