Strategy Non Market Environments

Strategic Management in Non-market Environments 05/11 06/11. Cheetah / hyena video ? Analogues to business world o Make kill, solely force fall out you hold when scavengers come o Eat fast if youre a cheetah ? rate Creation o Economic Activity ? Value Capture o Power, Leverage Companies you create ( abide by you create) must be advised of game to come (value capture) Boeing ? Site distribution throughout US, most congressional districts o Helps when applying / bidding for contracts o Decision devising process in Congress ? If only worried astir(predicate) capturing an antelope (market environment), wouldnt design locations for make out chain this way ?Recognizing hyenas (non-market environment effects) o How to ensure capture value o Spread out crossways country (multiple congressional districts) o Helps with getting funding (congressionally directed contracts) ? GM locations atomic number 18 more knockout o Operationally makes more sense, politics werent controlling end making o However, when GM needs something from Government, may be in worse position than Boeing Wal-Mart ? Not in bigger cities o local anaesthetic players (protected), politics poop block entry o How negotiate, work nigh? Market vs.Nonmarket Environment ? Market proceeding are typi mobilisey accordant and bilateral o Voluntary, fundamental 11 (bilateral negotiations between parties) ? Nonmarket transactions are rarely consensual and are almost always twelve-sided ? Market environment focuses on economics ? Nonmarket environment combines political science, psychology and ethics. Integrated, Managerial Strategy ? Goal as a Manager is to mix Market and Non-market strategy Four Is (way to analyze situation) ? Issues ? Interests ? Institutions ? randomness Diebold Case ?Risks (reputational, new technology) o rear end we create Ballot guarantor service arm, to help solve problem and also create profitableness for firm? ? Quality departures ? Communication / marketing plan ? Reach out to political parties, special interest groups ? Diebold should chip in known Bev Harris, taken her call ? Diebold files suit under DMCA (may non have been best idea in non-market environment) o Protecting access to information becomes worldwide cause ? government is unstable o Have to be farsighted o Can not be myopic, take short term view ? Pays to case-hardened the genda (want to be the one who makes theproposal) o Proposal helps define the winners and losers o essential to be the agenda setter Observations on Nonmarket Strategy & Analysis ? Issues pay nonmarket competition ? Market rivals can be nonmarket allies conglutinations can be effective ? Your choice of objectives determines who is aligned with and against you ? Alignments of interests are often issue-specific ? Business can represent those who would otherwise be unrepresented ? Institutional features matter e. g. , Federal versus conjure jurisdiction ?When attempting to stop an issue, proposing better alternatives is often effective o put up other interests into play ? If there is a problem for you at the political party level (e. g. , appearance of besmirchion), then form coalitions and work on behalf of coalition o J&J partner with other pharmaceutical, healthcare orgs, activistic groups (help assure people are not acting in corrupt fashion, but for greater public good) o Can expand to not just now specific industry, but all businesses in area (e. g. , bedchamber of commerce), etc. ? When thinking about coalitions ask who benefits from my success on this issue?Goal of Course ? Dont accept that rules are indomitable (rules are not fixed) o But think about is there a way that we can change the rules to benefit the troupe o Dont miss opportunity to change b/c have not considered ? Politics is about public good, but also fundamentally about redistribution o How can set strategy to affect positively for our organization ? Complication of Politics o masses are motivated to g o to voting booth on object lesson concerns along with economic o Sometimes issues that can be orotund motivators may not have as large an impact as other concernsLuxury Tax Case ? 1990 Tax was introduced on luxury items o Huge political fight, tiny revenue generator (not crucial in context of trying to balance the federal budget) ? Why was the tax introduced if go away not have large impact? ? May have just been for the perception create impression that care about fairness in way that doesnt create large new taxes for parties ? Core constituents tactile property that they care about values they run on ? May have been to help reelection problem ?Opposed to tax consumers of luxury goods, manufacturers of luxury items, retailers of contradictory luxury items ? Supporters of Luxury Tax foreign manufacturers of boats, people who dont buy luxury items, domestic manufacturers of luxury cars, manufacturers of substitutes for luxury items, some NGOs (anti-fur, anti-diamong) o Not an a ccident that bill does not apply to GM (b/c GM was on committee working on bill) ? When make predictions in the political arena, are going to ask o Who are important interest groups, who will have power on the issue ? elephantine number of voters ? Wealth / contributions / participation of group ? Do you have connections with gravestone members of Congress? ? Distribution of voters ? Ability to get media attention (celebrities, experts) ? Is the group nonionic? o Who has power, who has incentives? ? Can go a long way to making predictions once have the details of the situation ? What determines the incentives for action? o magnitude of benefits will receive ? As a group ? As individuals (per capita) ? Substitutes and probability cost ? How does this compare to other issues ?Expected Return on run ? (how much work will take / what is expected impact) ? Potential reputational cost ? Luxury Tax Coalition ? Yachts Not as many manufacturers, not as well distributed (concentrated in states like Rhode Island, smaller state) ? Foreign manufacturers are not voters poor position when entering country ? Cross of manufacturers (Horizontal across Rent Chains) Airplanes, Boats o Distributed Politics Spreadsheet, Cemex case ? ? ? See spreadsheet for Distributed Politics notes special Lowi Matrix Cemex case notes on handouts