solution

As is evident from the strategic map in the case, the group of proprietary firms is able to command a much higher price for their patent-protected drugs than the generic group. What is the primary mobility barrier described in the case that prevents the firms in the generic group from ascending into the proprietary group of firms?

Multiple Choice

• The threat of new entrants is low in the proprietary group of firms.

• Intensive competitive rivalry in the generic group would be disrupted if firms changed strategies.

• Large investments in the direct sales force for prescription drugs.

• Strong R&D competence built over many years with large investments and complex alliances.

• The primary mobility barrier keeps the proprietary firms from joining the generic group.