Ism Lecture 6

Front 1

What is a market strategy?

Back 1

A concerted pattern of actions taken in the market environment to create value by improving economic performance

Front 2

What is the non-market?

Back 2

The non-market environment consists of the social, political, and legal arrangements that structure the firms interactions outside of, and in conjunction with, markets... it includes those interactions that are intermediated by the public, stakeholders, governments, the media, and other public institutions

Front 3

Characteristics of the non-market?

Back 3

1. Issues
-Regulations, proposed laws, court judgments.
2. Institutions
-Regulators, legislatures, courts
3. Interests
-Goals can include “fairness”, “harmony”, and inclusion
4. Information
-Prejudices, rumor, state reports, media

Front 4

Characteristics of the market?

Back 4

1. Issues
-Porter’s 5 forces
2. Institutions
-Arms length market transactions, voluntary decision-making
3. Interests
-Firms seek to maximize profits
4. Information
-Market research, reputation, advertizing

Front 5

Where can a non-market strategy be used for?

Back 5

1.Create opportunities for self
2.Alter rival’s current opportunities
3.Block rival’s opportunities altogether
4.Reducing threats from rivals
5.Reducing threats from the state
6.Mitigating threats
7.Creating threats and uncertainty

Front 6

In what ways does the non-market impacts business?

Back 6

•Other firms can use the non-market to hinder the firm
•The non-market can change to hinder the firm.

Front 7

How can business affect the non-market?

Back 7

Rather than passively responding to the non-market, perhaps a more active approach to managing the non-market is better.

Corporate political strategy Involves the activities taken by organizations to acquire, develop, and use power to obtain an advantage.

Front 8

Name three strategic types of how a business can influence the non-market

Back 8

1.Financial-incentives strategy
- businesses provides incentives to influence government policymakers to act.
2.Constituency-building strategy
- businesses seek to gain from other affected organizations to better influence government policymakers to act in a way that helps them.
3.Information strategy
- businesses provide government policymakers with information to influence their actions.

Front 9

Name some financial incentives

Back 9

-Political contributions
-Economic leverage
-Political consulting aid
-Office personnel
-Soft money

Front 10

Name some constituency building strategies

Back 10

-Stakeholder coalitions
-Advocacy advertising
-Public relations and trade associations
-Legal challenges

Front 11

Name some information strategies

Back 11

-Lobbying
-Direct communications with policymakers
-Expert witness testimony

Front 12

What are the two levels of lobbying?

Back 12

1. Grassroots Lobbying – Mobilizing the “grassroots”— individual citizens who might be most directly affected by legislative activity—to political action

2. Political Action Committees (PACs) are groups of businesses that use financial resources to influence policy.