TEST BANK FOR . d . d
StrategicManagement6thEditionRothaermelFrank .d .d .d .d .d
ISBN 9781265954574 .d
Chapter1-12 Answers areat the End of Each Chapter
.d . d .d .d .d .d .d .d .d
Chapter1 .d
Studentname: .d
1) A good strategyallows a firm to achievesuperior performance and sustainable competitive
.d .d .d .d .d .d .d .d .d .d .d .d
.d advantage without regard to the external environment. .d .d .d .d .d .d
⊚ true . d
⊚ false . d
2) Thefollowingstatement bythe chief executive of MegaFilms movie studio should not be used
.d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d as a strategy: “We will produce the greatest films of the 21st century.”
.d .d .d .d .d .d .d .d .d .d .d .d
⊚ true . d
⊚ false . d
3) Thethree tasks of the AFIstrategyframework are to Assemble a prototype, Find a buyer, and
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d Incorporate feedback. .d
⊚ true . d
⊚ false . d
4) Questions asked during the strategy analysis stage of the AFI framework should include “What
.d .d .d .d .d .d .d .d .d .d .d .d .d
effects do forces in the external environment haveon the firm’s potential to gain and sustain a
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
competitive advantage?”
.d .d
⊚ true . d
⊚ false . d
,5) Once astrategyhas been formulated and implemented, it is important that thefirm sticks to it no
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d matter what happens. .d .d
⊚ true . d
⊚ false . d
6) Because theyare acrucial component of afirm’s success, customers areconsidered internal
.d .d .d .d .d .d .d .d .d .d .d .d .d
.d stakeholders.
⊚ true . d
⊚ false . d
7) A firm is required bysocietyand its shareholders to meet its ethical and philanthropic
.d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d responsibilities.
⊚ true . d
⊚ false . d
8) Stakeholderimpact analysisprovides adecision tool that helps strategic leaders recognize the needs
.d .d .d .d .d .d .d .d .d .d .d .d .d
.d of different stakeholders.
.d .d
⊚ true . d
⊚ false . d
9) Juan wants to open his own hot dogrestaurant but doesn’t know anything about business. He needs
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d help determining who his competition is, how he should craft his strategy to compete and how he’ll
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d implement his strategy to achieve a competitive advantage. He’s hired you to help him get started.
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d As a result, you will probably use which of the following?
.d .d .d .d .d .d .d .d .d .d
A) AFI strategy framework .d .d
B) Red Queen effect .d .d
C) competitive benchmarking .d
D) Stakeholder Impact analysis .d .d
,10) Robertais interested in the concept of strategyand decides to create her own. As a result,
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d Roberta says that her strategy is to focus on competitive benchmarking to achieve competitive
.d .d .d .d .d .d .d .d .d .d .d .d .d
.d advantage. Which is the best evaluation of Roberta’s statement?
.d .d .d .d .d .d .d .d
A) Roberta’s strategyis clear, but she should provide more detail. .d .d .d .d .d .d .d .d .d
B) Roberta’s strategyreveals aclear strategic position andtradeoff, so sheshould .d .d .d .d .d .d .d .d .d .d .d
proceed. .d
C) Robertashould reevaluate her statement because it fails to mention morethan one .d .d .d .d .d .d .d .d .d .d .d .d
strategy. .d
D) Robertashould reevaluate her statement because it fails to meet theprinciples of what a .d .d .d .d .d .d .d .d .d .d .d .d .d .d
strategy should be. .d .d .d
11) Tony’s PizzaShop is ableto net $10,000 aweek; this makes the shop profitable. Its number one
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d competitor, Leo’s Pies, is also profitable, netting $12,000 a week. Lil Anthony’s Pizza Palace
.d .d .d .d .d .d .d .d .d .d .d .d .d
.d nets $13,000 a week. Since Tony’s Pizza Shop is profitable, we can conclude that it has a
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d competitive advantage in its industry. .d .d .d .d
A) True—competitive advantage is achieved through profitabilityalone. .d .d .d .d .d .d
B) True—competitive advantage is achieved since Tonyhas a positive net income. .d .d .d .d .d .d .d .d .d .d
C) False—competitive advantageis onlyachieved bygeneratingaboveaveragereturns, .d .d .d .d .d .d .d .d .d
relative to competition. .d .d .d
D) False—Tonymorethan likelyhas a sustained competitive advantagesince he’s been in .d .d .d .d .d .d .d .d .d .d .d .d
business longer. .d .d
12) Bill’s Auto &Airplane Repair shop is able to generate apositivenet incomeof $10,000 a week,
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d which is about the same as the income of a close competitor. As a result, we can conclude that
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d the two businesses also have a competitive parity in the industry.
