Do cherry pickers – those consumers who are extremely sensitive to price and go from store to store to pick the best-priced items and leave the rest – really save a lot of money? A recent paper by Wharton marketing professor Stephen J. Hoch and Edward J. Fox a marketing professor at the Cox School of Business at Southern Methodist University found that consumers not only save money but that the savings are enough to offset the time it takes to do the extra shopping. In addition the researchers f...
Jan 14, 2004•9 min
You might think that with the passing of another year the corporate scandals that have rocked American business would be showing signs of petering out. They are not. In the past few months disclosures of allegedly unethical or illegal practices have rocked the mutual-fund industry and some of its blue-chip names even as the head of the New York Stock Exchange was forced to resign over the size of his compensation package. Knowledge at Wharton spoke to ethics experts a business historian and a Wa...
Jan 14, 2004•16 min
Leadership doesn’t just start at the top. Leaders can also be found at the bottom of an organization and at just about every place in between. In this special report by Knowledge at Wharton and The McKinsey Quarterly the management journal of consulting firm McKinsey & Co. experts from McKinsey and Wharton point out that regardless of whether people are on the top line or the front line they should explore ways to exercise their leadership potential to the fullest. That is the only way in wh...
Dec 23, 2003•16 min
Actors athletes and executives are among the most populous inhabitants of the rarified atmosphere of multimillion dollar incomes. Why is it then that corporate executives are coming under fire for excessive pay when athletes like Michael Jordan and entertainers like Oprah Winfrey seem to stir no such feelings of resentment? Part of the answer suggest Wharton faculty and others is that people see – and get – a direct benefit from what athletes and entertainers provide. Hosted on Acast. See acast....
Nov 19, 2003•12 min
Managers traditionally have built their careers by concentrating on specific disciplines such as finance or marketing. Such specialization however pales in comparison to the value that executives can generate when they fuse together insights from various fields into a cohesive whole. That was the message that the heads of three companies -- ARAMARK Commerce Bancorp and Contigroup Companies -- delivered when they spoke recently at Wharton. Hosted on Acast. See acast.com/privacy for more informati...
Oct 22, 2003•9 min
The recording industry has a pricing problem. People do not want to pay $15-20 for a compact disc when they can download the same music for free over the Internet. The industry’s solution appears as novel as the technology that is giving it such headaches: launch hundreds of lawsuits against otherwise law-abiding consumers who download music. As G. Richard Shell a legal studies professor and author of a forthcoming book on competitive legal strategy notes this same tactic was tried 100 years ago...
Oct 22, 2003•10 min
The U.S. stock market has jumped and the economy shows signs of perking up but Americans continue to lose jobs. Indeed some economists warn that that many of the nearly three million jobs lost over the past three years are gone for good. What’s in store for the next three months and for 2004? While most economists and market watchers are somewhat optimistic others suggest that the recovery won’t last. Hosted on Acast. See acast.com/privacy for more information....
Sep 10, 2003•9 min
Fans of the hit TV comedy “The Jerry Seinfeld Show” may remember an episode in which Jerry’s friend George leaves his car parked at work so that the boss will think George is putting in long hours even when he’s not. The idea of course is that George’s apparent productivity will net him a higher raise or bonus. Wharton professor Maurice Schweitzer would call George’s behavior “an attempt to invoke the input bias – the use of input information (in this case the false impression of long hours) to ...
Sep 10, 2003•12 min
In recent years Wharton management professor Peter Cappelli has heard companies warn about a coming labor shortage to the point where this prediction is now routinely factored into discussions about human-resource issues. The problem Cappelli found is that no such shortage will occur. In his latest research Cappelli explains how challenges in recruiting and hiring stem from changes in the nature of the employer-employee relationship not in a shortfall of workers caused by demographic shifts. Hos...
Aug 27, 2003•10 min
Most people generally understand that the sooner they begin planning for retirement the better. Putting money aside now rather than later means that you will have more assets in the long run. What many people don’t know however is the amount of money they will need to live on in their golden years. Experts at Wharton examine the reasons why people don’t save enough for retirement and what strategies are available to change that. Hosted on Acast. See acast.com/privacy for more information....
