1. Identify your market goals
Your market goals should guide your nonmarket activities. Common goals include:
- Increasing demand: Nestlé led industry efforts to establish food safety standards in developing markets, expanding the overall market for packaged foods while building consumer trust.
- Reducing costs: The pharmaceutical industry has coordinated to streamline regulatory approval processes globally, significantly reducing compliance costs and time-to-market.
- Increasing willingness to pay: The Wi-Fi Alliance’s certification programs increased consumer confidence in compatible products, supporting premium pricing for certified devices.
- Managing competitive dynamics: Apple has advocated for stringent privacy regulations that disproportionately impact advertising-dependent competitors, while aligning with its hardware-focused business model.
- Supporting brand reputation: Outdoor clothing company Patagonia’s environmental advocacy reinforces its brand positioning while influencing regulations that affect its industry.
2. Understand the context
You need to understand the broader context of the issues you’re seeking to address:
- Where are we at? Early-stage issues offer more opportunity for shaping, while later-stage issues may require adaptation.
- Who are the active stakeholders here? What is their relative power, and what are the dynamics among them? Map the key players, their influence, and how they might respond to different approaches.
- Tactics: what tactics are available or excluded? Consider formal constraints (laws and regulations) and informal norms that affect available strategies.
3. Identify your key stakeholders
Successful nonmarket strategy requires detailed stakeholder mapping:
- What are stakeholders’ ideologies, goals, and priorities? Understanding motivations beyond immediate policy positions is crucial.
- What is their ability to influence and their susceptibility to being influenced? Some stakeholders have formal authority but may be constrained, while others lack formal power but wield significant influence.
- What are their strategic approaches and tactics? Anticipating how stakeholders operate helps in planning engagement.
- What is their intensity of interest in the issue? Highly motivated stakeholders with focused interests may exert outsized influence.
4. Define your goals
Nonmarket strategies typically focus on three goals:
- Creating, supporting, or blocking laws and regulations: This involves direct engagement with legislative and regulatory processes.
- Influencing regulatory interpretations: Even when laws are established, their implementation often involves significant discretion.
- Developing voluntary industry standards or practices: Industry self-regulation can pre-empt or shape formal regulation.
5. Decide the methods
Implementing a nonmarket strategy requires careful consideration of the following:
- Resources: What financial, organizational, and reputational resources will we commit?
- Coalitions: Will we work with competitors, supply chain partners, or cross-sector allies? How will roles and responsibilities be allocated?
- Influence paths: Will we engage stakeholders directly, or work through intermediaries?
- Tactics: Will we focus on lobbying, public campaigns, participation in standards bodies, or some combination?
6. Evaluate what success looks like
Effective nonmarket strategies include clear evaluation criteria:
- Ethical considerations: Does the strategy align with our values? What are its broader social and environmental impacts?
- Feasibility: What is the probability of success, given stakeholder dynamics?
- Return on investment: What are the expected benefits relative to costs, considering financial and non-financial returns?
- Strategic alignment: How well does the nonmarket strategy complement our market strategy?
