(3 MAINTAIN OR BREAK COOPERATIVE EQUILIBRIUM Now that you have resolved the contract issue with Brixmortar, you can move on to the final issue you want to resolve before dealing with GN-Tech, You and your biggest rival, MDCO Inc, have been engaging in a repeated game in the market for blood pressure medication. Both ELX Labs and MDCD Inc. have tacitly agreed to a price for their respective medications that has held steady over time, increasing and decreasing slightly in relation to specific market pressures. The price of ELX Labs' medication always moves in line with MDCO Inc. and vice versa, Likewise, both companies have tacitly agreed to alternate rebate periods for the purchase of the drug. MDCO Inc. will offer a rebate one sales quarter, and ELX Labs will do so the next. This cooperative equilibrium has proven lucrative for both companies in the past, but times change, The threat of ON-Tech in the cholesterol market has some in your company saying you should rethink your strategy in the blood pressure market. What do you think the best move is now for ELX Labs with regard to its relationship with MDCO Inc. in this market? Select an option from the choices below. Signal to MDCO Inc. that you have every intention of maintaining the cooperative equilibrium in the blood pressure medication market, Change the game with MDCO Inc. by dramatically undercutting its prices and offering rebates during quarters when MDCO Inc. typically does. Change the game, but in a more moderate way; by maintaining the tit-for-lat relationship with rebates, but undercutting MDCO Inc.'s prices overall, ANTICIPATING GN-TECH'S STRATEGY After clearing up contract problems with Brixmortar and setting a strategy with MDCO Inc, ELX Labs is now ready to confront the pricing issue with GN-Tech directly. The first thing you and your team need to figure out is how CN-Tech would price its biosimilar drug in relation to ELX Labs' drug Minichol. You and your team come up with a few possibilities, and you have to decide which you think is GN-Tech's most likely move. Which is in? Select an option from the choices below. GN-Tech will try to match the price of Minichol. GN-Tech will price its drug lower than Minichol. * GN-Tech will price its drug higher than Minichol. DECIDING HOW TO APPROACH GN-TECH'S PRICING STRATEGY ON-Tech is most likely to go with a low pricing strategy, so you need to determine how best to counter this move. Your team has a lot of interesting ideas, perhaps too many to process all at once. So you take a step back and try to break the choices into the most basic components. You determine that you have a fundamental choice to make: Does ELX Labs take an aggressive position and proactively counter GN-Tech's entry into the market, or would it be better to take a more passive approach and do nothing at all? Select an option from the choices below. Take direct action to counter GN-Tech's entry into the market. $ Take a more passive, wait-and-see approach
