the four characteristics of a non-market environment
Issues, interests, institutions, and information are the four characteristics of a non-market environment. Issues are the central argument or theme within the non-market context and include actions done by public or government authorities to check if a company adheres to set standards. These include industrial standards, moral obligations, and environmental standards, such as the need to counter pollution.
Interest relates to people or groups with a connection to the non-market issues. They could hold an economic or distributive stake to the problem.
The third is institutions. They comprise of government entities, regulatory bodies, media, and other external stakeholders. They provide a conducive social environment via human interactional and societal expectations for the interests to address the issues adequately.
The fourth is information. It relates to the amount of knowledge the interested parties to an organization know about the relationship between actions and results.
What is Michael E. Porter’s five force analysis, and how does it play a role in the market and non-market strategies?
Porter’s five force is a model which analyzes a business competitive advantage, and attractiveness to investors when compared to industry estimates. It explains an industry’s strengths and weaknesses. The model plays a role in the market and non-market strategies as it determines a company’s strengths or weaknesses to other businesses, and suppliers, among other industry estimates. The analysis influences the actions taken to increase their competitive advantage. The porters five forces include an assessment of buyer behavior. The outcome could encourage businesses to re-evaluate their relationship with stakeholders, including customers. Also, it could determine a company’s level of engagement in the industry’s actions.
Why can companies employ non-market assets to add value?
Companies implement various strategies to boost performance. They employ non-market assets to reinforce their actions in the management of company resources. It occurs through expert advice competency in dealing with interest groups. Besides, non-market assets enhance a company’s competitive advantage as it boosts their level of engagement with external actors. For instance, a company’s CSR policy focused on combating pollution reinforces a firm’s commitments for sustainability. Thus, companies can employ non-market assets to boost performance, competitive advantage, and indicate a company’s commitment to professionalism.