First Look

First Look summarizes new working papers, case studies, and publications produced by Harvard Business School faculty. Readers receive early knowledge of cutting-edge ideas before they enter the mainstream of business practice. For complete details on faculty research, see our Working Papers section.

March 12

Do ads work on mobile devices?

In a recent article for Harvard Business Review, Professor Sunil Gupta looks at the growing trend of advertisers on mobile devices who are abandoning display ads in favor of apps. "There's a growing consensus that ads don't work on mobile devices; consumers just don't like them," Gupta writes. Read the story, "For Mobile Devices, Think Apps, Not Ads."

China's ambitious plans for electric vehicles

For anyone who has seen images of thick smog blanketing China's largest cities, one hopes that its innovative push towards creating an electric vehicle industry works. Writing for the Stanford Social Innovation Review, Christopher Marquis, Hongyu Zhang, and Lixuan Zhou review progress of the "bold experiment." Unfortunately, they report, the Ten Cities, Thousand Vehicles program has fallen behind on its goals. Read why in, "China's Quest to Adopt Electric Vehicles."

Research In (downward) Motion

Six years ago, Research in Motion (RIM) was the world's leading smart phone maker—creator of the Blackberry. Today, it is struggling to stay alive, pinning its hopes on the new Z10 phone and a corporate name change. A previous case on the company, "Research In Motion: The Mobile OS Platform War," has been updated by Alan MacCormack, Brian Dunn, and Chris F. Kemerer. "The case allows students to understand the strategic dynamics in platform-based industries in general and to explore more specifically how a firm that led the industry in 2007 could fall to earth so dramatically four years later," according to the authors.

 

Publications

Local Industrial Structures and Female Entrepreneurship in India

Abstract

We analyze the spatial determinants of female entrepreneurship in India in the manufacturing and services sectors. We focus on the presence of incumbent female-owned businesses and their role in promoting higher subsequent female entrepreneurship relative to male entrepreneurship. We find evidence of agglomeration economies in both sectors, where higher female ownership among incumbent businesses within a district-industry predicts a greater share of subsequent entrepreneurs will be female. Moreover, higher female ownership of local businesses in related industries (e.g., those sharing similar labor needs, industries related via input-output markets) predict greater relative female entry rates even after controlling for the focal district-industry's conditions. The core patterns hold when using local industrial conditions in 1994 to instrument for incumbent conditions in 2000-2005. The results highlight that the traits of business owners in incumbent industrial structures influence the types of entrepreneurs supported.

Paper: http://www.people.hbs.edu/wkerr/121212-Female1_Spatial.pdf

For Mobile Devices, Think Apps, Not Ads

Abstract

Many companies envision mobile ads becoming an integral part of their communications strategies. But there's a growing consensus that ads don't work on mobile devices; consumers just don't like them. Instead of creating tiny banner ads, smart marketers will turn to apps to reach customers and engage them. Effective apps will do one of the following: (1) Add convenience. Banking apps, for example, let people pay their bills online, and airline apps let them check in and monitor the status of their flights. (2) Offer unique value. In South Korea, commuters can use an app to order groceries while waiting for their trains. (3) Provide social value. Apps on Facebook and other sites let users send gifts to their friends. (4) Offer incentives. Apps that give away mobile minutes, for instance, can entice customers. (5) Entertain. Red Bull and other companies have devised popular games focused on their brands. "Mobile advertising" is often a hollow phrase, but mobile apps can enable marketers to communicate with consumers in a format that enhances their lives and offers long-term value.

Paper: http://hbr.org/2013/03/for-mobile-devices-think-apps-not-ads/ar/1

The Mobile Banking Payment Revolution

Abstract

Mobile technology is revolutionizing the global banking and payment industry. It offers new opportunities for banks to provide added convenience to their existing customers in developed countries and reach a large population of unbanked customers in emerging markets. However, banks face significant challenges as new players enter these markets and change the ecosystem of the industry. Although no single model has been successfully imported from one country to another due to significant country-specific differences in the regulatory financial infrastructure and customer needs, financial service firms can learn some lessons from the limited success of current approaches to design their strategy in this exciting area.

Do You Really Want to Be an eBay?

Abstract

Most companies that serve as intermediaries between buyers and sellers face a fundamental strategy decision: Should they be resellers (like supermarkets), acquiring and then reselling products or services? Should they operate as multisided platforms (like eBay), connecting buyers and sellers without controlling or owning the offerings being sold? Or should they blend the two models?

