Working Papers
To Groupon or Not to Groupon: The Profitability of Deep Discounts
| Authors: | Benjamin Edelman, Sonia Jaffe, and Scott Duke Kominers |
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Abstract
We examine the profitability and implications of online discount vouchers, a new marketing tool that offers consumers large discounts when they prepay for participating merchants' goods and services. Within a model of repeat experience good purchase, we examine two mechanisms by which a discount voucher service can benefit affiliated merchants: price discrimination and advertising. For vouchers to provide successful price discrimination, the valuations of consumers who have access to vouchers must systematically differ from—and typically be lower than—those of consumers who do not have access to vouchers. Offering vouchers is more profitable for merchants that are patient or relatively unknown and for merchants with low marginal costs. Extensions to our model accommodate the possibilities of multiple voucher purchases and merchant price re-optimization.
Download the paper: http://www.hbs.edu/research/pdf/11-063.pdf
Organizations in the Shadow of Communities
| Authors: | Siobhan O'Mahony and Karim R. Lakhani |
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Abstract
The concept of a community form is drawn upon in many subfields of organizational theory. Although there is not much convergence on a level of analysis, there is convergence on a mode of action that is increasingly relevant to a knowledge-based economy marked by porous and shifting organizational boundaries. We argue that communities play an underappreciated role in organizational theory—critical not only to occupational identity, knowledge transfer, sense-making, social support, innovation, problem-solving, and collective action but, enabled by information technology, increasingly providing socio-economic value-in areas once inhabited by organizations alone. Hence we posit that organizations may be in the shadow of communities. Rather than push for a common definition, we link communities to an organization's evolution: its birth, growth, and death. We show that communities represent both opportunities and threats to organizations and conclude with a research agenda that more fully accounts for the potential of community forms to be a creator (and a possible destroyer) of value for organizations.
Download the paper: http://www.hbs.edu/research/pdf/11-131.pdf
Network Effects in Countries' Adoption of IFRS
| Authors: | Karthik Ramanna and Ewa Sletten |
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Abstract
If the differences in accounting standards across countries reflect relatively stable institutional differences (e.g., auditing technology, the rule of law, etc.), why did several countries rapidly, albeit in a staggered manner, adopt IFRS over local standards in the 2003-2008 period? We test the hypothesis that perceived network benefits from the extant worldwide adoption of IFRS can explain part of countries' shift away from local accounting standards. That is, as more jurisdictions with economic ties to a given country adopt IFRS, perceived benefits from lowering transactions costs to foreign financial-statement users increase and contribute significantly towards the country's decision to adopt IFRS. We find that perceived network benefits increase the degree of IFRS harmonization among countries, and that smaller countries have a differentially higher response to these benefits. The results, robust to numerous alternative hypotheses and specifications, suggest IFRS adoption is self-reinforcing, which, in turn, has implications for the consequences of IFRS adoption.
Download the paper: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1590245
Cases & Course Materials
Book Publishing in 2010
Stephen P. Bradley and Nancy Bartlett
Harvard Business School Note 711-419
Legacy book publishers wrangled with e-book retailers over royalty rates, release strategy, and distribution rights as customer demand for cheaper e-books eroded publishers' profitable print formats. E-readers like Kindle, as well as Apple's iPad, that invigorated the digital book market are discussed. Also includes a general overview of book publishing including the K-12 and college market.
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Television Competes for a Digital Audience
Stephen P. Bradley and Nancy Bartlett
Harvard Business School Note 710-476
In the face of major disruption in the industry, television networks have sought new revenue sources, implemented cost-cutting measures, and strategized on ways to monetize online access to content. Programming changes, new advertising strategies, and deals via online distribution platforms are presented as means to capture the value of online video consumption.
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http://cb.hbsp.harvard.edu/cb/product/710476-PDF-ENG
Triangulate
Thomas R. Eisenmann and Lauren Barley
Harvard Business School Case 811-055
In October 2010, Triangulate's founder/CEO must determine what product features to develop and what marketing programs to pursue in order to boost the odds of successfully raising another venture capital round for his nine-month-old Facebook dating application. The case recounts the process of launching a consumer Internet startup, from idea conception through initial efforts to validate the concept, followed by product launch and subsequent business model "pivots."
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Caterpillar, Inc. (A)
David F. Hawkins
Harvard Business School Case 111-031
2010 Healthcare Reform Act eliminates Medicare Part D subsidy and Caterpillar recognizes a $100 million change.
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Caterpillar, Inc. (B)
David F. Hawkins
Harvard Business School Supplement 111-032
Analyst must identify role of management and actuarial judgment in measuring corporate post-employment benefit obligations and assets.
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Caterpillar, Inc. (C)
David F. Hawkins
Harvard Business School Supplement 111-088
IASB proposes new defined benefit plan accounting standard.
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Aluar: Aluminio Argentino S.A. (A)
David F. Hawkins, Hernan Etiennot, Gustavo A. Herrero, and Cintra Scott
Harvard Business School Case 111-059
Argentine government claims inflation rate is 8%, but others claim it is double that rate. Analyst attempts to adjust the company's financial statements for inflation.
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Aluar: Aluminio Argentino S.A. (B)
David F. Hawkins, Hernan Etiennot, Gustavo A. Herrero, and Hugo Pentenero
Harvard Business School Supplement 111-070
Analyst restates Aluar's financial statements to account for inflation. Students are asked to critique the method used.
