Özalp Özer of The University of Texas at Dallas and Yanchong Zheng of MIT Sloan researched the role of regret and availability misperception in shaping a retailer's pricing and inventory strategies. They found that forward-looking consumers who see a product they want to buy will hesitate: should they buy it now, or wait till later when […]
Subject: Competitive strategy
Why Increasing Demand Is Not Always the Answer to New Competition
Using the movie exhibition industry as its central case study, a team of researchers studied how the entry of a new movie theatre impacts an incumbent’s theatre movie choices. From the perspective of movie theatres, the movies that bring in more patrons (for example, the big-budget blockbusters or highly popular, recently released movies) are more […]
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Should Technology Innovators Participate in the Commercialization Process?
Entrepreneurs innovating in the technology space often lack the know-how or “specialized complementary assets” within their companies to successfully commercialize their innovations. Consequently, to date, the academic literature on this subject has advised them to contract with or license the commercialization to incumbent companies that already have an established market presence. In the short term […]
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The Impact of Ideal Vs Problematic Shareholders
Companies want shareholders who share their long-term investment horizon, according to a survey of 138 North American investor relations professionals. More than 90% of the companies surveyed describe their ideal shareholder as one with a long-term perspective. The reason: by giving companies the freedom to make strategic decisions and long-term investments, long term-focused shareholders help […]
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What Your Company Can Learn from Supercompetitors
Traditionally, industry-leading companies used to be large conglomerates that gained their dominant competitive advantage through an accumulation of assets and positions, which gave them unbeatable economies of scale. Thanks to the diversity of their portfolios, these conglomerates had a wide reach, allowing them to pursue short-term profitability and growth wherever they could find it. Today, […]
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Is There an Open Business Model Right for Your Company?
Traditional closed business models still dominate in today’s business world, but more and more companies are looking at the opportunities created through open collaboration and exchange with business model partners. Pioneering companies such as SAP put themselves at the centre of a vibrant ecosystem of active partners. The question for corporate executives is when to […]
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Why Companies from Emerging Markets Are Putting the Heat on Multinationals
What is the basis for a company’s competitive advantage? Traditionally, this question elicits one of two answers: 1) Industry structure. Finding the product-market space within a particular industry that is optimal for your company: in this space you can establish a monopolistic or at the least an oligopolistic position through various barriers to entry. 2) […]
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Do Your Managers – Responses to Market Results Damage Profits?
Many managers believe that quality is something that they as managers and decision-makers can control. Quality is internal and stable, unlike prices, which are subject to changing market conditions. Although prices are set internally, of course, these outside market pressures effectively, in the view of managers, take price decisions out of their hands (for example, […]
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How to Turn a Product-Focused Company into a Platform Business
The most basic business is product-based, involving the manufacturing, assembling and/or delivery of a product. A different type of business, once rare but becoming more and more common, is platform-based, involving creating the context for two or more third parties to interact. EBay and Match.com, for example, were created as platform-based businesses: using technological innovations, […]
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How to Be a Customer-intimate Company
Around 20 years ago, academics and consultants Michael Treacy and Fred Wiersema identified three ‘value disciplines’ or models followed by top-performing companies: operational excellence, customer-intimacy and product leadership. The second, essentially an advanced form of customer-centricity, is usually the one that’s hardest to emulate. One of the difficulties with the customer-intimacy model is that it […]