First Look

December 19, 2017

Among the highlights included in new research papers, case studies, articles, and books released this week by Harvard Business School faculty:

Creating the organic wine market

“A case study of failed category creation.” That’s how Geoffrey Jones and Emily Grandjean describe their new working paper on the history of organic wine. One problem: inconsistent yet consistently confusing regulatory standards. “The development of organic wine in countries with different winemaking traditions resulted in little common agreement regarding the definition of ‘organic’ wine,” they write. “In the United States organic certification schemes excluded the use of sulfites, while in Europe some use was permitted. For winemakers, distributors and retailers, navigating the complex layers of regulations regarding organic wine was enormously time intensive.” Creating the Market for Organic Wine: Sulfites, Certification, and Green Values.

Changing attitudes about war

We can influence attitudes about violent conflict simply by framing wartime experiences as “suffering” vs. “sacrifice,” or vice versa, according to a new working paper by Kristin Fabbe, Chad Hazlett and Tolga Sinmazdemir. Examining data from a survey of 1,120 Syrian refugees in Turkey, they find that 18 percent more people agree to the idea of a peaceful resolution when violence is framed as “suffering” rather than “sacrifice,” and 10 percent more agree to peace “when it is proposed by a civilian community member rather than the enemy or an armed actor.” Framing Violence, Finding Peace.

Understanding precision medicines

“Precision medicines—therapies that rely on genetic, epigenetic, and protein biomarkers—create a better match between individuals with specific disease subtypes and medications that are more effective for those patients,” write Amitabh Chandra, Craig Garthwaite, and Ariel Dora Stern in a new working paper. To gain a better understanding of the landscape surrounding these promising therapies, they analyze a database of more than 130,000 clinical trials over the past two decades. Characterizing the Drug Development Pipeline for Precision Medicines.

Other new publications from Harvard Business School faculty are listed below.

— Carmen Nobel
 
  • forthcoming
  • Economic Journal (Royal Economic Society)

Increasing the Electoral Participation of Immigrants: Experimental Evidence from France

By: Pons, Vincent, and Guillaume Liegey

Abstract—Improving the political participation of immigrants could advance their interests and foster their integration into receiving countries. In this study, 23,800 citizens were randomly assigned to receive visits from political activists during the lead-up to the 2010 French regional elections. Treatment increased the turnout of immigrants without having any statistically significant effect on non-immigrants, while turnout was roughly equal in the control group. A postelectoral survey reveals that immigrants initially had less political information, which could explain the heterogeneous impact. Although the effect decays over subsequent elections, our findings suggest that voter outreach efforts can successfully increase immigrants' political participation, even when they do not specifically target their communities and concerns.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=53575

  • November 28, 2017
  • athenaInsight

The No-excuses Way to Manage Healthcare Growth

By: Schlesinger, Len

Abstract—No abstract available.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=53633

Characterizing the Drug Development Pipeline for Precision Medicines

By: Chandra, Amitabh, Craig Garthwaite, and Ariel Dora Stern

Abstract—Precision medicines—therapies that rely on genetic, epigenetic, and protein biomarkers—create a better match between individuals with specific disease subtypes and medications that are more effective for those patients. These treatments are expected to be both more effective and more expensive than conventional therapies, implying that their introduction is likely to have a meaningful effect on health care spending patterns. In addition, precision medicines can change the expected profitability of therapies both by allowing more sophisticated pricing systems and potentially decreasing the costs of drug development through shorter and more focused trials. As a result, this could change the types of products that can be profitably brought to market. To better understand the landscape of precision medicines, we use a comprehensive database of over 130,000 global clinical trials over the past two decades. We identify clinical trials for likely precision medicines (LPMs) as those that use one or more relevant biomarkers. We then further segment trials based on the nature of the biomarker(s) used and other trial features with economic implications. Given potential changes in the incentives for bringing products to market, we also examine the relative importance of public agencies such as the National Institutes of Health (NIH) and different types of private firms in developing precision medicines.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=53560

Abstract—How does violence during conflict affect the political attitudes of civilians who leave the conflict zone? Using a survey of 1,384 Syrian refugees in Turkey, we employ a natural experiment owing to the inaccuracy of barrel bombs to examine the effect of having one's home destroyed on political and community loyalties. We find that refugees who lose a home to barrel bombing, while more likely to feel threatened by the Assad regime, are less supportive of the opposition and instead are more likely to say no armed group in the conflict represents them—opposite to what is expected when civilians are captive in the conflict zone and must choose sides for their protection. Respondents also show heightened volunteership towards fellow refugees. Altogether, this suggests that when civilians flee the conflict zone, they withdraw support from all armed groups rather than choosing sides, instead showing solidarity with their civilian community.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=53274

