Nonmarket Environment of Brazilian Biodiesel Industry: A Qualitative Assessment

Abstract

Brazil is one of the most relevant players in the production of biofuels worldwide. After the success of the Brazilian ethanol industry, biodiesel helps the country in the diversification of the portfolio of biofuel production. The Brazilian biodiesel industry is characterized by the presence of government agents as regulators in all stages of the supply chain since production to commercialization. From the standpoint of the concepts of nonmarket strategy, the more controlled is the industry, the more relevant is the nonmarket environment for the performance of the firm. From the learnings of Baron (1995a) and Baron (1995b), the objective of this study is to discuss the relevance of nonmarket environment for Brazilian biodiesel production firms from a business strategy standpoint. Using Grounded Theory as methodological tool for this investigation, it was found that Social Fuel is the most relevant aspect of the nonmarket environment in this industry.