Aug 27, 2003•13 min
Managers have long been interested in weeding out customers that they consider to be less profitable than others. The question is how do managers determine who belongs in that group? According to several Wharton marketing professors there is no easy answer despite new and increasingly sophisticated efforts to measure what is called “Customer Lifetime Value” (CLV) – the present value of the likely future income stream generated by an individual purchaser. CLV it turns out is hard to calculate and...
Jul 30, 2003•19 min
It’s a familiar scenario: A company brings in a new department head who immediately decides that the way to show leadership is to reorganize. Then a new division head comes on board or a new CEO and there are more reorganizations sometimes several in one month. Yet according to Wharton management professor Peter Cappelli frequent reorganizations “are like doctors treating patients with antibiotics.” The medication might work short-term but “long-term it can be harmful.” Knowledge at Wharton look...
Jul 02, 2003•21 min
Women make or influence the purchase of more than 80% of all products and services. So you might think there would be nothing about women’s buying habits that American businesses don’t know. You would be wrong according to two new books entitled “Just Ask a Woman: Cracking the Code of What Women Want and How They Buy” and “Marketing to Women: How to Understand Reach and Increase Your Share of the World’s Largest Market Segment.” The authors offer their observations on what women want when they s...
Jun 04, 2003•7 min
Prices have been at the center of human interaction ever since traders in ancient Mesopotamia began keeping records. Who doesn’t love to guess what something costs – or argue about what something ought to cost? So it should come as no surprise that companies spend a lot of time figuring out how to price their products and services. But two professors in Wharton’s marketing department Jagmohan S. Raju and Z. John Zhang say firms do not always go about pricing the right way despite the huge impact...
Jun 04, 2003•9 min
It’s the best of times … and the worst of times. Best in that participants in this year’s Wharton School Business Plan Competition represented an unusually diverse number of industries. Worst in that the ability of entrepreneurs to raise seed money from venture capitalists is distinctly hobbled by a dismal economy and an equally dismal venture capital industry. Of course what shouldn’t change in good times or bad is the ability to recognize a ‘hot’ business plan. See if you can pick the winner f...
May 07, 2003•16 min
How does Southwest Airlines keep making money? After all the airline industry overall is in a shambles. US Airways and United Air Lines are reorganizing in bankruptcy while American Airlines flirts with the same fate. As a group the nation’s biggest air carriers have lost billions of dollars over the past several years with no immediate recovery in sight. Yet the secret to its success said Southwest chairman Herb Kelleher during a talk at Wharton April 22 is available for anyone including its co...
Apr 23, 2003•8 min
For the second year in a row Wal-Mart topped Fortune magazine’s list of largest companies and is also the magazine’s most-admired firm the first time one company has shared both honors since the annual survey began in 1955. The giant retailer continues to expand worldwide planting giant supercenters as well as new neighborhood-scale markets in its attempt to offer more and more goods to a wider array of shoppers. But Wharton faculty and outside analysts note that Wal-Mart still faces a few chall...
Apr 09, 2003•13 min
Call-centers are usually regarded as high-pressure workplaces where pay is often skimpy and turnover is rampant. Employee turnover rates in the industry range from 25% to 45% a year – which poses a problem for employers who invest substantial amounts in training workers only to see them leave. A new study by Emilio J. Castilla a professor of management at Wharton shows that if call-center operators want to reduce such high turnover rates improve worker retention and even increase employee produc...
Apr 09, 2003•10 min
Should your firm target your competitors’ customers with lower prices than the competition charges them? When might it make sense instead to offer discounts to your own customers? Under what conditions might this sort of approach – known as “targeted pricing” – backfire by driving everyone’s prices down too far? Recent research by Wharton marketing professor Z. John Zhang and several colleagues examines the complex dimensions of “targeted pricing” and suggests guidelines to help companies unders...
