Strategy: Competitive Analysis

38 Results

 

HBS Cases: What Warren Buffett Saw in Newspapers

When Warren Buffett made a bid for troubled Media General's newspapers, analysts wondered whether the legendary investor had lost his fastball. Hardly, as Benjamin Esty's case reveals. Closed for comment; 3 Comments posted.

How Numbers Talk to People

In their new book Keeping Up with the Quants, Thomas H. Davenport and Jinho Kim offer tools to sharpen quantitative analysis and make better decisions. Read our excerpt. Open for comment; 3 Comments posted.

Marketplace or Reseller?

Intermediaries can often choose to operate as a marketplace, as a reseller, or as a hybrid having some products offered under each of the two different modes. For example, Alibaba.com, eBay.com, Premium Outlets, and Simon Malls act as marketplaces, in which suppliers sell directly to buyers via a platform. In contrast, retailers like 7-Eleven, Eastbay.com, Lowes, and Zappos.com resell the products they purchase from suppliers to buyers. A hybrid mode is also possible: For example, the largest electronics retailer in the United States, Best Buy, has taken a step towards the marketplace mode by allowing Apple, Samsung, and Microsoft to launch their own ministores within Best Buy stores. What economic tradeoffs drive an intermediary to adopt one mode over the other, or both? In this paper, the authors provide a new style of modeling intermediaries' strategic positioning decisions and a theory of which products an intermediary should offer in each mode. They also present a guide to how intermediaries should optimally position themselves between the two different modes. Managerial implications not only apply to an intermediary choosing between positioning itself as a pure reseller or a pure marketplace, but to hybrid modes in which the intermediary needs to determine how many products (and in the case of diverse products, which products) to offer in each mode. Read More

Should Managers Bother Listening to Predictions?

Summing Up Should we use predictions at all when planning for the future? Jim Heskett's readers offer a variety of opinions. What do YOU think? Closed for comment; 38 Comments posted.

What Wall Street Doesn’t Understand About International Trade

Firms that correlate their international trading activity with the local ethnic community significantly outperform those that don't, according to new research by Lauren H. Cohen, Christopher J. Malloy, and Umit G. Gurun. Closed for comment; 4 Comments posted.

Location Choices Under Strategic Interactions

How do firms decide their location when expanding geographically? This paper explores how strategic interaction among competitors affects firms' geographic expansion across time and markets. HBS professor Juan Alcacer builds a model in which two firms that differ in their capabilities enter sequentially into two markets with different potentials for profit. The model is solved using game theory under three learning scenarios that capture the ability of a firm to transfer its capabilities across markets: no learning, local learning, and global learning. Three equilibrium strategies emerge: accommodate, marginalize, and collocate. Alcacer identifies how these strategies are more or less likely to emerge depending on three parameters: initial relative firm capabilities, relative market profitability, and learning rates. For managers, the paper illustrates different ways that firms can use location choices across time and geographic markets as a tool to enhance or preserve their competitive position within an industry. Read More

The Most Common Strategy Mistakes

In a new book, Understanding Michael Porter: The Essential Guide to Competition and Strategy, Joan Magretta distills Porter's core concepts and frameworks into a concise guide for business practitioners. In this excerpt, Porter discusses common strategy mistakes. Closed for comment; 36 Comments posted.

Charitable Giving When Altruism and Similarity Are Linked

Harvard Business School professor Julio J. Rotemberg looks at what makes people decide to contribute to a charity. He focuses on two psychological factors: that people feel better about themselves when other people agree with them, and that people tend to be more charitable to other like-minded people. Read More

Schumpeterian Competition and Diseconomies of Scope: Illustrations from the Histories of Microsoft and IBM

Firms dominant in one era are often less successful in new technological eras, despite being able to exploit economies of scope and other incumbent advantages. What leads to this Schumpeterian creative destruction? Researchers Timothy Bresnahan (Stanford), Shane Greenstein (Northwestern), and Rebecca Henderson (Harvard Business School) look to IBM and Microsoft for an answer. Read More