.d .d .d .d .d .d .d .d .d .d
A) Correct—competitive advantage is achieved through profitabilityalone. .d .d .d .d .d .d
B) Correct—competitiveadvantageis achieved since Bill’sAuto &Airplane Repair shop has a .d .d .d .d .d .d .d .d .d .d .d .d
positive net income. .d .d .d
C) Correct—competitive parityis a performance of two or more firms at the same level. .d .d .d .d .d .d .d .d .d .d .d .d .d
D) Incorrect—Bill’s Auto & AirplaneRepair shop morethan likelyhas a sustained .d .d .d .d .d .d .d .d .d .d .d
competitive advantage because the business is diversified.
.d .d .d .d .d .d .d
, 13) To better achieve a competitive advantage, firms must now adopt a holistic approach towards
.d .d .d .d .d .d .d .d .d .d .d .d .d
.d satisfying multiple stakeholders opposed to focusing on the needs of their shareholders. What term
.d .d .d .d .d .d .d .d .d .d .d .d .d
.d is used for this approach?
.d .d .d .d
A) stakeholderstrategy .d
B) internal shareholder strategy .d .d
C) value creation strategy .d .d
D) shareholder relationship strategy .d .d
14) All of the following are external stakeholders except which of the following?
.d .d .d .d .d .d .d .d .d .d .d
A) customers
B) creditors
C) alliancepartners .d
D) competitors
15) John is abit confused about the differencebetween stakeholders and stockholders. You meet with
.d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d John and inform him that the main difference is that
.d .d .d .d .d .d .d .d .d
A) stakeholders areboth internal and external to the firm whilestockholders are .d .d .d .d .d .d .d .d .d .d .d
considered external to the firm.
.d .d .d .d .d
B) stakeholders areconsidered internal to the firm whilestockholders are external to the firm. .d .d .d .d .d .d .d .d .d .d .d .d .d
C) stakeholders can beboth internal and external while stockholders own shares of a firm .d .d .d .d .d .d .d .d .d .d .d .d .d
and are classified as internal to the firm.
.d .d .d .d .d .d .d .d
D) stakeholders areexternal tothefirm whilestockholders are considered internal tothe firm. .d .d .d .d .d .d .d .d .d .d .d .d .d
16) Which ofthe followingthreeimportant stakeholder attributes should managers payspecial close
.d .d .d .d .d .d .d .d .d .d .d .d
.d attention to in order to better understand stakeholder impact analysis?
.d .d .d .d .d .d .d .d .d
A) competitive advantage, economic value, and time .d .d .d .d .d
B) power, legitimacy, and urgency .d .d .d
C) grace under pressure, financial control, and reward power .d .d .d .d .d .d .d
D) shareholder rights plan, board representation and CEO influence .d .d .d .d .d .d .d
StrategicManagement6thEditionRothaermelFrank .d .d .d .d .d
ISBN 9781265954574 .d
Chapter1-12 Answers areat the End of Each Chapter
.d . d .d .d .d .d .d .d .d
Chapter1 .d
Studentname: .d
1) A good strategyallows a firm to achievesuperior performance and sustainable competitive
.d .d .d .d .d .d .d .d .d .d .d .d
.d advantage without regard to the external environment. .d .d .d .d .d .d
⊚ true . d
⊚ false . d
2) Thefollowingstatement bythe chief executive of MegaFilms movie studio should not be used
.d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d as a strategy: “We will produce the greatest films of the 21st century.”
.d .d .d .d .d .d .d .d .d .d .d .d
⊚ true . d
⊚ false . d
3) Thethree tasks of the AFIstrategyframework are to Assemble a prototype, Find a buyer, and
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d Incorporate feedback. .d
⊚ true . d
⊚ false . d
4) Questions asked during the strategy analysis stage of the AFI framework should include “What
.d .d .d .d .d .d .d .d .d .d .d .d .d
effects do forces in the external environment haveon the firm’s potential to gain and sustain a
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
competitive advantage?”
.d .d
⊚ true . d
⊚ false . d
,5) Once astrategyhas been formulated and implemented, it is important that thefirm sticks to it no
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d matter what happens. .d .d
⊚ true . d
⊚ false . d
6) Because theyare acrucial component of afirm’s success, customers areconsidered internal
.d .d .d .d .d .d .d .d .d .d .d .d .d
.d stakeholders.
⊚ true . d
⊚ false . d
7) A firm is required bysocietyand its shareholders to meet its ethical and philanthropic
.d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d responsibilities.
⊚ true . d
⊚ false . d
8) Stakeholderimpact analysisprovides adecision tool that helps strategic leaders recognize the needs
.d .d .d .d .d .d .d .d .d .d .d .d .d
.d of different stakeholders.
.d .d
⊚ true . d
⊚ false . d
9) Juan wants to open his own hot dogrestaurant but doesn’t know anything about business. He needs
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d help determining who his competition is, how he should craft his strategy to compete and how he’ll
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d implement his strategy to achieve a competitive advantage. He’s hired you to help him get started.
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d As a result, you will probably use which of the following?
