In sectors
such as commercial biotechnology, it has become evident
that strategies to deal with non-market issues should be
a critical part of the business plan. Since government
and therefore public sentiment heavily influence regulatory
oversight, it is essential to understand the opinion forming
processes of these influencers. In the case of the public,
the societal significance and audience interest of an issue
can predict the likely coverage in the media, while the
government’s opinions are formed as a direct result
of the net effect of information provided to them by a
variety of interest groups with differing priorities, agendas
and power. An understanding of the processes involved allow
development of strategies that can shape the regulatory
and legislative environment of emerging businesses while
ignoring this can lead to commercial inviability. Being
adept in dealing with non-market issues can form the basis
of sustainable competitive advantage, which is in turn
translated into shareholder wealth creation.
This
paper applies widely accepted non-market strategy frameworks
to a case from the more nascent days of the life-sciences/biotech
industry, namely the European Biotechnology Patents Directive.
In this case, the management of non-market issues overlapped
with the critical areas of intellectual capital management
and legislative strategy and gives a useful example of
how activists and lobby groups use non-market strategies
to pursue their agenda, in this case to block key legislation.
Interestingly it also shows how an industry does learn
to use non-market strategies, it can defeat entrenched
opposition.
The
case details the nature of the legislation, its development
and introduction into the legislative arena, the interest
groups that formed coalitions both for and against it,
and the tactics each used up to the first failure of the
legislation to be passed. We then apply analytical frameworks
to predict what should be the rational response of a company
in the pro-legislation coalition, to ensure the successful
passage on the second attempt and compare it to the actual
outcome.