Multinational Firms, Labor Market Discrimination, and the Capture of Competitive Advantage by Exploiting the Social Divide

Women and ethnic minorities are frequently discriminated against in the labor markets of both developed and emerging economies, particularly in opportunities for management positions. Multinationals entering such markets must decide whether to aggressively hire and promote the excluded group, thus reaping the benefits of their underutilized talent, or conform to local practice and avoid provoking some bigoted policymakers, executives, purchasers, and/or supply agents. In this paper, HBS professor Jordan Siegel, Lynn Pyun, and B.Y. Cheon find that multinationals gain significant competitive opportunities by scanning the host-market social landscape, identifying social schisms in the labor market, and exploiting such schisms by actively hiring and promoting members of the excluded group to positions of management responsibility. Read More

Business Model Innovation and Competitive Imitation

When and why should an entrant adopt a new business model when the innovation could be imitated by an incumbent? In this paper, HBS professor Ramon Casadesus-Masanell and University of Southern California professor Feng Zhu examine the desirability, or lack thereof, of business model innovations when they cannot be protected, opening the door to competitive imitation. Issues of competing through new business model design become more important given the increasing number of opportunities for business model configurations enabled by technological progress, new customer preferences, and deregulation. Read More

From Russia with Love: The Impact of Relocated Firms on Incumbent Survival

The relocation of the machine tool industry from the Soviet-occupied zone of postwar Germany to western regions is a unique laboratory for studying the impact of industrial structures on incumbent survival. Typically, geographic agglomerations of similar firms offer benefits to each member firm by reducing the transportation costs for material goods, specialized workers, and industry knowledge among the firms. Of course, tight geographic concentration comes with countervailing costs as firms compete for local inputs. In this paper, HBS professor William R. Kerr and coauthors study the impact of increased local concentration on incumbent firms by considering postwar Germany, when the fear of expropriation (or worse) in the wake of World War II prompted many machine tool firm owners to flee to western Germany, where they reestablished their firms. Read More

What Is the Future of MBA Education?

Why get an MBA degree? Transformations in business and society make this question increasingly urgent for executives, business school deans, students, faculty, and the public. In a new book, Rethinking the MBA: Business Education at a Crossroads, Harvard Business School's Srikant M. Datar, David A. Garvin, and Patrick G. Cullen suggest opportunities for innovation. Q&A with Datar and Garvin plus book excerpt. Read More

A Golden Opportunity for Ford and GM

With Toyota caught in a downshift, competitors should make aggressive moves to capitalize, says HBS professor Bill George. For starters, they need to improve their auto lineups for the long term. He explains how Ford and GM can best navigate the industry landscape ahead. Read More

Does Product Market Competition Lead Firms To Decentralize?

There is a widespread sense that over the last two decades firms have been decentralizing decisions to employees further down the managerial hierarchy. Economists have developed a range of theories to account for delegation, but there is less empirical evidence, especially across countries. This has limited the ability to understand the phenomenon of decentralization. Nicholas Bloom, HBS professor Raffaella Sadun, and John Van Reenen assembled a new data set on about 4,000 firms across 12 countries in Europe, North America, and Asia, and then measured the delegation of authority from central headquarters to local plant managers. Read More

Competing Ad Auctions

Joining ad platforms can attract substantial regulatory attention: In November 2008, the Department of Justice planned to file antitrust charges to stop the proposed Google-Yahoo transaction. More recently, in September 2009, the Department of Justice sought additional information from Microsoft and Yahoo about their proposed partnership. At first glance it might seem paradoxical to claim that the Google-Yahoo transaction is undesirable, for advertisers and for the economy as a whole, while the Microsoft-Yahoo transaction offers net benefits. But that conclusion is entirely possible. HBS professor Benjamin G. Edelman and doctoral candidates Itai Ashlagi and Hoan Soo Lee explore competition among ad platforms that offer search engine advertising services. In addition, the authors evaluate possible transactions among ad platforms—building tools to predict which transactions improve welfare and which impede it. Read More

