TEST BANK FOR f f
Strategic Management 6th Edition Rothaermel Frank
f f f f f
ISBN 9781265954574
f
Chapter 1-12 Answers are at the End of Each Chapter
f f f f f f f f f
Chapter 1 f
Student name: f
1) A good strategy allows a firm to achieve superior performance and sustainable competitive
f f f f f f f f f f f f
fadvantage without regard to the external environment.
f f f f f f
⊚ true f
⊚ false f
2) The following statement by the chief executive of MegaFilms movie studio should not be
f f f f f f f f f f f f f
fused as a strategy: “We will produce the greatest films of the 21st century.”
f f f f f f f f f f f f f
⊚ true f
⊚ false f
3) The three tasks of the AFI strategy framework are to Assemble a prototype, Find a buyer, and
f f f f f f f f f f f f f f f f
f Incorporate feedback. f
⊚ true f
⊚ false f
4) Questions asked during the strategy analysis stage of the AFI framework should include
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f“What effects do forces in the external environment have on the firm’s potential to gain and
f f f f f f f f f f f f f f f
fsustain a competitive advantage?”
f f f
⊚ true f
⊚ false f
,5) Once a strategy has been formulated and implemented, it is important that the firm sticks to it no
f f f f f f f f f f f f f f f f f
fmatter what happens. f f
⊚ true f
⊚ false f
6) Because they are a crucial component of a firm’s success, customers are considered internal
f f f f f f f f f f f f f
fstakeholders.
⊚ true f
⊚ false f
7) A firm is required by society and its shareholders to meet its ethical and philanthropic
f f f f f f f f f f f f f f
f responsibilities.
⊚ true f
⊚ false f
8) Stakeholder impact analysis provides a decision tool that helps strategic leaders recognize the
f f f f f f f f f f f f
fneeds of different stakeholders.
f f f
⊚ true f
⊚ false f
9) Juan wants to open his own hot dog restaurant but doesn’t know anything about business. He
f f f f f f f f f f f f f f f
fneeds help determining who his competition is, how he should craft his strategy to compete
f f f f f f f f f f f f f f
fand how he’ll implement his strategy to achieve a competitive advantage. He’s hired you to
f f f f f f f f f f f f f f
fhelp him get started. As a result, you will probably use which of the following?
f f f f f f f f f f f f f f
A) AFI strategy framework f f
B) Red Queen effect f f
C) competitive benchmarking f
D) Stakeholder Impact analysis f f
,10) Roberta is interested in the concept of strategy and decides to create her own. As a result,
f f f f f f f f f f f f f f f f
Roberta says that her strategy is to focus on competitive benchmarking to achieve
f f f f f f f f f f f f f
competitive advantage. Which is the best evaluation of Roberta’s statement?
f f f f f f f f f f
A) Roberta’s strategy is clear, but she should provide more detail. f f f f f f f f f
B) Roberta’s strategy reveals a clear strategic position and tradeoff, so she should
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proceed. f
C) Roberta should reevaluate her statement because it fails to mention more than one
f f f f f f f f f f f f
strategy. f
D) Roberta should reevaluate her statement because it fails to meet the principles of what a
f f f f f f f f f f f f f f
strategy should be.
f f f
11) Tony’s Pizza Shop is able to net $10,000 a week; this makes the shop profitable. Its number
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one competitor, Leo’s Pies, is also profitable, netting $12,000 a week. Lil Anthony’s Pizza
f f f f f f f f f f f f f f
Palace nets $13,000 a week. Since Tony’s Pizza Shop is profitable, we can conclude that it
f f f f f f f f f f f f f f f f
has a competitive advantage in its industry.
f f f f f f f
A) True—competitive advantage is achieved through profitability alone. f f f f f f
B) True—competitive advantage is achieved since Tony has a positive net income. f f f f f f f f f f
C) False—competitive advantage is only achieved by generating above average returns, f f f f f f f f f
relative to competition.
f f f
D) False—Tony more than likely has a sustained competitive advantage since he’s been in f f f f f f f f f f f f
business longer.f f
12) Bill’s Auto & Airplane Repair shop is able to generate a positive net income of $10,000 a
f f f f f f f f f f f f f f f f
week, which is about the same as the income of a close competitor. As a result, we can
f f f f f f f f f f f f f f f f f f
conclude that the two businesses also have a competitive parity in the industry.
