Articles SNE 23/24
Week 36
1. Porter. M. 1985. Chapter 1: Competitive strategy: The core concepts. In: M. Porter, Competitive Advantage: Creating
and Sustaining Superior Performance. New York: The Free Press: 1-30.
2. Baron, D. P. 1995. Integrated strategy: Market and nonmarket components. California Management Review, 37(2):
47-65.
3. Hu, Y.-S. 1995. The International Transferability of the Firm's Advantages. California Management Review, 37(4):
73-88.
4. Tallman, S., & Cuervo-Cazurra, A. 2021. Global strategy. In I. Duhaime, M. Hitt, & M. Lyles (Eds.), Strategic
management: State of the field and its future. Oxford: Oxford University Press.
5. Dunning, J. H. 1980. Toward an eclectic theory of international production: Some empirical tests. Journal of
International Business Studies, 11: 9-31.
6. Zaheer, S. 1995. Overcoming the Liability of Foreignness. Academy of Management Journal, 38: 341-363.
7. Meyer, K., Wright, M., & Pruthi, S. 2009. Managing Knowledge in Foreign Entry Strategies: A Resource-Based
Analysis. Strategic Management Journal, 30: 557-574.
Week 37
8. Porter, M. E. 1998. Clusters and the new economics of competition. Harvard Business Review, 76(6): 77-90.
9. Flores, R. G., & Aguilera, R. V. 2007. Globalization and location choice: an analysis of US multinational firms in
1980 and 2000. Journal of International Business Studies, 38: 1187– 1210.
10. Goerzen, A., Asmussen, C. G., & Nielsen, B. B. 2013. Global cities and multinational enterprise location strategy.
Journal of International Business Studies, 4: 427–450.
11. Gereffi, G., & Lee, J. 2012. Why the world suddenly cares about global supply chains. Journal of Supply Chain
Management, 48(3): 24-32.
12. Strange, R., & Humphrey, J. 2019. What lies between market and hierarchy? Insights from internalization theory and
global value chain theory. Journal of International Business Studies, 50: 1401–1413.
13. Krause, D. R., Handfield, R. B., & Tyler, B. B. 2007. The relationships between supplier development, commitment,
social capital accumulation and performance improvement. Journal of Operations Management, 25: 528-545.
14. Verbeke, A. 2020. Will the COVID-19 Pandemic Really Change the Governance of Global Value Chains? British
Journal of Management, 31(3): 444-446.
Week 38
15. Koster, M., Alkema, R, & Williams, C. 2010. Resuming Internationalization at Starbucks. Ivey Publishing.
16. Vermeulen, F., & Barkema, H. 2002. Pace, rhythm, and scope: process dependence in building a profitable
multinational corporation. Strategic Management Journal, 23: 637-653.
Week 39
17. Chapters 1, 2, & 3 in C. Voinea and H. van Kranenburg. 2017. Nonmarket Strategic Management. Routledge: 3-40.
18. DiMaggio, P. J., & Powell, W. W. 1983. The iron cage revisited: Institutional isomorphism and collective rationality
in organizational fields. American Sociological Review, 48: 147-160.
19. Chapters 4 & 5 in C. Voinea and H. van Kranenburg. 2017. Nonmarket Strategic Management. Routledge: 41-68.
20. Dorobantu, S., Kaul, A., & Zelner, B. 2017. Nonmarket strategy research through the lens of new institutional
economics: An integrative review and future directions. Strategic Management Journal, 38(1): 114-140.
21. Mellahi, K., Frynas, J. G., Sun, P., & Siegel, D. 2016. A review of the nonmarket strategy literature: Toward a multi-
theoretical integration. Journal of Management, 42(1): 143-173.
Week 40
22. Lawrence, T. B. 1999. Institutional strategy. Journal of Management, 25(2), 161-187.
23. Navis, C., & Glynn, M. A. 2010. How new market categories emerge: Temporal dynamics of legitimacy, identity, and
entrepreneurship in satellite radio, 1990–2005. Administrative Science Quarterly, 55(3): 439-471.
24. Tracey, P., Phillips, N., & Jarvis, O. 2011. Bridging institutional entrepreneurship and the creation of new
organizational forms: A multilevel model. Organization Science, 22(1): 60-80.
25. Aldrich, H. E., & Fiol, C. M. 1994. Fools rush in? The institutional context of industry creation. Academy of
Management Review, 19(4): 645-670.
26. Lux, S., Crook, T. R., & Woehr, D. J. 2011. Mixing business with politics: A meta-analysis of the antecedents and
outcomes of corporate political activity. Journal of Management, 37(1): 223-247.
,Porter. M. 1985. Chapter 1: Competitive strategy: The core concepts. In: M. Porter, Competitive
Advantage: Creating and Sustaining Superior Performance. New York: The Free Press: 1-30.
,Baron, D. P. 1995. Integrated strategy: Market and nonmarket components. California
Management Review, 37(2): 47-65.
