Non-market strategy and the 'race to the bottom': lessons from the Baywatch experience

This article examines how international firms operate strategically in the non-market environment to secure advantages which improve their cost and/or revenue structures and, hence, their economic performance. It centres on a detailed case study of the globally popular Baywatch television show's efforts during 1999 to secure attractive locational subsidies by placing the states of New South Wales, Queensland (both in Australia) and Hawaii into competition with each other in a 'race to the bottom'. The article is organized into three main sections: the first briefly reviews the concept of non-market strategy; the second examines the Baywatch case in detail; and the conclusion presents some lessons for various stakeholders involved in this and similar non-market contexts.