First Look

May 13, 2008

Buy-side firm analysts make more optimistic and less accurate forecasts than their counterparts on the sell-side, according to new research by Harvard Business School's Boris Groysberg, Paul M. Healy, and Craig James Chapman. Their study is described in a forthcoming issue of the Financial Analysts Journal. Among the cases out this week, BP must reassess its corporate strategy around global climate change, and the Inner Mongolia Yili Group seeks to blaze a trail in the world's dairy industry, starting with the 2008 Olympic Games in Beijing. A note titled "Identifying and Exploiting the Right Entrepreneurial Opportunity... For You" offers advice on forming critical personal and business decisions.
— Martha Lagace

Working Papers

Some Neglected Axioms in Fair Division


Conditions one might impose on fair allocation procedures are introduced. Nondiscrimination requires that agents share an item in proportion to their entitlements if they receive nothing else. The "price" procedures of Pratt (2007), including the Nash bargaining procedure, satisfy this. Other prominent efficient procedures do not. In two-agent problems, reducing the feasible set between the solution and one agent's maximum point increases the utility cost to that agent of providing any given utility gain to the other and is equivalent to decreasing the dispersion of the latter's values for the items he does not receive without changing their total. One-agent monotonicity requires that such a change should not hurt the first agent, limited monotonicity that the solution should not change. For prices, the former implies convexity in the smaller of the two valuations, the latter linearity. In either case, the price is at least their average and hence spiteful.

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Marketing Metaphoria: What Deep Metaphors Reveal About the Minds of Consumers


Why do advertising campaigns and new products often fail? Why do consumers feel that companies don't understand their needs? Because marketers themselves don't think deeply about consumers' innermost thoughts and feelings. Marketing Metaphoria is a groundbreaking book that reveals how to overcome this "depth deficit" and find the universal drivers of human behavior so vital to a firm's success. Marketing Metaphoria reveals the powerful unconscious viewing lenses—called "deep metaphors"—that shape what people think, hear, say, and do. Drawing on thousands of one-on-one interviews in more than thirty countries, Gerald Zaltman and Lindsay Zaltman describe how some of the world's most successful companies as well as small firms, not-for-profits, and social enterprises have successfully leveraged deep metaphors to solve a wide variety of marketing problems. Marketing Metaphoria should convince you that everything consumers think and do is influenced at unconscious levels—and it will give you access to those deeper levels of thinking.

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Do Buy-Side Analysts Earnings Forecasts Out-Perform Those of the Sell-Side?


We compare the earnings forecast performance of analysts at a large buy-side firm to that of sell-side analysts. Our tests show that the buy-side firm analysts make more optimistic and less accurate forecasts than their counterparts on the sell-side. These performance differences appear to be partially explained by the buy-side's higher retention of poor-performing analysts and by differences in performance benchmarks used to evaluate buy- and sell-side analysts.


Cases & Course Materials

Codman Academy: Beyond the Start-up Phase

Harvard Business School Case 308-072

As it entered its seventh academic year, Codman Academy, an expeditionary learning charter school located in Dorchester, Massachusetts, was reflecting on its successes and challenges. The school had succeeded in placing every member of its most recent graduating class in college. However, recent changes to the state's accountability system necessitated greater focus on helping Codman Academy students meet this graduation requirement. Codman Academy's founding, academic model, leadership, and partnerships (including its unique relationship and location within a community-based health center) are also discussed.

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Global Climate Change and BP

Harvard Business School Case 708-026

Following the sudden resignation of Sir John Browne, Tony Hayward, BP CEO, must decide how global climate change management will figure into BP's corporate strategy. Climate change management was a major part of BP's strategy under Browne: In 1997 Browne broke from his colleagues, publicly declaring that global climate change was a serious problem and pledging BP to play a significant role in the search for solutions. BP successfully reduced its own carbon emissions, and championed cap-and-trade style regulation over taxation or command-and-control. Despite this progress, as the climate issue gains in political prominence and the Kyoto Protocol nears expiration, Hayward must consider what actions to take in BP's business strategy and in the political arena to manage ongoing climate risk.

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Go Mobile

Harvard Business School Case 508-023

No abstract is available at this time.

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Identifying and Exploiting the Right Entrepreneurial Opportunity...For You

Harvard Business School Case 808-043

This note provides an analytical framework for assessing potential opportunities in the context of an entrepreneur's life. The framework has two parts—a business analysis and a personal analysis—each comprised of a set of yes/no questions for critical assessment criteria. The note also offers perspectives on entrepreneurship, observations about combining an entrepreneurial career with your personal life, and comments about the pursuit of opportunities in general.

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Inner Mongolia Yili Group: China's Pioneering Dairy Brand

Harvard Business School Case 308-052

Setting up the goal to become one of the top 20 enterprises in the world dairy industry by 2010, the Inner Mongolia Yili Group had ambitious plans. As one of China's biggest national dairy companies, its main challenge was competing as a local company against joint-venture rivals who benefited from perks granted to "foreign" companies. To set itself apart, Yili focused on research and development and innovative ways to improve the industry. Proving that it could shift industry standards and lead a country not accustomed to dairy consumption, to a point where demand is outpacing supply, the Yili Group is making its mark to go global. As an Official Sponsor of the 2008 Olympic Games in Beijing and the Official dairy supplier of the games, it is betting that the brand can go further beyond China. Will the day that tykes from Topeka have a bottle of Yili milk in their hands be coming soon?

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Monitor's Opportunities in India (B): Grail Research

Harvard Business School Supplement 708-483

Supplements the (A) case. Describes the decision by leaders of a strategy consulting firm to build a business research subsidiary in India. Permits a discussion of how high-end knowledge production can be conducted in an emerging economy, at a distance from buyers of the knowledge.

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Sony PlayStation 3: Game Over?

Harvard Business School Case 508-076

Outlines the challenges faced by Sony with the launch of its PlayStation 3. Information based on the 2006 and 2007 holiday seasons and the success of rival consoles is outlined. In addition, the case allows examining the costs and revenues associated with a business model based on the sale of the hardware and game titles. Can be used with "Home Video Games: Generation Seven" (505-072), which provides supplementary information on the industry.

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