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Strategic Activism: The Rainforest Action Network
The Rainforest Action Network (RAN) worked "to protect the Earth's rainforests and support the rights of their inhabitants through education, grassroots organizing, and nonviolent direct action." RAN accomplished its mission by organizing campaigns to redirect corporations away from the destruction and exploitation of nonsustainable forest resources. RAN worked with other nongovernmental organizations, student groups, and indigenous forest communities. Founded in 1985, RAN had 10,000 members and an annual budget of $2 million in 2003. Over time, the scope of RAN's campaigns had broadened. RAN sought to stop the logging of old growth forests, protect fragile ecosystems, and reduce the threat to forests and the environment due to climate change. RAN's three campaigns in 2004--the Old Growth Campaign, the Global Finance Campaign, and Jumpstart Ford--focused on these objectives. In April 2003, RAN's board of directors appointed as executive director Michael Brune, the former campaigns director for the organization. Brune and the board of directors began a review of RAN's strategy and mission in light of the expanded scope of RAN's campaigns. RAN had limited resources and was stretched to conduct three campaigns. What changes to RAN's strategy, structure, and resource base would be required if it were to expand its mission, for example, to include natural systems such as clean air, clean water, and the climate? -
Anatomy of a Corporate Campaign: Rainforest Action Network and Citigroup (B)
An abstract is not available for this product. -
Anatomy of a Corporate Campaign: Rainforest Action Network and Citigroup (A)
Citigroup, the world's largest project finance bank, provided financing for extractive projects such as mining, logging, and oil exploration. Some of these projects took place in developing countries and in rainforests and other endangered ecosystems. In 2000, the Rainforest Action Network (RAN) launched its Global Finance Campaign, with Citigroup as the target. The goal was to convince Citigroup, and eventually all lenders, to stop financing destructive activities in endangered ecosystems. The campaign began in early April 2000 when RAN wrote to Citigroup, urging it to address its role in financing the destruction of the world's remaining old growth forests and the acceleration of climate change. Shortly thereafter, at Citigroup's annual meeting, RAN campaigners questioned the board of directors and CEO Sandy Weill in front of an audience of shareholders. Citigroup agreed to meet with RAN immediately following the annual meeting. For the next two years, Citigroup and RAN held regular meetings, while RAN continued its protest activities. Mike Brune, executive director of RAN, believed that Citigroup was stalling--the meetings were discussions, not negotiations. -
Note on AIDS and the Pharmaceutical Industry
Covers the AIDS epidemic, including history, treatment, drug pricing, and economics. -
Pharmaceutical Switching
In an unprecedented move in mid-1998, Blue Cross of California, a unit of WellPoint Health Networks, Inc., filed a Citizen Petition with the FDA to switch Claritin, manufactured by Schering-Plough, and two other second-generation antihistamines from prescription-only to over-the-counter (OTC) status. Prescription pharmaceuticals like Claritin were covered by insurance programs, whereas OTC drugs were not. In the late 1990s, U.S. spending on prescription pharmaceuticals had increased significantly, in part as a result of direct-to-consumer advertising of prescription drugs, and posed a substantial burden on insurance companies. Blue Cross argued that the switch would make the drugs more widely available to consumers and would benefit consumers because the second-generation antihistamines were non sedating, unlike the 100 antihistamines sold on the OTC market. Manufacturers opposed the switch because it would put the second-generation antihistamines under considerable price pressure and would disrupt their product planning. Moreover, a switch initiated by an insurance company could lead to future petitions for switches of other prescription drugs. Just under three years later, on May 11, 2001, an FDA advisory committee voted overwhelmingly that the three second-generation antihistamines could safely be marketed over the counter. Although the vote was not binding, the FDA usually acted in accord with the judgements of its advisory committees. The pharmaceutical companies strongly objected to the committee's vote and faced the challenge of developing a strategy for dealing with the threat. -
Sophis Networks and Encryption Export Controls (A)
The vice president of the Security Products Division of Sophis Networks along with the Government Affairs Group had spent the past two and a half years working closely with Congress and the Clinton administration to relax U.S. export restrictions on encryption products (because export restrictions meant lost sales for U.S. companies such as Sophis, and customers outside the United States demanded products with the highest level of encryption available). However, President Clinton pledged to veto a bill called the Security and Freedom Through Encryption Act (SAFE), which was to relax U.S. export restrictions. The vice president and the Government Affairs Group at Sophis needed to develop a "nonmarket" strategy and implementation plan to relax encryption export controls. -
Microsoft Antitrust Case
In 1998, the U.S. Department of Justice, together with 19 state attorney generals, filed an antitrust action against Microsoft Corp. for anticompetitive conduct and violation of the Sherman Act. Details the Department of Justice's allegations and the case presented to the court, as well as Microsoft's position on the issues and line of defense. Describes the sequence of events, starting with the trial court, the judge's ruling and remedies, Microsoft's appeal, the court of appeal's decision and, ultimately, the settlement reached by both parties in November 2001. -
Proposition 211: Securities Litigation Referendum (B)
