Working Papers
Competition As Strategic Interaction
Abstract—Strategic interaction has been a topic of scholarly inquiry dating back to the 1960s. Drawing on several seminal examples, we explore the nature of the concept, comparing it to other forms of competition in strategy and organizations. Next, we organize and review the findings of three ostensibly separate theoretical perspectives that have arisen from game theory, competitive dynamics, and institutional theory-each with its own assumptions, constructs, methods, and findings-and we identify core insights about how firms compete against one another in established markets. Based on our evaluation, we argue that a promising research opportunity for strategy lies in exploring how firms strategically interact in new markets and which moves are most effective in these contexts.
Entrepreneurial Beacons: The Yale Endowment, Run-ups, and the Growth of Venture Capital
Abstract—This paper investigates the social context of entrepreneurship in organizational sectors. Prior research suggests that firm foundings are driven by collective patterns of activity-that is, by patterns of prior foundings, of support from related markets, and of institutional activism in a given sector. Building on research on social salience and signals, we consider the influence of singular sector-level triggers, which we call entrepreneurial beacons. We argue that the actions or outcomes of salient organizations attract and motivate entrepreneurs, thus increasing the rate of foundings. To test this logic, we examine the impact of the Yale University endowment's investment choices and of venture-capital-backed IPO run-ups on venture-capital foundings between 1984 and 2011. The results pinpoint the aspects of the social environment that most heavily influence entrepreneurial activity and the dynamics of organizational sectors.
How Should We Pay for Health Care?
Abstract—Improving the way we pay for health care must be a central component in health care reform. Payment reform must link provider reimbursement and accountability to improving patient value: better health outcomes delivered at lower cost. Today's deeply flawed reimbursement approaches, however, fail this test. They actively discourage providers from delivering value to their patients. We believe that reimbursement through bundled payments is the only approach that aligns providers, payers, and suppliers in a healthy competition to increase patient value. A bundled payment is a single payment that covers all the procedures, tests, drugs, devices, and services involved in inpatient, outpatient, and rehabilitative care for a patient's medical condition. For chronic conditions and primary care, a bundled payment is a single payment to cover the care for the condition or population segment over a specified time period. The bundled payment should be contingent on achieving good outcomes for the patient, with the provider bearing financial responsibility for poor outcomes, such as avoidable complications.
Download working paper: http://www.hbs.edu/faculty/Publication%20Files/15-041_1af09bde-47f9-4364-bad6-aaac464be909.pdf
Cases & Course Materials
- Harvard Business School Case 715-008
The United Kingdom and the Means to Prosperity
After struggling through the country's longest recession since 2008, the UK was expected to grow faster than any other G7 nation in 2014. Analysts wondered whether the return to growth was because, or in spite of, Prime Minister David Cameron's controversial £113 billion austerity plan introduced in 2010. Despite the positive upturn in the economy, UK policymakers still faced challenges with rapidly rising income inequality, an economy dominated by the financial sector, a possible housing bubble, and an approaching referendum on Scotland's independence. Moreover, many claimed the UK was at risk of secular stagnation, a slowdown in economic growth caused by a structural deficiency in demand. What could the government do to put the country on a sustained and balanced growth trajectory?
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- Harvard Business School Case 514-078
Ghurka
Ghurka was a 38-year-old luxury leather goods brand that specialized in leather and twill luggage, handbags, and accessories. Brightwork Brand Holdings Corp. acquired it as an asset purchase in 2011. Ghurka, under CEO John Reuter, worked to re-launch the brand with a ten-year, three-phase growth plan. The company aimed to be profitable by 2016. Management worked to address challenges surrounding the role of wholesaling, Ghurka's advertising strategy, and leather sourcing issues.
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- Harvard Business School Case 815-070
The Grommet
The Grommet, an online product launch platform, was at the brink of scaling its business. The Grommet's daily launch and sale of innovative consumer products, using personal videos created by product makers, had led to its initial success. In 2014, the company launched The Grommet Wholesale, a similar platform targeting retailers. Was this the best way to capture more of the value the company created for makers?