f f f f f f f f f f f f f
A) Correct—competitive advantage is achieved through profitability alone. f f f f f f
B) Correct—competitive advantage is achieved since Bill’s Auto & Airplane Repair shop f f f f f f f f f f
has a positive net income.
f f f f f
C) Correct—competitive parity is a performance of two or more firms at the same level. f f f f f f f f f f f f f
D) Incorrect—Bill’s Auto & Airplane Repair shop more than likely has a sustained f f f f f f f f f f f
competitive advantage because the business is diversified.
f f f f f f f
, 13) To better achieve a competitive advantage, firms must now adopt a holistic approach towards
f f f f f f f f f f f f f
fsatisfying multiple stakeholders opposed to focusing on the needs of their shareholders. What
f f f f f f f f f f f f
fterm is used for this approach?
f f f f f
A) stakeholder strategy f
B) internal shareholder strategy f f
C) value creation strategy f f
D) shareholder relationship strategy f f
14) All of the following are external stakeholders except which of the following?
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A) customers
B) creditors
C) alliance partners f
D) competitors
15) John is a bit confused about the difference between stakeholders and stockholders. You meet
f f f f f f f f f f f f f
fwith John and inform him that the main difference is that
f f f f f f f f f f
A) stakeholders are both internal and external to the firm while stockholders are f f f f f f f f f f f
considered external to the firm.
f f f f f
B) stakeholders are considered internal to the firm while stockholders are external to the f f f f f f f f f f f f
firm. f
C) stakeholders can be both internal and external while stockholders own shares of a f f f f f f f f f f f f
firm and are classified as internal to the firm.
f f f f f f f f f
D) stakeholders are external to the firm while stockholders are considered internal to the f f f f f f f f f f f f
firm. f
16) Which of the following three important stakeholder attributes should managers pay special
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fclose attention to in order to better understand stakeholder impact analysis?
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A) competitive advantage, economic value, and time f f f f f
B) power, legitimacy, and urgency f f f
C) grace under pressure, financial control, and reward power
f f f f f f f
D) shareholder rights plan, board representation and CEO influence f f f f f f f
Strategic Management 6th Edition Rothaermel Frank
f f f f f
ISBN 9781265954574
f
Chapter 1-12 Answers are at the End of Each Chapter
f f f f f f f f f
Chapter 1 f
Student name: f
1) A good strategy allows a firm to achieve superior performance and sustainable competitive
f f f f f f f f f f f f
fadvantage without regard to the external environment.
f f f f f f
⊚ true f
⊚ false f
2) The following statement by the chief executive of MegaFilms movie studio should not be
f f f f f f f f f f f f f
fused as a strategy: “We will produce the greatest films of the 21st century.”
f f f f f f f f f f f f f
⊚ true f
⊚ false f
3) The three tasks of the AFI strategy framework are to Assemble a prototype, Find a buyer, and
f f f f f f f f f f f f f f f f
f Incorporate feedback. f
⊚ true f
⊚ false f
4) Questions asked during the strategy analysis stage of the AFI framework should include
f f f f f f f f f f f f
f“What effects do forces in the external environment have on the firm’s potential to gain and
f f f f f f f f f f f f f f f
fsustain a competitive advantage?”
f f f
⊚ true f
⊚ false f
,5) Once a strategy has been formulated and implemented, it is important that the firm sticks to it no
f f f f f f f f f f f f f f f f f
fmatter what happens. f f
⊚ true f
⊚ false f
6) Because they are a crucial component of a firm’s success, customers are considered internal
f f f f f f f f f f f f f
fstakeholders.
⊚ true f
⊚ false f
7) A firm is required by society and its shareholders to meet its ethical and philanthropic
f f f f f f f f f f f f f f
f responsibilities.
