Because acquisitions may become a substitute for innovation, Teva Pharmaceutical's acquisition of Cephalon should be driven by ___________ rather than _________________.
A) defensive reasons (to gain sales revenue in the short run); strategic reasons (cost and revenue strategies)
B) both strategic and defensive reasons; either one or the other
C) strategic reasons; defensive reasons
D) avoiding internal R&D expenditures; developing innovation capabilities

Question

Quizplus · Accepted Answer

The statement suggests that acquisitions can become a substitute for innovation, implying that they may not necessarily promote innovation. Therefore, it would be best for Teva Pharmaceutical to drive its acquisition of Cephalon with strategic reasons rather than defensive reasons, which focus on gaining sales revenue in the short run. Strategic reasons would likely include long-term planning for growth and development, which could lead to innovation capabilities. Defensive reasons, on the other hand, may not necessarily lead to an increased focus on innovation. Option B is not specific enough, while options A and D are both partially true but not the best answer.

Because Acquisitions May Become a Substitute for Innovation, Teva Pharmaceutical's