- 30 May 2017
- First Look
First Look at New Research and Ideas, May 30
Advice for those seeking advice ... Should CEOs become social activists? ... What companies don’t know about location.
- 28 Feb 2017
- First Look
First Look at New Research, February 28
How newspapers countered Craigslist ... Growth options for DO & CO ... Augmedix: a video transcription service for doctors.
- 14 Feb 2017
- Working Paper Summaries
Capturing Value from IP in a Global Environment
Challenges to capturing value from know-how and reputation through the use of different IP tools is an increasingly important matter of strategy for global enterprises. They will need to combine different institutional, market, and non-market mechanisms, but the precise combination of tools will depend on local and regional institutional and market conditions.
- 06 Oct 2016
- Cold Call Podcast
The Munich Oktoberfest: From Local Tradition to Global Capitalism
Professor Juan Alcacer discusses how the Oktoberfest brand has been transplanted around the globe, whether copycat festivals help or hurt its reputation, and to what extent its original hosts could or should be profit-motivated. Open for comment; 0 Comments.
- 20 Dec 2013
- Working Paper Summaries
Zooming In: A Practical Manual for Identifying Geographic Clusters
The concept of clusters-high concentrations of economic activity in a specific geographic unit-is the foundation for a vast amount of research in economics, management, urban planning, sociology, and public policy. Despite notable exceptions, little research has looked carefully at the key issue of cluster identification. In this paper the authors detail the reasons, procedures, data, and results of their effort to identify geographic clusters. They want to increase awareness of the complexities behind cluster identification, and to provide a concrete method that can help researchers define clusters more accurately. In particular, the authors address three related questions in cluster identification: (1) What economic activity should be measured to determine clustering? (2) What is the appropriate geographic unit over which economic activity should be measured? (3) What levels of economic concentration are high enough for the geographic unit to be labeled a cluster? They answer these questions with a combination of literature review, theoretical discussion, and illustrations with various algorithms. While they use a specific empirical context-the global semiconductor industry-for illustrative purposes, the insights and methodologies are general enough for other contexts. The organic cluster identification methodology they propose is especially useful when researchers work in global settings, where data available at different geographic units complicates cross-country comparison. Key concepts include: Given the importance of understanding firms' location strategies and economic geography more generally, it is necessary to look at the factors behind the choice of an appropriate geographic unit for empirical analysis, as well as the implications of such choices. This study provides a new method to identify a cluster organically based on the economic activities in the data. The method offers unique advantages in precision, flexibility, and applicability to cross-country studies. Closed for comment; 0 Comments.
- 23 Sep 2013
- Working Paper Summaries
Applying Random Coefficient Models to Strategy Research: Testing for Firm Heterogeneity, Predicting Firm-Specific Coefficients, and Estimating Strategy Trade-Offs
Textbooks generally define firm strategy as a set of decisions focused on managing organizational trade-offs in order to achieve long-term competitive advantage. Although strategy models theorize why the same actions by different firms lead to different effects on firm performance, empirical work typically estimates the average effect of an action across firms. The authors discuss how Random Coefficient Models (RCMs) can close the gap between theoretical and empirical research in strategy. Among other advantages to using RCMs, researchers can make a critical distinction between firm actions (or explanatory variables) that are statistically significant and those that are strategically significant. Key concepts include: The next-generation methodology of Random Coefficient Models (RCMs) has already been used extensively in education, biostatistics, political science, and other fields to identify, model, and leverage unobserved differences at the individual level. In non-technical terms, RCMs can be described as generalized versions of standard methods such as OLS, probit, logit, multinomial logit, and so on. The application of RCMs in strategy as a discipline would significantly advance the field by allowing scholars to directly test the many strategy theories based on firm-level differences. Closed for comment; 0 Comments.