Paper: http://hbr.org/2013/03/do-you-really-want-to-be-an-ebay/ar/1

Prize-based Contests Can Provide Solutions to Computational Biology Problems

Abstract

Advances in biotechnology have fueled the generation of unprecedented quantities of data across the life sciences. However, finding analysts who can address such "big data" problems effectively has become a significant research bottleneck. Historically, prize-based contests have had striking success in attracting unconventional individual who can overcome difficult challenges. To determine whether this approach could solve a real big-data biologic algorithm problem, we used a complex immunogenomics problem as the basis for a two-week online contest broadcast to participants outside academia and biomedical disciplines. Participants in our contest produced over 600 submissions containing 89 novel computational approaches to the problem. Thirty submissions exceeded the benchmark performance of the U.S. National Institutes of Health's MegaBLAST. The best achieved both greater accuracy and speed (1,000 times greater). Here we show the potential of using online prize-based contests to access individuals without domain-specific backgrounds to address big-data challenges in the life sciences.

Paper: http://www.hbs.edu/faculty/Publication%20Files/Lakhani%202013%20Prize%20Contests%20Nature%20Biotech_074fddc3-1449-45fe-a1a0-8086a8883f99.pdf

China's Quest to Adopt Electric Vehicles

Abstract

The Chinese government's effort to create an electric vehicle industry is a bold experiment in local and system-level innovation. It also provides a window into understanding the promise and peril of economic development policies, both for China and for the rest of the world.

Paper: http://www.ssireview.org/articles/entry/chinas_quest_to_adopt_electric_vehicles

Why 'Fair Value' Is the Rule: How a Controversial Accounting Approach Gained Support

Abstract

For the past two decades, fair-value accounting-the practice of measuring assets and liabilities at estimates of their current values-has been on the ascent. This marks a major departure from the centuries-old tradition of keeping books at historical cost. It also has implications across the world of business, because the accounting basis-whether fair value or historical cost-affects investment choices and management decisions, with consequences for aggregate economic activity. This article discusses the role of investment banking and investment management industry veterans on the Financial Accounting Standards Board in the growth of fair-value accounting. It raises the possibility of special-interest capture of accounting regulation by segments of the financial-services industry.

Paper: http://hbr.org/2013/03/why-fair-value-is-the-rule/ar/1

 

Working Papers

Carry Trade and Exchange-Rate Regimes

Abstract

Carry-trade activity and foreign participation in local-currency-bond markets in emerging countries have increased dramatically over the past decade. In light of these trends, we revisit the question of the optimal exchange-rate regime when developing countries can borrow internationally with local-currency-denominated debt. We find that, as local currency bond markets develop, a "pseudo-flexible regime," whereby a country accumulates reserves in conjunction with debt, to be the best policy alternative under real external shocks for emerging nations.

Download the paper: http://www.hbs.edu/faculty/Publication%20Files/13-074.pdf

 

Cases & Course Materials

Mutti Spa

Alvarez, Jose B., Mary L. Shelman, and Carin-Isabel Knoop
Harvard Business School Case 513-034

Francesco Mutti, owner, CEO, and great-grandson of the founder of Mutti Spa, ran the 113-year old Parma, Italy-based tomato-processing company. Mutti sales grew from €11 million in 1995 to €185 million in 2011, without producing for store brands in a market in which these offerings were steadily gaining share. The company's leaders wanted to make sure Mutti maintained its position in Italy and further, to move into a leadership position in several countries around the world. What was next for the family firm and brand leader from northern Italy's Emilia-Romagna region? How would the singularly focused, consensus-driven firm fare in an increasingly competitive, globalizing retail landscape?

Purchase this case:
http://hbr.org/search/513034-PDF-ENG

Uptake of Malaria Rapid Diagnostic Tests

Ashraf, Nava, and Natalie Kindred
Harvard Business School Case 911-007

This case describes barriers to adoption of malaria rapid diagnostic tests in Zambia and highlights the importance of understanding end users in promoting product adoption. Rapid diagnostic tests (RDTs) are simple, easy-to-use tools that provide a relatively reliable, inexpensive way to confirm diagnoses of malaria. In addition to ensuring that patients' febrile illnesses are properly diagnosed and treated, confirming malaria diagnoses has broader public health benefits, including promoting the efficient use of limited malaria medications and preventing increased resistance to first-line malaria treatment. However, despite the evident potential benefits of RDTs, many clinicians in Zambia do not use them or simply ignore their results. Why don't they trust these tools, and what can be done to improve adoption? Various barriers to uptake and methods to overcome these challenges are explored, with broad implications for technology adoption and health policy. A particular emphasis is placed on the role of behavioral preferences.

