Lecture 6

Question 1

Non-market strategy

Answer 1

Using institutional differences to create competitive advantage.

“a concerted pattern of actions taken in the non-market environment to create value by improving overall performance”

Question 2

Involved in the non-market

Answer 2

• Government
• Citizens
• Regulators
• Media
• Activists

Question 3

Non market environment is characterised by 4 I’s

Answer 3

• Issues, what non-market strategies address
• Institutions, bodies that the firm must interact with in course of its non-market behaviour
• Interests, individuals and groups with preferences about or stake in the non-market discussion
• Information, pertains to what the interested parties know or need to know about the matter on hand

Question 4

Which firms should have a non-market strategy

Answer 4

• big powerful firms

- Firms in industries where government control is high

Question 5

Integrated strategy

Answer 5

The market is always characterised by voluntary interactions non-market maybe voluntary, but often involuntary, this strategy integrates both the non-market and market

Question 6

non-market influences business

Answer 6

1. Fiscal factors (race to the bottom)
2. Legal factors
3. Political factors (governmental politics and activitsts)

Question 7

3 regulations in legal factors

Answer 7

• Environmental regulations
• Financial regulations (levels of protection)
• Business regulations (pro-business or pro-union)

Question 8

Corporate political strategy

Answer 8

Involves the activities taken by organisations to acquire, develop and use power to obtain an advantage

Question 9

3 strategies how businesses can influence the non-market

Answer 9

• Financial incentives strategy - businesses provide incentives to influence government policy-makers to act
• Constituency building strategy - businesses gain from other affected organisations to better influence government policy makers
• Information strategy - businesses provide government policymakers with information to influence their actions

Question 10

3 ways of constituency building

Answer 10

• Stakeholder coalitions - Firms influence politics by mobilising various stakeholders to support its political agenda
• Advocacy advertising - Ads that focus on the firm’s view on controversial political issues
• Legal challenges - Businesses seek to overturn a law

Question 11

Lobbying

Answer 11

Lobbyists communicate with, and try to persuade others to support an organisation’s interests or stake, as they consider a particular law, policy or regulation