In 1996, Silicon Valley companies and their leaders organized a successful campaign to defeat a ballot initiative that would have circumvented federal law and made securities fraud lawsuits, which the companies believed were largely frivolous, easier to win. Approximately 1,300 federal class action securities fraud lawsuits were filed from 1988 to 1996, resulting in settlements averaging $7.3 million. The lawsuits, which alleged securities fraud resulting from inflated earnings projections by the firms, were typically filed after a sharp fall in a company's share price. High technology firms, which frequently have volatile share prices, were the principal target of the lawsuits. Several law firms, led by Bill Lerach, specialized in these lawsuits, and some were believed to have stables of shareholders who would file a lawsuit as soon as a company's share price fell significantly. Even though the defendant companies were confident that no fraud had been committed and that the lawsuits were frivolous, the defendants felt compelled to settle to avoid a prolonged and costly court battle. In 1995, high technology, accounting, and other firms succeeded in having Congress enact federal legislation limiting the circumstances under which such lawsuits would be successful. Restricted at the federal level, the plaintiff's bar sought to use state laws as the basis for their lawsuits. To strengthen their position under state law, the plaintiff's bar qualified a referendum, proposition 211, for the November 1996 California ballot. If passed by the voters, not only would securities fraud lawsuits be easier to win but virtually all publicly traded companies in the United States could be subject to lawsuits. -
Proposition 211: Securities Litigation Referendum (A)
In 1996, Silicon Valley companies and their leaders organized a successful campaign to defeat a ballot initiative that would have circumvented federal law and made securities fraud lawsuits, which the companies believed were largely frivolous, easier to win. Approximately 1,300 federal class action securities fraud lawsuits were filed from 1988 to 1996, resulting in settlements averaging $7.3 million. The lawsuits, which alleged securities fraud resulting from inflated earnings projections by the firms, were typically filed after a sharp fall in a company's share price. High technology firms, which frequently have volatile share prices, were the principal target of the lawsuits. Several law firms, led by Bill Lerach, specialized in these lawsuits, and some were believed to have stables of shareholders who would file a lawsuit as soon as a company's share price fell significantly. Even though the defendant companies were confident that no fraud had been committed and that the lawsuits were frivolous, the defendants felt compelled to settle to avoid a prolonged and costly court battle. In 1995, high technology, accounting, and other firms succeeded in having Congress enact federal legislation limiting the circumstances under which such lawsuits would be successful. Restricted at the federal level, the plaintiff's bar sought to use state laws as the basis for their lawsuits. To strengthen their position under state law, the plaintiff's bar qualified a referendum, proposition 211, for the November 1996 California ballot. If passed by the voters, not only would securities fraud lawsuits be easier to win but virtually all publicly traded companies in the United States could be subject to lawsuits. -
Echelon in Europe
Focuses on the nonmarket strategy of a high technology company to influence European standard setting for control networks. Echelon Corp. is a small, privately-held company located in Palo Alto, CA that produces open architecture control networks--communications systems that integrate disparate pieces of electronic hardware over some distance. These systems have applications ranging from automated assembly lines, to patient monitoring in hospitals, to fly-by-wire systems. This case addresses standard setting in Europe. Echelon's European competitors, led by Siemens, sought to establish application-specific standards that would limit the demand for Echelon's open architecture technology. Echelon had followed a strategy of blocking Siemens's attempts in the European Union standard-setting bodies by enlisting the support of its customers in countries such as the United Kingdom. The absence of standards caused by this blocking strategy was detrimental, however, to the development of the market for control network applications. Echelon had to determine whether it should continue with its current strategy, or work directly to have open architecture standards established, or initiate discussions with Siemens and other companies to develop open architecture standards jointly. Poses the strategy issue and asks how the strategy should be implemented. -
Integrated Strategy: Trade Policy, and Global Competition
An integrated strategy captures the synergies between competitive strategies that seek superior performance in the marketplace and nonmarket strategies that shape the competitive environment. This article extends the conceptual and analytical foundations of integrated strategy to a competitive environment structured by international trade policy. The framework is illustrated by the international trade dispute between the Eastman Kodak Co. and Fuji Photo Film Co. regarding access to the Japanese market for consumer film and photographic paper. The analysis focuses on the synergies between market and nonmarket strategies in which governments act as agents of their companies. The framework incorporates competition between the two companies in their market environment, competition in the nonmarket environment to influence their government's bargaining position, and bargaining between the governments. -
Integrated Strategy: Market and Non-Market Components
A business strategy must be congruent with the capabilities of a firm as well as both its market and nonmarket environments. The market environment includes those interactions between the firm and other parties that are intermediated by markets or private agreements. The nonmarket environment includes those interactions that are intermediated by public institutions. A business strategy must integrate both market and nonmarket components. -
Cemex and Antidumping
Under the leadership of CEO Lorenzo Zambrano, Cementos Mexicanos, S.A. (Cemex) has become the largest cement producer in North America and the fourth largest in the world. As a component of its globalization strategy Cemex expanded into the United States by building terminals and exporting cement from Mexico. U.S. producers countered with an antidumping petition under Section 731 of U.S. trade law, complaining that they were injured by the imported cement. The case presents the situation in the cement market and the administrative process that resulted in a 58% duty on Cemex imports. Focuses on Cemex's strategy for addressing the antidumping petition and its aftermath.