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- Harvard Business School Case 715-432
Group Functions at the Maersk Group
In 2014, seven years after he was appointed CEO of the Danish shipping and oil conglomerate A.P. Møller Maersk (the Maersk Group), Nils Andersen was reexamining the size and role of corporate headquarters in the company he had reshaped as a "premium conglomerate." During his tenure, Andersen had divided what had previously been operated as almost a single entity into separate lines of business, each accountable for its own performance and expected to deal at arms-length with its "sister" businesses, while substantially reducing the size and functions of the corporate headquarters. But as the business units (BUs) and corporate headquarters adjusted to their new roles, new issues surfaced.
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- Harvard Business School Case 715-019
A Currency We Can Call Our Own: Populism, Banking Crises, and Exchange Rate Crises in Argentina, 1946-2002
The case describes Argentina's struggle to establish a credible monetary system under populist pressures and the recurrent use of exchange rate stabilization plans. It focuses on two episodes where there was "too little money" in the economy: during the hyperinflation episodes during the late 1980s, when money demand collapsed, and the early 2000s, when the supply of money collapsed under a hard currency peg.
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- Harvard Business School Case 814-050
GenapSys: Business Models for the Genome
GenapSys, a California-based startup, was soon to release a new DNA sequencer that the company's founder, Hesaam Esfandyarpour, believed was truly revolutionary. The sequencer would be substantially less expensive-potentially costing just a few thousand dollars-and smaller than other sequencers, many of which were large devices costing tens of thousands or hundreds of thousands of dollars. GenapSys' device, named GENIUS, could also quickly generate large amounts of data, as it was capable of sequencing an entire human genome in less than eight hours. At this price, GenapSys' device would be attractive to customers that had been unable to afford sequencers, such as smaller laboratories or hospitals, and even expand the market to include industries such as agriculture and biofuels. As GenapSys came closer to releasing its product, Esfandyarpour and his Senior Director of Operations and Strategy, Leila Rastegar (HBS '11), sat down to decide which of three business models they would choose to bring this device to market. In the first model, the company would sell sequencers at a higher price to those entities that already purchased sequencers, primarily major research labs and pharmaceutical firms, but position its machine as a faster alternative to existing technologies. In the second model, GenapSys would sell its sequencer at a lower price but charge more for the cartridges necessary to run a sample and earn its primary revenue from these cartridges. The third model would see GenapSys sell its device at or around cost, but use the data customers generated to create a proprietary database of genetic information. Customers could pay to access the database for research, to create genetic tests, or for many other purposes. GenapSys would also build an online store with the genetic tests customers created. Esfandyarpour's and Rastegar's decision would determine GenapSys' customer base and financial position for the coming years and also impact development and capital needs of the firm. Which was the right model to bring the device to market and have a meaningful impact?
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- Harvard Business School Case 515-074
The Blonde Salad
In 2014, Chiara Ferragni, a globe-trotting founder of the world's most popular fashion blog "The Blonde Salad," had to decide how to best monetize her blog as well as her shoe line called the "Chiara Ferragni Collection." A year earlier, Ferragni, together with her team, had already made a decision to transform her blog into an online lifestyle magazine and to build its positioning as a high-end brand. It meant that "The Blonde Salad" envisaged to only cooperate with a limited number of luxury fashion advertisers, inevitably reducing the blog's revenues. Ferragni considered changing the revenue-generating model by incorporating an online market place within "The Blonde Salad," but which strategy and timeline would she need to achieve her aim? Should Ferragni's shoe line, a separate company with a different ownership structure, be merged with "The Blonde Salad" or was it desirable to keep the two apart?