Purchase this case:
http://hbr.org/search/911007-PDF-ENG

Getting Back to Your Roots: Rose Carpenter's Story

Davis, John A., Janet Kraus, and Lisa Strope
Harvard Business School Case 813-077

Rose Carpenter is a successful entrepreneur who is considering the personal implications of leaving the business she created to pursue her own interests.

Purchase this case:
http://hbr.org/search/813077-PDF-ENG

Developing the Materiality Matrix at Telefónica

Eccles, Robert G., George Serafeim, and Asun Cano Escoriaza
Harvard Business School Case 413-088

Telefónica, one of the largest telecommunication companies in the world and headquartered in Spain, has been issuing a corporate sustainability report since 2002. In its 2011 Sustainability report, the company included a "materiality matrix," and was one of only five of the 97 companies in Spain that produced a sustainability report that year. The case describes the purpose of the materiality matrix, how it was developed, and the opportunities the company sees for improving it.

Purchase this case:
http://hbr.org/search/413088-PDF-ENG

Research In Motion: The Mobile OS Platform War

MacCormack, Alan, Brian Dunn, and Chris F. Kemerer
Harvard Business School Case 613-001

The case describes competition in the market for smart phones in the U.S. and the position of one player, Research In Motion (RIM), who manufactures the popular Blackberry line of products. Early in 2011, RIM is in trouble. Its stock price has plummeted, amidst poor business results, and its future as an independent company is in doubt. A new Chief Executive Officer, Thorsten Heins, must decide how to position the company for the future. The case allows students to understand the strategic dynamics in platform-based industries in general and to explore more specifically how a firm that led the industry in 2007 could fall to earth so dramatically four years later. The case is based upon data and information from public sources.

Purchase this case:
http://hbr.org/search/613001-PDF-ENG

CLP: Powering Asia

Serafeim, George, Robert G. Eccles, and Dawn Lau
Harvard Business School Case 113-099

No abstract available.

Purchase this case:
http://hbr.org/search/113099-PDF-ENG

Entrepreneurial Management in a Turnaround Environment (EMTE) Fall 2012: Course Overview and Syllabus

Sharpe, Jim
Harvard Business School Case 813-127

Course Overview and Syllabus in the Fall Term 2012 for the Entrepreneurial Management in a Turnaround Environment (EMTE) course.

Purchase this case:
http://hbr.org/search/813127-PDF-ENG

First Solar: CFRA's Accounting Quality Concerns

Srinivasan, Suraj, and Ian McKown Cornell
Harvard Business School Case 113-044

The case relates to accounting quality analysis conducted by the leading research firm Center for Financial Research and Analysis (CFRA) on companies in the solar industry with a focus on First Solar Inc. In 2009, CFRA was concerned that First Solar, like much of the solar industry, was facing deterioration in business prospects and exposed to risks arising from revenue recognition, high inventory levels, lack of customer and geographic diversification, aggressive warranty policies, excessive production capacity growth, and supply chain risks. The case places students in the shoes of CFRA analysts who need to assess First Solar's accounting quality and business prospects after the company releases its second quarter financial numbers in 2009. The case provides students with background information on the solar power industry, First Solar, data from CFRA research, and First Solar's quarterly reports and the earnings conference call to analyze and draw conclusions about First Solar's accounting practices and strength as a company. Students have to decide whether CFRA should flag First Solar as a concern and add it to CFRA's "Biggest Concerns" list.

Purchase this case:
http://hbr.org/search/113044-PDF-ENG

Crafting a Founder Agreement at HealthCraft

Wasserman, Noam, Janet Kraus, and Yael Braid
Harvard Business School Case 813-101

HealthCraft's three founders are about to craft their founding agreement and split the equity among themselves. Uncertainty lingers over each member's future contributions, though-how is the team to devise a durable and effective split? Ever since consultant Kevin Rumsfeld conceived of the idea for HealthCraft, he had worked resolutely to begin building the company by recruiting a talented colleague to help with marketing and fundraising and a junior member of one of his project teams to help him build the product. All three had been enthusiastically working on HealthCraft part-time for the last few months, contributing from personal savings to build a prototype. But now the pressure is on to discuss and finalize a founding agreement. What should they include in the agreement, and how should they structure their equity split?

Purchase this case:
http://hbr.org/search/813101-PDF-ENG