- 11 Sep 2012
- Working Paper Summaries
Spatial Organization of Firms: Internal and External Agglomeration Economies and Location Choices Through the Value Chain
How do firms decide location strategy for distinct activities in the value chain, such as manufacturing, research and development, or sales? Does strategy depend on geographically bounded spillovers between firms, or within firms? This paper uses data for organic expansions in the US by firms in pharmaceuticals in 1993-2005 to consider two types of expansions. The first is internal: an increase in employment in existing establishments. The second is external: opening new establishments. Alcacer (HBS) and Delgado (Fox School of Business) argue that decisions about geographical location are a tradeoff between external drivers pulling firms to geographically disperse activities and internal drivers pushing within-firm collocation, either across activities (such as manufacturing and R&D) or within activities (such as multiple R&D labs). Key concepts include: In biopharmaceutical activity, both internal and external agglomeration economies have separate, positive impacts on location, with relevant differences by activity. Internal economies of agglomeration arise within an activity (such as among plants) and across activities (such as between manufacturing and sales). The effects of across-activity and within-activity internal economies vary by activity and type of organic expansion. Across-activity internal economies are asymmetric: For example, organic expansions of bio-sales activity seem to collocate with existing manufacturing establishments, but organic manufacturing expansions do not collocate with sales. Closed for comment; 0 Comments.
- 08 Jun 2012
- Working Paper Summaries
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. Key concepts include: Strategic interaction affects how firms locate. It is crucial to look beyond location traits and firm traits to consider the complex and critical influence of strategic interaction. The lens of strategic interaction helps explain not only one location decision at a point in time, but also a set of location decisions across time. A firm's operations abroad are an important source of sustainable competitive advantage in oligopolistic competition. This paper also provides a theoretical framework for understanding the mechanisms and constraints emerging from competition in product markets that regulate the number of contacts between firms across markets. Closed for comment; 0 Comments.
- 03 May 2012
- Working Paper Summaries
Learning by Supplying
Offshore outsourcing of manufacturing and related activities to China and other emerging economies is changing the competitive landscape in many industries. Some predict that lessons learned by emerging market firms in their role as suppliers to major branded producers will allow them to develop the capabilities necessary to become viable world-class competitors, possibly at the expense of current market leaders. In this paper Juan Alcacer and Joanne Oxley subject this "learning by supplying" hypothesis to the test, analyzing data on evolving technological and marketing capabilities of suppliers in the mobile handset industry. Contrary to some of the more alarmist commentary in the popular press, the researchers' observations suggest that the progression from trusted supplier to threatening competitor among electronics manufacturing firms is far from inevitable. Findings also point to the existence of quite distinct pathways to technological and market learning for suppliers. The divergent learning outcomes for suppliers serving operators and branded producers reinforce the idea that, while operators involve suppliers in all aspects of production, branded producers strictly limit access to customer-facing activities, thus reducing suppliers' opportunities for learning in this domain. Key concepts include: This paper provides the first systematic firm-level evidence of learning by supplying. It also contributes to developing understanding of firm boundaries and capabilities, particularly in emerging industries. Counter to received wisdom, the accumulation of technological capabilities is not a necessary or sufficient condition for successful introduction of own-brand products. There are significant switching costs and inertia in customer-supplier matches. Suppliers' choices of branded producers and operators may have a strong influence on suppliers' long-term capability development and strategic alternatives. Both the means and the motives for knowledge sharing are important in inter-firm arrangements. Suppliers working with leading branded producers may find themselves effectively locked into a subordinate role, thwarting ambitions to move up the value chain and develop as viable independent participants in the industry. Closed for comment; 0 Comments.
- 09 Jan 2012
- Research & Ideas
Location, Location, Location: The Strategy of Place
Business success in one geographic location doesn't necessarily follow a company to a new setting. Professor Juan Alcácer discusses the importance of taking a long-term strategic view. Key concepts include: Many companies think of geographic strategy as a short-term checkers match rather than as a long-term chess game. Establishing new locations is resource intensive, so a wrong decision can sap the energy out of an organization and cause it to lose focus. Open for comment; 0 Comments.