Framing Violence, Finding Peace

By: Fabbe, Kristin, Chad Hazlett, and Tolga Sinmazdemir

Abstract—Attitudes toward the acceptability of settling with one's enemies versus the need to continue fighting for an all out victory are central to the course of any conflict and its legacy. On the one hand, in cases where massive violence is perpetrated against civilian populations, one expects such attitudes to be sacrosanct and nearly inalterable, perhaps for generations to come. On the other hand, even these attitudes may be informed by social cues that interpret violence in different ways and that signal who in the community supports peace. We test the malleability of these attitudes using a survey of Syrian refugees in Turkey conducted in 2016 by asking two questions: (i) Does the framing of wartime experience as “suffering” verses “sacrifice” shift attitudes about acceptable conflict outcomes? (ii) How does the identity of those proposing a peace settlement shape individuals' willingness to accept it? We examine both questions through survey experiments and find that attitudes toward peace can in fact be widely influenced by these factors in a survey setting: 18%more people agree to peace when violence is framed as “suffering” rather than “sacrifice,” and 10% more agree to peace when it is proposed by a civilian community member rather than the enemy or an armed actor. Beyond the theoretical value of this result for understanding reactions to violence among communities and individuals, it suggests useful policy tools for peacemakers.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=53636

Abstract—Using the farm tractor as a case study, I show that lags in technology diffusion arise along two distinct margins, which I term scale and scope. Though tractors are now used in nearly every agricultural field operation and in the production of nearly all crops, they first developed with much more limited application. Early diffusion was accordingly rapid in these narrower applications, but it was limited in scope until tractor technology generalized. The sequence of diffusion is consistent with a model of R&D in specific- versus general-purpose attributes and with other historical examples, suggesting that the key to understanding technology diffusion lies not only in explaining the number of different users, but also in explaining the number of different uses.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=49447

Abstract—This working paper examines the history of organic wine, which provides a case study of failed category creation. The modern organic wine industry emerged during the 1970s in the United States and Western Europe, but it struggled to gain traction compared to other organic food and drink products, including organic tea. Early experiments performed by less-savvy winemakers created a negative reputation for organic wine, which proved a challenge to overcome. Early organic winemakers were often derided for their efforts, as conventional winemakers felt threatened by their claims to be more “natural” or healthful than conventional wines. Making matters more difficult, organic winemaking required a sophisticated understanding of complex environmental and chemical processes in the vineyard and winery, and organic wines typically did not command a premium in the marketplace despite their often higher costs of production. The development of organic wine in countries with different winemaking traditions resulted in little common agreement regarding the definition of “organic” wine. After heated debate regarding the use of sulfites, differing organic wine standards emerged. In the United States organic certification schemes excluded the use of sulfites, while in Europe some use was permitted. For winemakers, distributors and retailers, navigating the complex layers of regulations regarding organic wine was enormously time intensive. Many winemakers chose to forego organic certification so as to avoid the perceived financial and time costs. Organic wine finally attained niche popularity in the 2010s, mainly in northwest Europe and in cosmopolitan global cities elsewhere, as fine-dining restaurants like Noma sought wines with clear terroir. Organic wine remained a tiny percentage of the world wine market. There remained huge differences between countries in consumption of organic wine. The market for organic wine was far larger in Sweden, a country with 9 million inhabitants, than in the United States, with 326 million.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=53619

The Perils of Voter Mobilization

By: Marx, Benjamin, Vincent Pons, and Tavneet Suri

Abstract—Voter mobilization campaigns face trade-offs in young democracies. In a large-scale experiment implemented in 2013 with the Kenyan Electoral Commission (IEBC), text messages intended to mobilize voters boosted participation but also decreased trust in electoral institutions after the election, a decrease that was stronger in areas that experienced election-related violence as well as with individuals on the losing side of the election. The mobilization backfired because the IEBC promised an electronic voting system that failed, resulting in manual voting and tallying delays. Using a simple model, we show signaling high institutional capacity via a mobilization campaign can negatively affect beliefs about the fairness of the election.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=53438

No abstract available.

Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/718022-PDF-ENG

  • Harvard Business School Case 218-046

Quantopian: A New Model for Active Management

No abstract available.

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https://cb.hbsp.harvard.edu/cbmp/product/218046-PDF-ENG

No abstract available.

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https://cb.hbsp.harvard.edu/cbmp/product/717038-PDF-ENG

  • Harvard Business School Case 618-024

Driving Towards a Disruption? (B)

This (B) case is an update to HBS No. 612-101, “Driving Towards a Disruption?” It looks at recent changes made at HBS to support online learning initiatives.

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https://cb.hbsp.harvard.edu/cbmp/product/618024-PDF-ENG

  • Harvard Business School Case 517-115

Predicting Consumer Tastes with Big Data at Gap

CEO Art Peck was eliminating his creative directors for The Gap, Old Navy, and Banana Republic brands and promoting a collective creative ecosystem fueled by the input of big data. Rather than relying on artistic vision, Peck wanted the company to use the mining of big data obtained from Google Analytics and the company’s own sales and customer databases to select the next season’s assortment. Peck was betting that intelligence fueled by big data could outperform a fashion industry creative director at predicting the future fashion trends and tastes of consumers.