.d .d .d .d .d .d .d .d .d .d
A) AFI strategy framework .d .d
B) Red Queen effect .d .d
C) competitive benchmarking .d
D) Stakeholder Impact analysis .d .d
,10) Robertais interested in the concept of strategyand decides to create her own. As a result,
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d Roberta says that her strategy is to focus on competitive benchmarking to achieve competitive
.d .d .d .d .d .d .d .d .d .d .d .d .d
.d advantage. Which is the best evaluation of Roberta’s statement?
.d .d .d .d .d .d .d .d
A) Roberta’s strategyis clear, but she should provide more detail. .d .d .d .d .d .d .d .d .d
B) Roberta’s strategyreveals aclear strategic position andtradeoff, so sheshould .d .d .d .d .d .d .d .d .d .d .d
proceed. .d
C) Robertashould reevaluate her statement because it fails to mention morethan one .d .d .d .d .d .d .d .d .d .d .d .d
strategy. .d
D) Robertashould reevaluate her statement because it fails to meet theprinciples of what a .d .d .d .d .d .d .d .d .d .d .d .d .d .d
strategy should be. .d .d .d
11) Tony’s PizzaShop is ableto net $10,000 aweek; this makes the shop profitable. Its number one
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d competitor, Leo’s Pies, is also profitable, netting $12,000 a week. Lil Anthony’s Pizza Palace
.d .d .d .d .d .d .d .d .d .d .d .d .d
.d nets $13,000 a week. Since Tony’s Pizza Shop is profitable, we can conclude that it has a
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d competitive advantage in its industry. .d .d .d .d
A) True—competitive advantage is achieved through profitabilityalone. .d .d .d .d .d .d
B) True—competitive advantage is achieved since Tonyhas a positive net income. .d .d .d .d .d .d .d .d .d .d
C) False—competitive advantageis onlyachieved bygeneratingaboveaveragereturns, .d .d .d .d .d .d .d .d .d
relative to competition. .d .d .d
D) False—Tonymorethan likelyhas a sustained competitive advantagesince he’s been in .d .d .d .d .d .d .d .d .d .d .d .d
business longer. .d .d
12) Bill’s Auto &Airplane Repair shop is able to generate apositivenet incomeof $10,000 a week,
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d which is about the same as the income of a close competitor. As a result, we can conclude that
.d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d the two businesses also have a competitive parity in the industry.
.d .d .d .d .d .d .d .d .d .d
A) Correct—competitive advantage is achieved through profitabilityalone. .d .d .d .d .d .d
B) Correct—competitiveadvantageis achieved since Bill’sAuto &Airplane Repair shop has a .d .d .d .d .d .d .d .d .d .d .d .d
positive net income. .d .d .d
C) Correct—competitive parityis a performance of two or more firms at the same level. .d .d .d .d .d .d .d .d .d .d .d .d .d
D) Incorrect—Bill’s Auto & AirplaneRepair shop morethan likelyhas a sustained .d .d .d .d .d .d .d .d .d .d .d
competitive advantage because the business is diversified.
.d .d .d .d .d .d .d
, 13) To better achieve a competitive advantage, firms must now adopt a holistic approach towards
.d .d .d .d .d .d .d .d .d .d .d .d .d
.d satisfying multiple stakeholders opposed to focusing on the needs of their shareholders. What term
.d .d .d .d .d .d .d .d .d .d .d .d .d
.d is used for this approach?
.d .d .d .d
A) stakeholderstrategy .d
B) internal shareholder strategy .d .d
C) value creation strategy .d .d
D) shareholder relationship strategy .d .d
14) All of the following are external stakeholders except which of the following?
.d .d .d .d .d .d .d .d .d .d .d
A) customers
B) creditors
C) alliancepartners .d
D) competitors
15) John is abit confused about the differencebetween stakeholders and stockholders. You meet with
.d .d .d .d .d .d .d .d .d .d .d .d .d .d
.d John and inform him that the main difference is that
.d .d .d .d .d .d .d .d .d
A) stakeholders areboth internal and external to the firm whilestockholders are .d .d .d .d .d .d .d .d .d .d .d
considered external to the firm.
.d .d .d .d .d
B) stakeholders areconsidered internal to the firm whilestockholders are external to the firm. .d .d .d .d .d .d .d .d .d .d .d .d .d
C) stakeholders can beboth internal and external while stockholders own shares of a firm .d .d .d .d .d .d .d .d .d .d .d .d .d
and are classified as internal to the firm.
.d .d .d .d .d .d .d .d
D) stakeholders areexternal tothefirm whilestockholders are considered internal tothe firm. .d .d .d .d .d .d .d .d .d .d .d .d .d
16) Which ofthe followingthreeimportant stakeholder attributes should managers payspecial close
.d .d .d .d .d .d .d .d .d .d .d .d
.d attention to in order to better understand stakeholder impact analysis?
.d .d .d .d .d .d .d .d .d
A) competitive advantage, economic value, and time .d .d .d .d .d
B) power, legitimacy, and urgency .d .d .d
C) grace under pressure, financial control, and reward power .d .d .d .d .d .d .d
D) shareholder rights plan, board representation and CEO influence .d .d .d .d .d .d .d