- 07 Apr 2010
- Working Paper Summaries
Location Strategies for Agglomeration Economies
Locations thick with similar economic activity expose firms to pools of skilled labor, specialized suppliers, and potential inter-firm knowledge spillovers that can provide firms with opportunities for competitive advantage. While certainly attractive, the lure of these agglomeration economies varies. Some firms should be wary of aiding their competitors by co-locating with them, for example, because each "agglomeration economy" differs in how readily competitors can leverage contributions made by others. HBS professor Juan Alcácer and Wilbur Chung of the University of Maryland develop a framework to better understand how firms respond to agglomeration economies. Key concepts include: Firms' location choices balance the perceived risk of aiding competitors with a recognition that some agglomeration economies will be of limited use to others. Firms, on average, place more value on pools of skilled labor and specialized suppliers than on potential knowledge inflows from competitors. The priority placed on labor and suppliers persists even for industries that are more R&D intensive. Economically larger firms are less attracted to industry employment, but more attracted to industry supplier activity. Closed for comment; 0 Comments.
- 25 Mar 2010
- Working Paper Summaries
Local R&D Strategies and Multi-location Firms: The Role of Internal Linkages
While geographic co-location has obvious benefits for firm innovation, it can also have serious drawbacks. HBS professor Juan Alcácer and Ross School of Business professor Minyuan Zhao explore how firms tap into the rich resources of technology clusters while protecting the value of their innovations. To understand R&D dynamics in a cluster, the scholars argue, we must recognize that a firm located in a particular cluster may also be part of an extended network, with its operations strategically integrated across multiple locations and multiple business lines. Key concepts include: When surrounded by direct competitors, the technology leaders in a cluster favor technologies that can be quickly developed internally, and more of their R&D projects involve researchers from other locations, particularly from primary R&D sites. Internal linkages across a firm protect firm knowledge from appropriation not only in countries where intellectual property rights protection is weak, but also in risky competitive environments in general. Closed for comment; 0 Comments.
- 26 Nov 2008
- Working Paper Summaries
Spanning the Institutional Abyss: The Intergovernmental Network and the Governance of Foreign Direct Investment
Economic globalization presents severe governance challenges. The insufficiency of states as a source of surety for transactions that transcend national borders creates an opportunity for an increased role for organizations in the global institutional framework. The authors of this paper applied a network methodology to show how one type of organization, the intergovernmental organization (IGO), facilitates the cross-border investments of another type, the multinational corporation (MNC). They further document the interdependence between domestic institutions, and international institutions represented by IGOs. The results help to understand and explain which countries attract FDI, and from which senders. Results also point to an emerging rivalry between states and organizations as sources of governance in the global economy. Key concepts include: The connections between states through both economic and social/cultural IGOs are positive and important influences on which states receive FDI from which other states. The network forged by international organizations is massively and increasingly influential in domestic and international governance. The interrelationship between domestic and international governance is more complex than previous accounts have recognized. Closed for comment; 0 Comments.
- 21 Nov 2008
- Working Paper Summaries
Applicant and Examiner Citations in U.S. Patents: An Overview and Analysis
The ready availability of patent citation data has been a tremendous boon to applied research on knowledge and innovation. The role of examiners in the generation of patent citations has been thought to potentially complicate these analyses, but has been difficult to study. Taking advantage of a change in the way patent citation data has been reported starting in 2001, this paper summarizes basic facts on examiner citations, and provides a descriptive analysis of factors associated with citations in a patent. Key concepts include: Patent citations reflect the complicated interaction of applicant and examiner strategies, capabilities, and incentives. Examiner shares are highest in fields where intellectual property tends to be fragmented (computers and communications, for example), and lowest in fields where patents have been shown to be more important in appropriating returns to research and development (such as biomedical and chemical patents). The most prolific patentees tend to have very high shares of examiner citations. Examiner citation shares are especially high for foreign firms. Closed for comment; 0 Comments.
IKEA Navigates the Future While Staying True to its Culture
After years of success in providing quality furniture at affordable prices, Swedish furniture maker IKEA is challenged by the rise of online shopping and changing consumer behavior, plus the arrival of a new leader. The company's top executives know they had to step out of their comfort zones and embrace new strategic initiatives to stay relevant. But which initiatives will best enable IKEA to evolve while staying true to the company’s core values? Harvard Business School professors Juan Alcacer and Cynthia Montgomery discuss navigating a new future while preserving the company’s culture and identity in their case, “Which IKEA Do We Want?” Open for comment; 0 Comments.