Growth Strategies & Networking MCQs With Answer

Growth Strategies & Networking MCQs With Answer is designed for M.Pharm students preparing for MIP 204T – Entrepreneurship Management. This concise quiz set focuses on practical and strategic concepts important for pharmaceutical entrepreneurs and managers, including organic and inorganic growth, alliances, licensing, mergers, supply‑chain partnerships, and the role of professional networks in product development and commercialization. Questions emphasize industry‑specific examples such as CRO partnerships, technology transfer, patent licensing, incubators, and venture financing. Use these MCQs to deepen your understanding of strategic choices, risk‑return tradeoffs, and networking mechanisms that enable sustainable growth in pharma businesses and research ventures.

Q1. Which growth strategy involves increasing sales of existing products in existing markets, often through improved marketing or pricing?

• Market penetration
• Product development
• Diversification
• Vertical integration

Correct Answer: Market penetration

Q2. In the Ansoff Matrix, which strategy is characterized by introducing new products into new markets and carries the highest risk?

• Market penetration
• Market development
• Product development
• Diversification

Correct Answer: Diversification

Q3. Horizontal integration in the pharmaceutical industry typically means:

• Acquiring a supplier of APIs to secure raw materials
• Merging with or acquiring a competing company producing similar drugs
• Entering a completely unrelated business such as food processing
• Setting up a distribution center to control logistics

Correct Answer: Merging with or acquiring a competing company producing similar drugs

Q4. Which of the following is an example of inorganic growth for a pharma company?

• Expanding sales team to increase prescriptions
• Investing in R&D to create a new molecule
• Acquiring a biotech startup with a promising license
• Improving manufacturing yields through process optimization

Correct Answer: Acquiring a biotech startup with a promising license

Q5. What is a strategic alliance in the context of pharmaceutical business development?

• A short-term loan from a bank to fund trials
• A non‑equity partnership where firms collaborate on defined activities while remaining independent
• A hostile takeover of a competitor
• An internal R&D project led by a single company

Correct Answer: A non‑equity partnership where firms collaborate on defined activities while remaining independent

Q6. Which networking concept emphasizes the importance of weak ties for accessing novel information and opportunities?

• Strong tie theory
• Structural holes
• Granovetter’s weak tie theory
• Network density theory

Correct Answer: Granovetter’s weak tie theory

Q7. In pharma licensing, “out‑licensing” commonly refers to:

• A company obtaining rights from another to develop a drug in its region
• A company granting rights to another to develop, manufacture, or commercialize its asset
• Loaning manufacturing equipment to a partner
• Hiring external sales representatives under contract

Correct Answer: A company granting rights to another to develop, manufacture, or commercialize its asset

Q8. Which growth strategy focuses on expanding operations across different stages of the same supply chain?

• Horizontal integration
• Backward or forward vertical integration
• Market diversification
• Product specialization

Correct Answer: Backward or forward vertical integration

Q9. What is a primary benefit of participating in biotech or pharma clusters and incubators?

• Guaranteed regulatory approval for new drugs
• Immediate access to large manufacturing capacity
• Enhanced knowledge sharing, mentoring, and access to investors
• Exemption from patent regulations

Correct Answer: Enhanced knowledge sharing, mentoring, and access to investors

Q10. When evaluating a merger or acquisition target in pharma, what is a key due diligence focus unique to the industry?

• Office lease terms and parking availability
• Key clinical data, regulatory status, and IP freedom-to-operate
• Employee cafeteria menu quality
• Local tax filing history unrelated to R&D credits

Correct Answer: Key clinical data, regulatory status, and IP freedom-to-operate

Q11. Which term describes cost advantages achieved when producing larger volumes of a drug formulation?

• Economies of scale
• Economies of scope
• Network externality
• Market cannibalization

Correct Answer: Economies of scale

Q12. Cross‑licensing agreements between pharma firms are typically used to:

• Exchange manufacturing equipment between companies
• Resolve or reduce patent litigation and allow mutual technology access
• Hire each other’s sales teams temporarily
• Share office space to reduce overhead

Correct Answer: Resolve or reduce patent litigation and allow mutual technology access

Q13. Which metric is most appropriate to measure market growth rate for a drug segment over several years?

• Inventory turnover
• Compound Annual Growth Rate (CAGR)
• Employee retention rate
• Gross margin per unit

Correct Answer: Compound Annual Growth Rate (CAGR)

Q14. In open innovation models, pharma companies often engage external partners primarily to:

• Completely outsource corporate governance
• Access external R&D capabilities, specialized expertise, or novel compounds
• Avoid all internal R&D spending forever
• Eliminate regulatory compliance responsibilities

Correct Answer: Access external R&D capabilities, specialized expertise, or novel compounds

Q15. What is a common risk when pursuing rapid inorganic growth through multiple acquisitions?

• Immediate increase in product pipeline diversity without integration issues
• Integration challenges, culture clashes, and unexpected liabilities
• Automatic improvement in regulatory approval success rates
• Guaranteed reduction in operational complexity

Correct Answer: Integration challenges, culture clashes, and unexpected liabilities

Q16. Which networking strategy is best for a pharmaceutical startup seeking early-stage funding and mentorship?

• Cold-calling random suppliers
• Joining specialized biotech investor networks, incubators and angel groups
• Refusing any external partnerships until product launch
• Focusing exclusively on social media followers

Correct Answer: Joining specialized biotech investor networks, incubators and angel groups

Q17. A franchise model in healthcare/pharma is least likely to be appropriate for:

• Retail pharmacy chains using standardized operations
• Clinical diagnostic lab networks with uniform protocols
• Commercialization of proprietary active pharmaceutical ingredient (API) manufacturing technology requiring tight IP control
• Pharmacy clinics offering standardized minor ailment services

Correct Answer: Commercialization of proprietary active pharmaceutical ingredient (API) manufacturing technology requiring tight IP control

Q18. Which strategic move helps a pharma firm reduce time-to-market by leveraging external clinical trial capacity?

• Vertical integration into unrelated consumer goods
• Outsourcing trials to reputable Contract Research Organizations (CROs)
• Hiring more internal administrative staff
• Completely stopping partnership activities

Correct Answer: Outsourcing trials to reputable Contract Research Organizations (CROs)

Q19. “Network effects” in a pharmaceutical or healthcare platform context mean:

• The platform becomes less useful as more users join
• User value increases as more participants (clinics, labs, patients) join the platform
• All participants must be part of the same corporation
• Network size has no impact on platform value

Correct Answer: User value increases as more participants (clinics, labs, patients) join the platform

Q20. When considering strategic fit for an alliance, which element is most critical to evaluate alongside technical capabilities?

• Color of company logo
• Cultural compatibility and governance structures for decision-making
• Number of social media posts per month
• Distance between company cafeterias

Correct Answer: Cultural compatibility and governance structures for decision-making

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