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Kaweyan: Female Entrepreneurship and the Past and Future of Afghanistan
Geoffrey G. Jones and Gayle Tzemach Lemmon
Harvard Business School Case 811-023
Explores the challenges of female entrepreneurship in Afghanistan through the case of Kemeli Sediqi who built a business under the Taliban and founded a consultancy in 2004. The case positions Sediqi's experiences against the background of Afghanistan's turbulent history, with a focus on the contested role of women in Afghani society.
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Nanda Home: Preparing for Life after Clocky
Elie Ofek and Jill Avery
Harvard Business School Case 511-134
Gauri Nanda, the inventor of Clocky, the alarm clock that rolls off the bed stand and forces its owner to find it, has to make critical decisions regarding the future of her nascent company. As sales of Clocky show signs of declining, she must decide whether to continue her focus on the alarm clock category or to branch out into new categories. If the former, the question is which segments to pursue and what features to develop, and, if the latter, the question is whether the concept of "humanizing technology" is something consumers would value in other domains. In addition, Nanda must decide how to continue marketing Clocky and its successors, given the potential for cannibalization. Clocky's success was largely attributable to the media's intense interest and coverage, and it is not clear such attention would carry over to other new product endeavors. Students are presented with a number of new product concepts and the findings from both qualitative and quantitative market research. This allows for a rich discussion of how managers can think creatively about consumer experiences to inform their innovation strategies.
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Aman Resorts
Eugene Soltes and Aldo Sesia
Harvard Business School Case 111-012
Aman Resorts describes the operating model and philosophy of this high-end set of global properties. Aman relies on employees taking considerable initiative to deliver the highest quality personalized service in the hospitality industry. The case also highlights Aman's strategy and operations which differ in many ways from industry standards.
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http://cb.hbsp.harvard.edu/cb/product/111012-PDF-ENG
Aman Resorts (B)
faculty names
Harvard Business School Supplement 111-015
This case describes how employees are rewarded and compensated and is a supplement to "Aman Resorts."
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Fixed Income Arbitrage in a Financial Crisis (A): U.S. Treasuries in November 2008
Ryan D. Taliaferro and Stephen Blyth
Harvard Business School Case 211-049
Investment manager James Franey confronts an apparent arbitrage opportunity during the global financial crisis of 2008 when he notices a wide yield spread between two U.S. Treasury bonds that mature on the same date. Franey must decide if there is an opportunity, how to structure a trade to exploit it, and how much of his fund's capital to allocate. Case exposition includes considerable detail on financing arrangements, particularly short-selling, margin lending, and repurchase agreements, that support relative-value strategies. Careful attention is paid to the bond math calculations that support the protagonist's analysis and decision. All quoted prices in the case are real and historical, and corresponding Bloomberg commands are provided for each as footnotes.
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Fixed Income Arbitrage in a Financial Crisis (B): U.S. Treasuries in December 2008
Ryan D. Taliaferro and Stephen Blyth
Harvard Business School Supplement 211-050
The (B) case briefly recounts the action that investment manager James Franey takes in the matter of two U.S. Treasury bonds with identical maturity dates but widely different yields. He must decide what to do next.
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Fixed Income Arbitrage in a Financial Crisis (C): TED Spread and Swap Spread in November 2008
Ryan D. Taliaferro and Stephen Blyth
Harvard Business School Supplement 211-051
Investment manager Albert Mills confronts an apparent arbitrage opportunity during the global financial crisis of 2008 when he notices an unusually low—and briefly negative—30-year U.S. dollar fixed-floating swap spread. Mills must decide if there is an opportunity, how to structure a trade to exploit it, and how much of his fund's capital to allocate. Case exposition includes descriptions of fixed-floating swaps, important interest rates and spreads (LIBOR, TED spread, swap spread), and financing arrangements, particularly repurchase agreements, that support relative-value strategies. Attention also is paid to bond math calculations that support the protagonist's analysis and decision. All quoted prices in the case are real and historical, and corresponding Bloomberg commands are provided for each as footnotes.
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http://cb.hbsp.harvard.edu/cb/product/211051-PDF-ENG
Fixed Income Arbitrage in a Financial Crisis (D): TED Spread and Swap Spread in May 2009
Ryan D. Taliaferro and Stephen Blyth
Harvard Business School Supplement 211-052
The (D) case briefly recounts the action that investment manager Albert Mills takes in the matter of an unusually low U.S. dollar fixed-floating swap spread. He must decide what to do next.
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http://cb.hbsp.harvard.edu/cb/product/211052-PDF-ENG
Scientific Glass, Inc.: Inventory Management
Steven Wheelwright and William Schmidt
Harvard Business School Brief Case No. 4208
TScientific Glassware is a fast-growing, privately held company that provides specialized glassware for laboratory and research facilities. Excess inventory is tying up extra capital needed to fund the company's expansion plans. The newly hired manager of inventory planning is tasked with developing an effective strategy for managing inventory without requiring additional capital investment. The company has launched several initiatives, such as adding a dedicated domestic sales force, which directly affect inventory requirements. At the same time, the company has announced a commitment to improve customer responsiveness and reduce the "fill rate," the time it takes to fulfill new orders. These changes may require adding warehouses or outsourcing fulfillment services. This case focuses on the business challenges of inventory control and order processing, particularly the tradeoffs between centralized and decentralized inventories. Students must complete a quantitative analysis of the costs and benefits of several alternatives.
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http://cb.hbsp.harvard.edu/cb/product/4208-PDF-ENG