What Every CEO Needs to Know About Nonmarket Strategy – 09/16
• nonmarket strategy = strategy taking into account all stakeholders, actors, and factors
o By showing its commitment to the poor in India, Novartis has won important allies in
its fight for patent protection while undermining criticism from opponents
concerned about drug availability to the poor.
o Toyota negotiating fast lane access and free parking in LA for Prius owners. By
championing hybrids as a solution to air pollution and global warming, Toyota has
become a government partner that can help shape policy.
o By voluntarily reducing its CO2 emissions through innovative internal carbon trading,
BP can influence binding regulation.
• Markets is where buyers and sellers meet for a transaction. In reality there are much more
factors than just a buyer and a seller. They are surrounded by social, political and cultural
spheres. What happens within this nonmarket environment inevitably shapes dynamics
within markets.
• 4 factors driving investments in nonmarket strategies:
o Multiple audiences → Many companies now source from or sell to countries around
the world and must navigate simultaneously many distinct nonmarket environments
with conflicting social/political values.
o Globalization of nongovernmental organizations → modern communication
technologies allow to instantly affect people’s emotions and perspectives (e.g.