Strategic management market and nonmarket considerations. Nonmarket environment may be voluntary or
involuntary when government regulates an activity or activist groups organize a boycott of a firm's product. A
market strategy = create value by improving economic performance. A nonmarket = create value by improving
its overall performance
Nonmarket strategy = shape the firm's market environment, as when a firm lobbies in support of legislation to
lower trade barriers. NME: social, political, and legal arrangements that structure the firm’s interactions & is
characterized by four I's: issues, institutions, interests, and information.
− control of a firm’s opportunities Generally, NMS are important when opp. are controlled by
governments and less important when opp. are controlled by markets.
− challenges by interest and activist groups
Examples of Integrated Strategies
Calgene and Agricultural Biotechnology
− their tomato to remain longer, tomatoes are better tasting. No additional gasses
Cemexand the Antidumping Threat new strategic direction by entering the U.S
− filed an antidumping petition alleging injury by Mexican imports:
− strategy included reducing imports by withdrawing from markets such as Florida where cement prices
were low, and remaining in markets such as Arizona and California where prices were higher. Which
had the effect of reducing the dumping margin. Higher sales marging due to higher price and indirectly
through a lower duty.
Toys R Us and Globalization -price, selection, and stock-
− Singapore and Hong Kong seeking franchises, but policy = owning stores thus rejectec. The firms
persisted, thus joint ventures. Therefore globalization
− market environment = which countries to enter: large population and high income and take advantage of
market opportunities. local retailers were small competitive threat limited. nonmarket strength, political
influence depends on constituents not wealth
− JV MacD to provide expertise in locations and dealing with regulatory system.
− enter the Japanese market into an international trade issue that the U.S. government could address in its
ongoing negotiations with Japan
− win approval one store in town and show that it would not drive incumbent retailers from the market,
but increase total demand and reduce seasonality.
Market and Nonmarket Strategies competitive strategy (focus is on industry performance)
− economies of scale (store volume, distribution scale)
− bargaining power over suppliers, (=train manufacturer that refused became a supplier because Toys 'R'
Us offered to sell the trains in its stores in other countries)
− economies of scope (diapers, baby food, clothing, books),
− economies of partial backwards "integration" (through its supply system}."
globalization strategy (Porter) 5 market forces with which a firm must contend:
− rivalry among existing firms (Nonmarket strategies can provide competitive advantage by defending
against rivals)
, − threat of new entry, (Nonmarket strategies can be essential in creating market opportunities and
defending against new entrants and substitutes)(import taxes)
− threat of substitute products or services (new tomato , opposition)
− bargaining power of buyers (Nonmarket strategies can also address threats arising from the bargaining
power of suppliers and buyers)(consumer boycot)
− bargaining power of suppliers.
"An effective competitive strategy takes offensive or defensive action in order to create a defendable position
against the five competitive forces."
Integrating market/nonmarket analysis = nonmarket analysis into strategy formulation
− treat nonmarket strategies as instruments for addressing Porter's five forces.
o The drawback to this approach is that the institutions in which regulatory policies are decided
are quite different from the institution of markets.
− consider nonmarket factors as a sixth force to be defended against.
o its weakness is Treating nonmarket issues as a sixth force does not sufficiently emphasize the
interaction between the five forces and nonmarket issues
+ nonmarket action directed at creating/realizing market opportunities
− integrate nonmarket analysis and strategy formulation into the strategy process and focus both on
specific nonmarket issues that affect the firm and on nonmarket action as complements/substitutes for,
market actions (most effective)
o view the nonmarket environment as endogenous rather than as exogenous
Integrating market and nonmarket strategies
Calgene's developed market by educating the public.
Cemex's aggressive capacity expansion and modernization program, NME antidumping Petition filed Toys 'R'
Us's NME regulation/pressure from interest groups → necessary
Nonmarket assets and distinctive competencies
NM advantage = sustainable, when it is costly to replicate the assets and competencies
No advantage when it is not costly and there are interest groups against
- Example: access to legislators (Calgene). Consistent reputation & relations
- Not replicated capabilities = knowledge, expertise, and skill of managers
In NME, the Noerr-Pennington doctrine generally allows firms to join together to formulate and implement
NMS.
Strategies and borders (Bartlett and Goshall, MD/I/G)
Multidomestic – M, cost advantage (Honda) NME (supporting/working for free trade)
International - centering on transferring the parent's expertise to foreign markets
NM issues → strong domestic orientation (interests and institutions differ across). Multidomestic nonmarket
issues include antitrust policies, liability rules, safety regulation, intellectual property rights, and
environmental regulations.
In conclusion an integrated strategy = market and nonmarket to achieve long-term success in a dynamic
business environment. When the NME is important to the success of a competitive strategy, strategies must
be formulated and implemented effectively, and integrated with market strategies. NMS can be directed at
competition or opportunities blocked by the NME. Strategies depend on the 4 I’s of NME → more
multidomestic than global.
