Strategy Non Market Environments

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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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