⊚ true f
⊚ false f
8) Stakeholder impact analysis provides a decision tool that helps strategic leaders recognize the
f f f f f f f f f f f f
fneeds of different stakeholders.
f f f
⊚ true f
⊚ false f
9) Juan wants to open his own hot dog restaurant but doesn’t know anything about business. He
f f f f f f f f f f f f f f f
fneeds help determining who his competition is, how he should craft his strategy to compete
f f f f f f f f f f f f f f
fand how he’ll implement his strategy to achieve a competitive advantage. He’s hired you to
f f f f f f f f f f f f f f
fhelp him get started. As a result, you will probably use which of the following?
f f f f f f f f f f f f f f
A) AFI strategy framework f f
B) Red Queen effect f f
C) competitive benchmarking f
D) Stakeholder Impact analysis f f
,10) Roberta is interested in the concept of strategy and decides to create her own. As a result,
f f f f f f f f f f f f f f f f
Roberta says that her strategy is to focus on competitive benchmarking to achieve
f f f f f f f f f f f f f
competitive advantage. Which is the best evaluation of Roberta’s statement?
f f f f f f f f f f
A) Roberta’s strategy is clear, but she should provide more detail. f f f f f f f f f
B) Roberta’s strategy reveals a clear strategic position and tradeoff, so she should
f f f f f f f f f f f
proceed. f
C) Roberta should reevaluate her statement because it fails to mention more than one
f f f f f f f f f f f f
strategy. f
D) Roberta should reevaluate her statement because it fails to meet the principles of what a
f f f f f f f f f f f f f f
strategy should be.
f f f
11) Tony’s Pizza Shop is able to net $10,000 a week; this makes the shop profitable. Its number
f f f f f f f f f f f f f f f f
one competitor, Leo’s Pies, is also profitable, netting $12,000 a week. Lil Anthony’s Pizza
f f f f f f f f f f f f f f
Palace nets $13,000 a week. Since Tony’s Pizza Shop is profitable, we can conclude that it
f f f f f f f f f f f f f f f f
has a competitive advantage in its industry.
f f f f f f f
A) True—competitive advantage is achieved through profitability alone. f f f f f f
B) True—competitive advantage is achieved since Tony has a positive net income. f f f f f f f f f f
C) False—competitive advantage is only achieved by generating above average returns, f f f f f f f f f
relative to competition.
f f f
D) False—Tony more than likely has a sustained competitive advantage since he’s been in f f f f f f f f f f f f
business longer.f f
12) Bill’s Auto & Airplane Repair shop is able to generate a positive net income of $10,000 a
f f f f f f f f f f f f f f f f
week, which is about the same as the income of a close competitor. As a result, we can
f f f f f f f f f f f f f f f f f f
conclude that the two businesses also have a competitive parity in the industry.
f f f f f f f f f f f f f
A) Correct—competitive advantage is achieved through profitability alone. f f f f f f
B) Correct—competitive advantage is achieved since Bill’s Auto & Airplane Repair shop f f f f f f f f f f
has a positive net income.
f f f f f
C) Correct—competitive parity is a performance of two or more firms at the same level. f f f f f f f f f f f f f
D) Incorrect—Bill’s Auto & Airplane Repair shop more than likely has a sustained f f f f f f f f f f f
competitive advantage because the business is diversified.
f f f f f f f
, 13) To better achieve a competitive advantage, firms must now adopt a holistic approach towards
f f f f f f f f f f f f f
fsatisfying multiple stakeholders opposed to focusing on the needs of their shareholders. What
f f f f f f f f f f f f
fterm is used for this approach?
f f f f f
A) stakeholder strategy f
B) internal shareholder strategy f f
C) value creation strategy f f
D) shareholder relationship strategy f f
14) All of the following are external stakeholders except which of the following?
f f f f f f f f f f f
A) customers
B) creditors
C) alliance partners f
D) competitors
15) John is a bit confused about the difference between stakeholders and stockholders. You meet
f f f f f f f f f f f f f
fwith John and inform him that the main difference is that
f f f f f f f f f f
A) stakeholders are both internal and external to the firm while stockholders are f f f f f f f f f f f
considered external to the firm.
f f f f f
B) stakeholders are considered internal to the firm while stockholders are external to the f f f f f f f f f f f f
firm. f
C) stakeholders can be both internal and external while stockholders own shares of a f f f f f f f f f f f f
firm and are classified as internal to the firm.
f f f f f f f f f
D) stakeholders are external to the firm while stockholders are considered internal to the f f f f f f f f f f f f
firm. f
16) Which of the following three important stakeholder attributes should managers pay special
f f f f f f f f f f f
fclose attention to in order to better understand stakeholder impact analysis?
f f f f f f f f f f
A) competitive advantage, economic value, and time f f f f f
B) power, legitimacy, and urgency f f f
C) grace under pressure, financial control, and reward power
f f f f f f f
D) shareholder rights plan, board representation and CEO influence f f f f f f f
