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Chapter Two:
Integrated Strategy
True/False Questions:
1) A business strategy serves as a firm’s navigational guide in its market and
nonmarket environments.
2) A market strategy is a concerned pattern of actions taken in the nonmarket
environment to create value by improving overall performance.
3) Nonmarket strategies deal with improving the economic performance of the firm.
4) Market and nonmarket strategies focus on the pursuit of prospects and advantages
in the face of market and nonmarket competition with the goal of achieving
greater performance.
5) Opportunities cannot be controlled by private politics
6) The importance of nonmarket strategies is related to the control of the firm’s
opportunities.
7) The importance of a nonmarket strategy is related to the control of a firm’s
strengths.
8) When looking to the future in planning nonmarket strategies, it is best to assume
that neither market nor nonmarket strategies will be fixed.
9) The nonmarket environment should be thought of as competitive.
10) Timing can be everything in a nonmarket strategy.
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11) An effective market strategy is essential for successful performance, but it is not
always the only feature needed.
12) One can either integrate market and nonmarket analysis or view them as separate
forces.
13) Nonmarket positioning is not influenced by a firm’s market strategy.
14) Nonmarket positioning should be a conscious choice rather than dictated by a
firm’s market positioning or by those in its environment.
15) The pharmaceutical companies tend to seek visibility rather than covering their
activities through an association or other means.
16) One role of nonmarket strategy is to level the playing field for the implementation
of a market strategy.
17) Positioning in political space affects the opportunity to participate effectively in
lawmaking and rule-making processes.
18) All positioning in political space may become untenable..
19) A company that is very adept at managing the legal environment effectively is
Microsoft.
20) Just as firms create value by deploying market capabilities, firms deploy
nonmarket capabilities to create value.
21) Expertise in dealing with the news media is a market asset.
22) The framework for analysis of nonmarket issues includes the screening of
generated alternatives, the analysis of those alternatives, and the choice of a
strategy.
23) Nonmarket capabilities can give a firm a nonmarket advantage.
24) In the screening stage, alternatives that are contrary to the law, widely shared
ethical principles, or a well-evaluated company policy are eliminated.
25) Moral motivations are analyzed in the screening phase of analysis.
26) In the nonmarket environment, many moral claims about rights are frequently
made..
27) Citibank used a person’s undergraduate major as one measure of creditworthiness
in deciding whether to issue a credit card.
28) In the screening process, Citibank found the use of its screening device to be both
discriminatory and illegal.
29) Citibank’s screening approach meet with no opposition on campuses because it
seem a fair and equitable system for evaluating students in terms of
creditworthiness.
30) The responsibility for addressing nonmarket issues should reside with operating
managers and not with a separate staff unit.
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Multiple Choice Questions:
31) What serves as a guide to a firm’s actions in its market and nonmarket
environments?
a) A business strategy
b) The stock market
c) Shareholders’ annual voting
d) Employee demands
32) A market strategy consists of actions taken in the market environment to create
which of the following for a firm by improving economic performance:
a) Money.
b) Customers.
c) Value.
d) Stakeholders.
33) The importance of nonmarket strategies is related to the control of a firm’s
a) Threats.
b) Plans.
c) People.
d) Opportunities.
34) Opportunities can be controlled by ______ at one extreme and _____ at the other
extreme.
a) Competitors, customers
b) Customers, suppliers
c) Government, markets
d) Markets, buyers
35) In the United States, the regulation of telecommunications is being replaced by
what?
a) International competition.
b) Market competition.
c) Globalization of the industry.
d) Privatization.
36) Which of the following industries has the least government control?
a) Local communications service
b) Biotechnology
c) Automobile
d) Consumer electronics
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37) What can be crucial for the success of a nonmarket strategy?
a) Timing
b) Marketing
c) Consumer involvement
d) None of the above
38) In terms of strategy and nonmarket issue life cycle, Nike found itself reacting to
what rather than shaping the development of the issue?
a) The government only
b) Their own culture
c) Others’ actions
d) None are correct
39) Nonmarket issue life cycle and strategy ranges from what to what on the
continuum of time?
a) Issue identification; enforcement
b) Interest group formation; enforcement
c) Legislation; administration
d) Issue identification; administration
40) The most effective means of integrating nonmarket strategies and market
strategies is to what?
a) Consider both strategies
b) Consider only nonmarket strategies
c) Consider only market strategies
d) Consider neither but come up with new strategies
41) ______ is a foundation for market or competitive strategy because it is a source
of competitive advantage.
a) Timing
b) Lobbying
c) Positioning
d) Marketing
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42) Nonmarket positioning is influenced by a firm’s
a) Finances.
b) Market strategy.
c) Customers.
d) Competition.
43) What was the primary concern for eBay in its positioning for a certain type of
space?
a) Market
b) Consumer
c) Legal
d) Moral
44) The collection of diverse interests, viewpoints, and preferences of the individuals
in society is known as what?
a) Public individualiality
b) Common sense
c) Public sentiment
d) Public wants and demands
45) BP managed its environment in many ways. One way that it solidified its
positioning relative to the natural environment was to what?
a) Move away from oil production and distribution of gasoline
b) Changed its symbol and slogan
c) Joined the Green Party
d) Appoint only environmentalists to its Board of Directors
46) Law-making and rule-making take place in what type of space?
a) Social
b) Legal
c) Political
d) Commercial
47) What space has Microsoft largely ignored, relying instead on its aggressive
approach to markets?
a) Legal
b) Public sentiment
c) Political
d) Nonmarket
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48) Positioning can also have its perils. Which of the following companies has been
lobbied heavily to increase its commitment to its own causes?
a) Xerox
b) GM
c) Microsoft
d) Starbucks
49) Firms deploy nonmarket capabilities to do what?
a) Add value
b) Beat the competition
c) Create new markets
d) Try new strategies
50) Which of the following are parts of the framework for the analysis of nonmarket
issues?
a) Screening
b) Analysis
c) Choice
d) All of the above
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Essay and Review Questions:
1) Describe and explain the concept of strategy in the nonmarket environment. Use
specific concepts and examples in your explanation focusing in on the specific
cases of eBay and Microsoft.
2) Using Exclusive Resorts as your example, write an analysis of nonmarket strategy
and its integration with market strategy. Be sure to use specific details and issues
in your analysis.
3) “An effective market strategy is necessary for successful performance, but is not
always sufficient. An effective nonmarket strategy is rarely sufficient, but for
most firms it is necessary for successful performance.” Explain this statement
using either the biotechnology or pharmaceutical industries.
4) Describe, explore, analyze and critique the market and nonmarket strategies used
by Nike and BP.
5) Using the three stage process of evaluating alternatives, analyze and critique the
case of Citibank and credit cards for undergraduates. What would you have
advised if you had been an analyst for the bank assigned to this project? Would it
matter to you if you were just out of undergraduate school or were a well-
established middle manager? Why or why not? How might your response impact
your evaluation?
6) “Reputations are established, and destroyed, by actions.” What does this
statement mean? How do market and nonmarket strategies guide actions in a
firm? In the current climate of distrust of many American businesses in the wake
of Enron, WorldCom and others, how is this sentiment even more telling? Use
specific firms to illustrate your points.
7) Identify and analyze the issues, political, legal, and market explored in the case of
Molecular Insight Pharmaceuticals. How well did MIP integrate the market and
nonmarket components of its business strategy?