Business organizations operate in a highly volatile environment characterized by competition and uncertainties. For this reason, it is very important that managers of such companies take adequate time to plan, devise, and implement practical strategies that enhance firm’s performance and sustainability. Among different types of business strategies, market and non-market strategies are popularly used to keep stakeholders satisfied while also improving organizational profitability. In this paper, the difference between these two strategies will be discussed, and an exposition of the significance of non-market strategies provided.
A company applies market strategies with the primary motive of increasing profits or attracting more customers. When a company is seeking to improve its competitive advantage and operate sustainably within a given industry, it will most likely employ market strategies by reviewing or improving its product lines as well as investing more innovative solutions (De et al. 3). In simple words, a market strategy focuses on positioning as well as market choice, after which firms will be keen to ensure that the needs of customers in specific markets are fulfilled adequately.
Non-market strategies, on the other hand, are designed with the aim of establishing and maintaining positive relationships between a company and external stakeholders, namely, the government and the society. It is a well-known fact that business success is not determined by customers, suppliers, competitors, and employees alone; external agencies such as government, media, and the society equally have an impact. It is worth noting that much as business transactions essentially take place within the market environment, non-market environment actors affect viability and success. Structures and standards set by the government as well as the society act as either threats or opportunities (Lussier and Sherman 21). This is to say that non-market actors are crucial to companies because their success and position within a given market are significantly influenced by these actors.
Having distinguished market strategies from non-market strategies, it is important to outline the significance of the latter to firms. Going by the fact that it is the non-market environment that creates threats and opportunities, it follows that carefully-formulated non-market strategies will help an organization to safeguard its position by taking advantage of emerging opportunities while at the same time mitigating any threats that arise.
Secondly, and closely related to the above, is that non-market strategies are very instrumental to the reduction of business risk. Besides uncertainties over whether a venture will succeed or whether or not a firm will sell all its merchandise profitably, managers of business organizations often find themselves worrying about how their firms are perceived by the public. Similarly, pressure from different interest groups has been identified as a major reason for underperformance in firms (Voinea and Kranenburg 69). In short, there is too much risk that companies face, and the only way to minimize it is to implement non-market strategies, which have been proven useful in moderating the risk that external factors will pose.
To sum everything up, it can be stated that it is imperative managers learn the skills of integrating their market strategies with appropriate non-market strategies in order to enjoy sustainable competitive advantage. This statement is particularly true given that it is hard to separate a firm’s internal (market) environment from the external (non-market) environment.
De, Figueiredo et al. Strategy Beyond Markets. Emerald, 2016.
Lussier, Robert N. and Herbert Sherman. Business, Society, and Government Essentials: Strategy and Applied Ethics. Routledge, 2013.
Voinea, Cosmina L. and Hans V. Kranenburg. Nonmarket Strategic Management. Taylor & Francis, 2017.