Strategy is an essential ingredient of business success. But a number of scholars now assert that strategic planning is, in most cases, incomplete. David Bach, Strategy Professor at IE, is one of them. He believes that companies need to give equal weight to how they are managing relationships with governments, regulators, non-government organizations (NGOs), the media and society at large. Bach has been researching nonmarket strategy for a number of years and teaches a required course on the subject at IE. Bach grew up in Germany, studied in the US and has worked with McKinsey and the Global Business Network as well as with Political Intelligence, an international lobbying consulting firm. In this interview, Bach tells how he came to believe that nonmarket strategy is essential for future corporate success.
David, you are one of a handful of people in the world studying nonmarket strategy.Why does this field interest you?
I see it as a very under-studied field. More than that, people in both academe and business seem to determine competitive advantage as a function of market matters per se â?? products, customers, market share and the like. But a number of us around the world are trying to elevate the importance of nonmarket strategy. Increasingly competitive advantage can be built or lost outside of markets. That means there are huge opportunities for companies here but also immense dangers to anyone focused purely on the market side.
A firm not only maintains relationships with its customers, suppliers and competitors (what we can refer to collectively as the â??market environmentâ?) but also maintains relationships with governments, regulators, non-government organizations (NGOs), the media and society at large â?? whether it wants to or not. So, yes, anyone can be affected by nonmarket forces and in very consequential ways.