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Market Rebels

Market Rebels: How Activists Make or Break Radical Innovations

Copyright Date: 2009
Pages: 222
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  • Book Info
    Market Rebels
    Book Description:

    Great individuals are assumed to cause the success of radical innovations--thus Henry Ford is depicted as the one who established the automobile industry in America. Hayagreeva Rao tells a different story, one that will change the way you think about markets forever. He explains how "market rebels"--activists who defy authority and convention--are the real force behind the success or failure of radical innovations.

    Rao shows how automobile enthusiasts were the ones who established the new automobile industry by staging highly publicized reliability races and lobbying governments to enact licensing laws. Ford exploited the popularity of the car by using new mass-production technologies.

    Rao argues that market rebels also establish new niches and new cultural styles. If it were not for craft brewers who crusaded against "industrial beer" and proliferated brewpubs, there would be no specialty beers in America. But for nouvelle cuisine activists who broke the stranglehold of Escoffier's classical cuisine in France, there would have been little hybridization and experimentation in modern cooking.

    Market rebels also thwart radical innovation. Rao demonstrates how consumer activists have faced down chain stores and big box retailers, and how anti-biotechnology activists in Germany penetrated pharmaceutical firms and delayed the commercialization of patents.

    ReadMarket Rebelsto learn how activists succeed when they construct "hot causes" that arouse intense emotions, and exploit "cool mobilization"--unconventional techniques that engage audiences in collective action. You will realize how the hands that move markets are the joined hands of market rebels.

    eISBN: 978-1-4008-2974-3
    Subjects: Economics, Marketing & Advertising, Business

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface
    (pp. ix-xvi)
  4. 1 From the Invisible Hand to Joined Hands
    (pp. 1-17)

    But for the personal computing movement, there would be no Apple. Nearly all of the technical aspects associated with personal computing—small computers, microprocessors, keyboard-based interfaces, individual usability—were available in 1972. As early as 1969, Honeywell had released the H316 “Kitchen Computer” priced at $10,600 in the Neiman Marcus catalog, and in 1971 John Blankenbaker had introduced the Kenbak-1 priced at $750 and Steve Wozniak and Bill Fernandez had built their Cream Soda Computer—so named because they drank Cragmont cream soda as they built the computer with chips discarded by local semiconductor companies.

    But the idea of using...

  5. 2 “You Can’t Get People to Sit on an Explosion!”: The Cultural Acceptance of the Car in America
    (pp. 18-42)

    Consider the electric car. In 1990, California was the first state to issue a “Zero Emissions Vehicle” mandate and virtually ordered automakers to produce electric cars as a growing percentage of their business if they wanted to participate in the market in California. General Motors launched the EV-1 in 1996, and Toyota introduced the RAV4 EV, which plugged into wall outlets and could travel for eighty miles or so before needing a recharge.

    Automakers, as the trenchant documentaryWho Killed the Electric Car?shows, were, at best, half-hearted in their commitment to the electric car and, at worst, fiercely lobbied...

  6. 3 Evange-Ale-ists and the Renaissance of Microbrewing
    (pp. 43-68)

    An early debate in anthropology hinged on whether the urge to brew beer or to make bread was the impetus for human beings to domesticate wild grains, become sedentary, and organize themselves into communities.¹ Two anthropologists, Solomon Katz and Mary Voigt, argued that beer was the driving force for the domestication of grains and the organization of communities because it provided nutrition and eventually became incorporated into social and religious systems.² Indeed, a tablet dated to 1800 BC contains a “Hymn to Ninkasi,” which invoked the Sumerian goddess of brewing, and Hammurabi’s code, also dating to 1800 BC, prescribes penalties...

  7. 4 The French Revolution: Collective Action and the Nouvelle Cuisine Innovation
    (pp. 69-94)

    December 16, 1897, was a red-letter day in the systematization of classical French cuisine. On that day, Auguste Escoffier composed the first menu at the Ritz Hotel in London and started the practice of serving each dish in the order printed on the menu. Before Escoffier’s innovation, each course had consisted of a number of related dishes that were served en masse on the table, and patrons were invited to choose among them. Escoffier’s first menu (see table 4.1) is striking because it reflected the building blocks of classical cuisine: heavy soups such as beef consommé thickened with arrowroot and...

  8. 5 Show Me the Money: Shareholder Activism and Investor Rights
    (pp. 95-118)

    Robert Nardelli, the former CEO of Home Depot, received $245 million in compensation from the board from 2000 until 2005, when the stock slid by 12 percent despite the $20.3 billion stock buyback program. During the same time period, Lowe’s, Home Depot’s rival, saw its stock go up by 173 percent. In 2005, even when Home Depot’s stock was stagnant, the board raised Nardelli’s salary by 8 percent to $2.16 million and boosted his bonus by 22 percent to $7 million. In dramatic contrast, Lowe’s CEO, Robert Tillman, was given less than a quarter of what Nardelli received.¹ Outraged Home...

  9. 6 Chain Reaction: The Enactment and Repeal of Anti–Chain Store Laws
    (pp. 119-141)

    From 1990 to 2000, the retail sector in the United States experienced an extraordinary degree of consolidation. Eleven thousand independent pharmacies closed during that period. Independent bookstores accounted for 58 percent of book sales in 1972 but only 17 percent of book sales in 2000. Two hardware chains captured 30 percent of the market by 2000. In 1995, five firms controlled 19 percent of the grocery market, and by 2000 their share reached 33 percent. The growth of large chains or “big box” stores has ignited a social movement seeking to preserve the identities of small towns and to protect...

  10. 7 Drug Wars: How the Anti-Biotechnology Movement Penetrated German Pharmaceutical Firms and Prevented Technology Commercialization
    (pp. 142-171)

    Germany was one of the very first nations to commit to biotechnology research in the postwar era. By 1972, the Federal Research Ministry, under the aegis of the Social Democrats, developed a biotechnology development plan that established a national laboratory to promote biotechnology research.¹ By 1981, the Federal Research Ministry concluded that the plan neglected genetic engineering, and decided to change its focus. The ministry built three institutes in Munich, Heidelberg, and Cologne to focus on genetic engineering. In 1982, the new Christian Democratic Union–led government augmented support for biotechnology even further and doubled subsidies by 1988 to DM...

  11. 8 From Exit to Voice: Advice for Activists
    (pp. 172-180)

    In his influential bookExit, Voice and Loyalty, Albert Hirschman suggested that individuals had three options when dealing with dissatisfaction: to leave, to express one’s preferences, or to remain loyal. For Hirschman, exit was the principal choice in markets because withdrawal from a market by individuals was a more powerful signal than the complaints of individuals to producers.¹ Hirschman’s formulation emphasized exit as an individual response to dissatisfaction, and failed to take into account the collective dimension of voice—for economists, after all, markets are simply mechanisms to coordinate individual preferences, which rely on prices as signals. In the late...

  12. Notes
    (pp. 181-196)
  13. Index
    (pp. 197-205)