Question 1

Nonmarket strategies serve the objective of superior performance by developing and sustaining the competitive advantage required to take advantage of market opportunities.

Accepted Answer

False

Question 2

The more intense is private politics, the more important is the nonmarket strategy.

Accepted Answer

Private politics refer to the use of non-market strategies such as lobbying, activism, public campaigns, and stakeholder engagement to influence government policies, regulations, and social norms. When private politics are intense, firms need to rely more on nonmarket strategies to protect their interests, gain competitive advantage, and shape the regulatory environment in which they operate. Therefore, the more intense private politics are, the more important it becomes for firms to develop effective nonmarket strategies.

Question 3

The value of a nonmarket capability depends on the effectiveness of a firm's allies in addressing nonmarket issues.

Accepted Answer

Nonmarket issues involve the interaction between a firm and its external environment (such as government regulations, public opinion, social norms, etc.). The effectiveness of a firm's allies (such as interest groups, trade associations, community organizations, etc.) in dealing with these nonmarket issues can influence the value of the nonmarket capabilities that the firm possesses. For example, if a firm has a strong nonmarket capability in lobbying for favorable regulations, but its allies are weak or divided, then the value of this capability may be limited. On the other hand, if a firm has a weaker nonmarket capability but its allies are effective in mobilizing public support or influencing policymakers, then the value of this capability may be enhanced. Therefore, the effectiveness of a firm's allies is an important factor to consider when assessing the value of its nonmarket capabilities.

Question 4

A firm that decides to enter a country that has erected trade barriers requires only a simple market strategy.

Accepted Answer

Entering a country with trade barriers requires a more complex market strategy as the firm needs to navigate around the barriers in order to successfully enter the market.

Question 5

Nonmarket strategies are more important when opportunities are controlled by markets.

Accepted Answer

Nonmarket strategies are more important when opportunities or outcomes are significantly influenced or controlled by public policy, regulatory environments, or societal issues rather than by market mechanisms alone.

Question 6

Positioning in legal space affects not only the liabilities to which a company is exposed but also a company's market and nonmarket strategies.

Accepted Answer

Positioning in the legal space can affect a company's liabilities and also impact its market and nonmarket strategies, such as reputation, brand image, and relationships with stakeholders. Legal issues and compliance can also directly affect a company's bottom line and profitability. Hence, it is important for companies to carefully consider their legal positioning and actively manage their legal risks.

Question 7

Nonmarket strategy is essential because in its absence competitors in the nonmarket environment will influence the outcome of issues and shape the rules of the game to their advantage.

Accepted Answer

Nonmarket strategy involves actions taken outside of a company's traditional market activities, such as influencing government policies and regulations, engaging with civil society groups, and shaping public opinion. If a company does not have a nonmarket strategy, its competitors may have more influence over the outcome of such issues and be able to shape the rules to their advantage. Therefore, it is essential for companies to have a strong nonmarket strategy in order to be effective in shaping the broader business and political environment in which they operate.

Question 8

Issues such as the environment, sustainability, human rights, privacy, health, and safety seldom attract private politics but are the subject of public politics.

Accepted Answer

These issues often attract both private and public politics, as corporations, non-governmental organizations, and individuals engage in private politics to influence corporate behavior, while governments and international bodies may address these issues through public politics.

Question 9

If a firm addresses the nonmarket issue in the legislative stage, the firm has more flexibility and its range of alternatives is wider.

Accepted Answer

The answer of If a firm addresses the nonmarket issue...

Question 10

Positioning in political space affects the opportunity to participate effectively in lawmaking and rule-making processes.

Accepted Answer

The political space or environment in which an individual or group is positioned has a significant impact on their ability to participate effectively in lawmaking and rule-making processes. Those who are well-connected or hold positions of power are more likely to have their voices heard and influence policy outcomes. On the other hand, those who are marginalized or excluded from the political process may have limited opportunities to participate or have their concerns addressed. Thus, positioning in political space plays a crucial role in determining the extent to which individuals and groups can shape the laws and policies that affect their lives.

Question 11

Government exercises relatively little control over pharmaceutical firms and their activities.

Accepted Answer

Governments exercise significant control over pharmaceutical firms through various regulatory agencies and laws, including the FDA in the United States and the EMA in the European Union. These agencies dictate the safety and efficacy standards drugs must meet before being approved for sale, and also monitor post-market safety and manufacturing practices. Additionally, governments often negotiate prices for drugs purchased through public healthcare programs.

Question 12

A firm that decides to enter a country that has open markets relies primarily on a nonmarket strategy.

Accepted Answer

If a country has open markets, then the firm can rely on market strategies such as pricing, distribution, and promotion to compete in the market. Nonmarket strategies such as lobbying, advocacy, and political influence are more relevant when a country has closed or regulated markets.

Question 13

Opportunities can be controlled by actions such as protests, boycotts, and public criticism.

Accepted Answer

Protests, boycotts, and public criticism are all examples of ways that people can take action and voice their opinions to affect change. By making their concerns known publicly, individuals and groups can put pressure on those in power to address issues and create opportunities for positive change.

Question 14

The pharmaceutical companies tend to seek visibility rather than covering their activities through an association or other means.

Accepted Answer

Pharmaceutical companies often use associations and other means to manage their public image and influence policy, rather than seeking direct visibility.

Question 15

When a firm chooses a market strategy and a nonmarket strategy, the strategies compete with the strategies of other participants in the market.

Accepted Answer

The market and nonmarket strategies of a firm are designed to compete with the strategies of other market participants.

Question 16

Opportunities can be controlled by government at one extreme and markets at the other extreme.

Accepted Answer

Governments can regulate and create opportunities through policies and investments, while markets can create opportunities through competition and innovation.

Question 17

Expertise in dealing with the news media is a market asset.

Accepted Answer

The answer of Expertise in dealing with the news media...

Question 18

A synergy is present between market and nonmarket strategies if a nonmarket action increases the return from a market action.

Accepted Answer

A synergy between market and nonmarket strategies occurs when a nonmarket action, such as lobbying for favorable regulations, enhances the return from a market action like launching a new product. Therefore, the statement is true.

Question 19

A business strategy serves as a firm's navigational guide in its market and nonmarket environments.

Accepted Answer

A business strategy helps a firm to navigate through both market and nonmarket environments by providing a clear direction and decision-making framework. It considers factors such as customer needs, competition, industry trends, and regulatory issues to help the firm achieve its goals and objectives.

Question 20

Nonmarket positioning should be a conscious choice rather than dictated by a firm's market positioning or by those in its environment.

Accepted Answer

Nonmarket positioning, which involves a company's positioning on issues outside of its traditional market, should be a deliberate choice based on the company's values and principles rather than simply being influenced by its market positioning or external factors.

Quiz 2: Integrated Strategy