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https://cb.hbsp.harvard.edu/cbmp/product/517115-PDF-ENG

  • Harvard Business School Case 517-100

1436: The First Pure Chinese Luxury Fashion Brand?

The case traces the birth of 1436, a new luxury brand specializing in cashmere garments. It describes how this venture emerged organically out of a combination of manufacturing and retail expertise with the ambition of creating the first pure Chinese luxury brand. The brand name was inspired by the measurement of superfine baby cashmere fibre (14 micrometers in diameter and 36 millimeters in length). It is estimated that only 2 out of 1,000 grams of cashmere measure up to the standard of 1436. Describing the brand evolution over its first 8 years of existence, the case allows for an exploration of the challenges associated with creating a luxury brand and reconciling several strategic imperatives: the need to build a strong and desirable brand identity, grow the business but also protect the brand integrity and exclusivity. The case also provides an opportunity to discuss the benefits and challenges associated with being 1) a luxury brand “made in China” and 2) a category specialist (cashmere). As Jane Wang, 1436’s founder and CEO, looks to the future, she has to decide what to do to establish 1436 as a recognized luxury brand on a global scale.

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https://cb.hbsp.harvard.edu/cbmp/product/517100-PDF-ENG

  • Harvard Business School Case 818-042

NetDragon

No abstract available.

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https://cb.hbsp.harvard.edu/cbmp/product/818042-PDF-ENG

  • Harvard Business School Case 918-005

Paktor: Designing a Dating App

Paktor is a popular mobile-based online dating app from Singapore, where a user can swipe right or left on a profile to indicate her interest in a potential match. The case is designed to explore issues related to pricing, market design, and launch strategies in the context of online marketplaces. Students are asked to evaluate Paktor’s existing design features and pricing and formulate recommendations on design choices, pricing, and global expansion.

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https://cb.hbsp.harvard.edu/cbmp/product/918005-PDF-ENG

No abstract available.

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https://cb.hbsp.harvard.edu/cbmp/product/717052-PDF-ENG

Founders Vineet and Anupama Nayar had rapidly scaled their foundation to reach 3 million primary school children (grades 1 to 3) in two states with math and English programs. Their goal was to reach 10 million children by 2025 and completely spend down the $100 million foundation corpus. A new opportunity presented itself in a third state with a potential to add another 4 million children. In grappling with this new opportunity they had to make certain strategic decisions on whether to go deeper (expand to grades 4 and 5) or go broader to more grade 1 to 3 children. They were wrestling with the question of which option would lead to more impact and leave their social innovation in a sustainable position after their exit.

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https://cb.hbsp.harvard.edu/cbmp/product/518006-PDF-ENG

  • Harvard Business School Case 518-005

Magic Bus: From Childhood to Livelihood

Founded in 1999 by Matthew Spacie to give poor children an opportunity to play, Magic Bus had evolved to a leading social enterprise engaged in sports for development, holistic childhood development, and livelihood training for youth between the ages of 6 to 18. By 2017, there were 400,000 children in its various programs. The organization had been through three phases of growth. The case poses the following question: What should the fourth phase should look like?

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https://cb.hbsp.harvard.edu/cbmp/product/518005-PDF-ENG

  • Harvard Business School Case 717-058

Philippines: From Sick Man to Strong Man

No abstract available.

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https://cb.hbsp.harvard.edu/cbmp/product/717058-PDF-ENG

  • Harvard Business School Case 516-028

Building an e-Commerce Brand at Wayfair

Wayfair, Inc. comprised five home goods, furniture, and décor e-commerce brands. Wayfair.com, the main brand, which was responsible for the majority of sales, targeted the mass-middle home-goods market. AllModern, DwellStudio, Joss & Main, and Birch Lane were niche sites focused on more specialized curated design esthetics. Determining the 2014 advertising budget for Wayfair.com is the big question in the case. Two ad budget decisions need to be made. The first decision is in regard to the amount of money to be allocated for advertising in 2014. The second decision concerns how to allocate this budget. How much should go to TV ads? How should the remainder be allocated within the digital media options?

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https://cb.hbsp.harvard.edu/cbmp/product/516028-PDF-ENG

  • Harvard Business School Case 818-008

Propel

In 2014, Jimmy Chen, a former product manager at Facebook, founded the start-up Propel to build software for low-income Americans. After conducting in-depth behavioral research, Chen and his small team in New York City began to develop technology to address the burdensome process of accessing benefits from the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps. They first designed a mobile site called Easy Food Stamps that streamlined SNAP enrollment, then developed the Fresh EBT app that allowed users to quickly and easily check their SNAP balances on mobile devices. By November 2016, Fresh EBT had 133,000 weekly active users, but Propel had a limited funding runway, and, ahead of a meeting with investors, Chen has to select a business model. He evaluates data from two ongoing business model pilots—financial services referrals and grocery marketing—along with other user behavior research to determine how Propel could generate meaningful revenue while continuing to provide value to users.

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https://cb.hbsp.harvard.edu/cbmp/product/818008-PDF-ENG