Optimal Auction Design and Equilibrium Selection in Sponsored Search Auctions

Reserve prices may have an important impact on search advertising marketplaces. But the effect of reserve prices can be opaque, particularly because it is not always straightforward to compare "before" and "after" conditions. HBS professor Benjamin G. Edelman and Yahoo's Michael Schwarz use a pair of mathematical models to predict responses to reserve prices and understand which advertisers end up paying more. Read More

International Differences in the Size and Roles of Corporate Headquarters: An Empirical Examination

Are small headquarters more nimble and efficient than large ones? Not necessarily, according to HBS adjunct professor David Collis and coauthors David Young and Michael Goold. Even within a single industry in one country, the variance can be enormous: In Germany in the late 1990s, for instance, Hoechst, the chemical and pharmaceutical manufacturer, had only 180 people in the headquarters function at the same time that Bayer had several thousand. This paper seeks to fill gaps in the research by using a unique database of over 600 companies in seven countries to determine whether systematic differences in the size and roles of corporate headquarters between countries actually exist, and if so, how they differ. In particular, the authors examine whether there is a systematic difference between market- and bank-centered economies, and between developed and developing countries. Read More

Principles that Matter: Sustaining Software Innovation from the Client to the Web

Despite the current strength and promise of the Internet software market, the future pace of growth and innovation is not assured. The principles of choice, opportunity, and interoperability were important in the growth of PC software and in the overall health of the information technology ecosystem, and these same principles will shape competition in Internet software, according to HBS professor Marco Iansiti. Given the unprecedented speed at which this industry is developing, consumers and the industry should watch carefully as different companies compete. Choice, opportunity, and interoperability should serve as an important lens, particularly when focused on companies with especially large footprints in the new markets. Read More

Marketing After the Recession

This downturn has likely changed people's buying habits in fundamental ways. Professor John Quelch discusses why marketers must start planning today to reach consumers after the recession. Read More

Concentration Levels in the U.S. Advertising and Marketing Services Industry: Myth vs. Reality

How concentrated is the U.S. advertising and marketing services industry? Over the past several decades, the effects of deregulation, globalization, and technological innovation have reshaped the advertising and marketing services industry as they worked their way through the economy. Estimates from the existing literature are typically based on data from trade sources and present a picture that emphasizes rising concentration over time and domination by a handful of holding companies. These estimates are suspect as they suffer from a number of conceptual and measurement limitations. This paper analyzes changes in concentration levels in the U.S. advertising and marketing services industry, using data that have been largely ignored in past discussions of the economic organization of the industry. Read More

What Should Employers Do about Health Care?

Companies that cut health care costs without improving the overall value of care eventually pay a price in terms of employee absenteeism and chronic ailments. According to Harvard University professor and strategy expert Michael E. Porter and coauthors, the best way to truly reduce health care costs is to improve quality. Read More

Dynamics of Platform Competition: Exploring the Role of Installed Base, Platform Quality and Consumer Expectations

What factors drive platform success, long-run market structure, and market efficiency? Conventional wisdom suggests that for a new platform to be successful, either it must make its technology compatible with the incumbent, or its technical advantage must offer so much value to consumers that it exceeds the combination of functionality, installed base, and complementary goods value offered by the incumbent. Zhu and Iansiti develop a dynamic model to examine the evolution of platform-based markets. They find that a huge quality advantage may not be necessary for an entrant to be successful. Using data from the video game industry, they find support for their theoretical predications. Read More

Podcast: Rupert Murdoch and the Wall Street Journal

Media baron Rupert Murdoch's bid to acquire Dow Jones and the Wall Street Journal is one step closer to fruition. In this interview, Professor Bharat N. Anand discusses the proposed deal and pressures facing the newspaper business. Read More