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- Harvard Business School Case 715-414
BRAC in 2014
In the early 1970s BRAC was a startup nongovernmental organization (NGO) working in Bangladesh. By 2014, it was the world's largest NGO. It had a strong presence in Bangladesh and had begun to deliver social development programs in nine other countries. Its founder and chairperson, Fazle Hasan Abed, was knighted in 2010 by the British Crown for his service in reducing poverty. The organization took a holistic approach to alleviating poverty, which depended on providing the poor with a portfolio of services including education, agriculture development, healthcare, community empowerment, and microfinance. Around 70% of the funding to deliver BRAC's development programs and services came from its own for-profit social enterprises. The case study allows students to examine the organization's evolution and its business model.
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- Harvard Business School Case 515-015
CJ E&M: Creating a K-Culture in the U.S.
Buoyed by the success of K-pop music and K-drama television shows in Asian countries, Chairman Jay Lee, of the South Korean conglomerate CJ Group, believed that the time was ripe for taking Korean cultural content to the West. One initiative, carried out by the Group's Entertainment & Media (E&M) division, was a daylong fan convention called KCON that was held in Irvine, California, in October 2012 and featured various Korean cultural elements, such as music, dance, film, and food. In the spring of 2013, Miky Lee, the Group's Vice Chairman (VC), called a meeting with key executives to review the results of KCON 2012 and make a recommendation to the chairman on whether to hold a similar event in 2013. As part of their deliberations, the executives were expected to consider where a potential 2013 convention should be held, which artists to invite, which target consumers to focus on, how to price tickets, and how to attract more sponsors. With KCON 2012 having lost money, despite a robust turnout, it was far from clear whether to repeat the event and, if so, whether its scale should be expanded beyond 2012's $1.1 million budget. With CJ recently opening a chain of mid-market Korean food restaurants in the Los Angeles area called Bibigo, the meeting would also touch on the restaurant's U.S. growth plans and how they might be connected to KCON. More broadly, the executives had to wrestle with the question of whether Americans would ever really embrace Hallyu, the Korean Wave, beyond one-off success stories like PSY's "Gangnam Style." And even if they believed so, was KCON the right vehicle to make it happen, or was the event just a waste of the company's time and money?
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- Harvard Business School Case 715-435
Walmart: Segmenting Social Impact
This case provides a sample of Walmart's social engagement activities and asks students to categorize each as philanthropy, corporate social responsibility, or creating shared value.
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- Harvard Business School Case 715-024
Bhutan: Governing for Happiness
Unique among the world's countries, the Himalayan Kingdom of Bhutan had abandoned the traditional policy goal of increasing Gross Domestic Product (GDP) in favor of pursuing Gross National Happiness (GNH). Famously, Bhutan ranked highly on lists of the happiest countries in spite of a tumultuous history, low life expectancy, a dismal literacy rate, a small and undiversified economy, and low GDP per capita. Everyone, it seemed, from tourists and Hollywood screenwriters to leading development economists, looked to Bhutan for enlightenment and perspective on crises both personal and global. GNH had become the country's brand and suggested a possible future for capitalism. Was Bhutan on to something? Was there really a tradeoff between growth and happiness, and, if so, was it acceptable? In early 2014, Bhutan's newly minted Prime Minister Tshering Tobgay was faced with these questions as he deliberated on whether to approve a massive new Bhutanese-Indian hydropower collaboration that experts argued would provide energy, foreign exchange, and invaluable jobs, but which also risked undermining the country's brand as well as its happiness.
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- Harvard Business School Case 714-029
Obamacare
One vote in June, 2012, decided the fate of President Barack Obama's crowning first-term achievement: universal health insurance. Chief Justice John Roberts of the U.S. Supreme Court cast the deciding vote to uphold the keystone of the reform: the mandate to purchase insurance. That mandate had a convoluted history. Though born in a conservative think-tank and originally adopted by Republican leaders as a necessary component of reform, it was rejected by Republicans when taken on board by the president and Democrats. Roberts' decision rested on an interpretation of the mandate as a tax.
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