Strategic Management in Non-market Environments
05/11 – 06/11.
Cheetah / Hyena video Analogues to business world o Make kill, but can you hold when scavengers come o Eat fast if you’re a cheetah Value Creation o Economic Activity Value Capture o Power, Leverage Companies you create (value you create) must be cognizant of game to come (value capture) Boeing Site distribution throughout US, most Congressional districts o Helps when applying / bidding for contracts o Decision making process in Congress If only worried about “capturing an antelope” (market environment), wouldn’t design locations for supply chain this way Recognizing hyenas (non-market environment effects) o How to ensure capture value o Spread out across country (multiple congressional districts) o Helps with getting funding (congressionally directed contracts) GM locations are more concentrated o Operationally makes more sense, politics weren’t controlling decision making o However, when GM needs something from Government, may be in worse position than Boeing Wal-Mart Not in bigger cities o Local players (protected), politics can block entry o How negotiate, work around? Market vs. Nonmarket Environment Market transactions are typically consensual and bilateral o Voluntary, fundamental 1:1 (bilateral negotiations between parties) Nonmarket transactions are rarely consensual and are almost always multilateral Market environment focuses on economics Nonmarket environment combines political science, psychology and ethics. Integrated, Managerial Strategy Goal as a Manager is to integrate Market and Non-market strategy Four I’s (way to analyze situation) Issues Interests Institutions
Information Diebold Case Risks (reputational, new technology) o Can we create Ballot Security service arm, to help solve problem and also create profitability for firm? Quality issues Communication / marketing plan Reach out to political parties, special interest groups ...
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