Why did Unilever enter the market for plant-based alternatives to meat? Why was BP engaged in solar panel manufacturing? And why did Patagonia enter the organic food market?
Usually market entry decisions are ascribed to superior resources or capabilities: companies enter markets where they can leverage their knowledge, technology, or expertise to gain an advantage. But of the three instances mentioned above, only one is largely consistent with this story. What accounts for market entry decisions when companies do not have the requisite resources and capabilities?
A first step to solving this puzzle is to acknowledge that the markets these companies have entered—markets for organic food, solar energy, and plant-based meat alternatives—are all instances of so-called “moral markets”: sectors that emerge not just to create economic value, but to explicitly offer market-based solutions to social and environmental problems.
Continue Reading…