Ambidexterity as a Dynamic Capability: Resolving the Innovator’s Dilemma

Can organizations adapt and change—and if so, how does this occur? There are two major camps in the research on organizational change: those that argue for adaptation, and those that argue that as environments shift, inert organizations are replaced by new forms that better fit the changed context. There are data to support both arguments. This paper discusses the idea and practicality of ambidexterity and shows how the ability to simultaneously pursue emerging and mature strategies is a key element of long-term success. Read More

The Speed of New Ideas: Trust, Institutions and the Diffusion of New Products

Does trust confer competitive advantage in terms of time, money, and productivity? Previous research indicates that it does. This study shifts perspective slightly and asks whether trust can also act as a barrier to entry. In other words, are trusted suppliers protected from competition if buyers are reluctant to try new products and services offered by other suppliers? Oberholzer-Gee and Calanog explored the link between levels of trust and the decision to adopt a new product using a field experiment on the diffusion of an innovative floor drain for the plumbing market. Read More

Wintel: Cooperation or Conflict

Industries are becoming more horizontal. Products that used to be designed and manufactured by a single firm are now produced by different companies that must coordinate activities. Here, the authors detail the relationship between Intel and Microsoft (both integral to PCs) and, using a mixed-duopoly model, analyze the dynamics of cooperation verses competition. They find that costs associated with complementary R&D, conflicts of interest in pricing, and the possibility of competitors all factor in the decision of when to cooperate or compete. Read More

Hold or Fold? Sizing Up Business Risk

According to Eileen C. Shapiro and HBS professor Howard H. Stevenson, three key elements help you size up an option: your satisfaction to date, predictions about likely results, and future intentions. A book excerpt from Make Your Own Luck. Read More

Start to Measure Your E-commerce Success

After the dot-com fallout, surviving companies needed to sharpen strategy and analyze metrics much better. Visiting professor Marc J. Epstein shows how to put metrics to work. Read More

The Innovator’s Battle Plan

Great firms can be undone by disruptors who analyze and exploit an incumbent’s strengths and motivations. From Clayton Christensen’s new book Seeing What’s Next. Read More

Strategy for Small Fish

Microsoft, Wal-Mart, and eBay provide ecosystems in which other companies thrive or fail. But what are effective strategies for a small fish in a big pond? An excerpt from The Keystone Advantage by HBS professor Marco Iansiti and Roy Levien. Read More

Michael Porter’s Prescription For the High Cost of Health Care

The troubled U.S. health care system needs a brave, new kind of competition, say HBS professor Michael E. Porter and the University of Virginia’s Elizabeth Olmsted Teisberg. A Harvard Business Review excerpt. Read More

Creating Value in Your Business Ecosystem

The metaphors of keystones and ecology help you think about your business environment, say professor Marco Iansiti and consultant Roy Levien. A Harvard Business Review excerpt. Read More

Mapping Your Corporate Strategy

From the originators of the Balanced Scorecard system, Strategy Maps is a new book that explores how companies can best their competition. A Q&A with Robert S. Kaplan. Read More

Globalization: The Strategy of Differences

Should your global strategy optimize scale or exploit differences? HBS professor Pankaj Ghemawat suggests a mix-and-match strategy in this excerpt from Harvard Business Review. Read More

What Your Competition is Telling You

Your competitors, closely analyzed, can help you influence your own customers and help grow the market for your products and services. Here’s how. Read More

Disruption: The Art of Framing

Your chief competitor creates a breakthrough technology. Should you frame that event inside your company as a threat or opportunity? The answer in this Harvard Business Review excerpt by HBS professors Clark Gilbert and Joseph L. Bower just may surprise you. Read More

How to Compete Like a Judo Strategist

Movement, balance, and leverage: Savvy executives use these principles to compete every day. In this excerpt from their new book Judo Strategy: Turning Your Competitors' Strength to Your Advantage, HBS professor David B. Yoffie and research associate Mary Kwak reveal five techniques of the masters. Read More