Mar 26, 2003•11 min
When companies outsource back-office services overseas one of the biggest challenges they face is measuring the results. Failure to monitor whether work is being performed correctly after it moves outside a company can result in massive and costly errors. How can companies protect themselves against such risks? Ravi Aron co-director with Jitendra Singh of a recent Wharton executive education program on business-process outsourcing offers some crucial insights. Hosted on Acast. See acast.com/priv...
Mar 12, 2003•18 min
One of the world’s hottest PC companies has a balance sheet worth envying a dominant position in a fast-growing market and a history of good service and innovative technology. But if you haven’t heard of Legend Computer you can be excused; for the past 19 years the company has confined itself to China. As China transforms and opens though its No. 1 PC maker is coming into the spotlight and it hopes to become a global force to rival IBM Dell and HP. Experts at Wharton and elsewhere examine the pr...
Mar 12, 2003•8 min
Is Dell doing everything right? In a sluggish PC market where global shipments only rose by 2.7% in 2002 Dell reported a 21% revenue growth year-over-year in the fourth quarter and their global market share jumped from 13.2% to 15.7%. Meanwhile Dell is a solid number one in the U.S. with 29.2% of the market. They have big plans in China and in printers. Is there any place this powerhouse is vulnerable? Hosted on Acast. See acast.com/privacy for more information....
Mar 12, 2003•9 min
In today’s economy the odds that employees’ skills will need to be updated have increased says management professor Peter Cappelli. The question then becomes is your employer going to reinvest in you through retraining or lay you off and hire someone new? As director of the school’s Center for Human Resources Cappelli wanted to know why a few companies have remained committed to retraining even as the ethos of American business has changed. The answer as Cappelli explains in a new research paper...
Jan 29, 2003•11 min
What makes some companies so much better at managing customer relationships than their competitors? Put a different way how are companies like Enterprise Rent-A-Car Pioneer Hi-bred Seeds Fidelity Investments Lexus Intuit and Capital One able to stay more closely connected to customers than their rivals in ways that significantly influence the profitability of the firm? It’s a question that Wharton marketing professor George Day answers in a new paper. His research notes among other things three ...
Jan 15, 2003•17 min
In the foreword of Who Says Elephants Can’t Dance? Louis V. Gerstner Jr.’s memoir of his nine years as CEO of IBM the author confesses that he isn’t one for reading the kind of book he’s written. After a twelve-hour day at work he asks “who would want to go home and read about someone else’s career at the office?” Apparently a lot of people do if book sales are any indication. Although he has his critics Gerstner’s book tells how he turned IBM from a potential dinosaur into a dancing pachyderm. ...
Dec 18, 2002•7 min
Many Western companies are considering moving back-office operations such as call centers to low-wage countries like India. While this approach can result in significant savings when the project is handled right potential pitfalls can undo the benefits. Knowledge at Wharton spoke with two executives who have undertaken such projects for their organizations to understand where the pitfalls lie and how to avoid them. Hosted on Acast. See acast.com/privacy for more information....
Dec 18, 2002•16 min
According to Ken Lewis chairman chief executive of Charlotte-based Bank of America standalone investment banks are headed for obsolescence and perhaps even extinction. Speaking at Wharton on Nov. 7 Lewis painted a grim future for the once high-flying investment banking business while discussing the strategy corporate culture and ongoing expansion of Bank of America. Hosted on Acast. See acast.com/privacy for more information.
Nov 19, 2002•7 min
EBITDA or Earnings Before Interest Taxes Depreciation and Amortization has been used by analysts and investors to measure the fiscal health of the many high-tech media and other asset-heavy firms that do not generate earnings but instead incur plenty of depreciation amortization and other charges. Recently however EBITDA has come under fire for contributing to accounting irregularities at such companies as WorldCom and AOL Time Warner. Hosted on Acast. See acast.com/privacy for more information....
Nov 06, 2002•9 min
What constitutes a successful identity-oriented marketing strategy? According to Wharton marketing professor Americus Reed II it consists of three critical links – the consumer the identity and the brand. If these links are forged says Reed who recently completed a research paper on this topic “then they create connections that can lead to advantageous marketing outcomes for companies that are savvy enough to incorporate identity into their marketing strategy.” Think Harley-Davidson. Hosted on A...
Nov 06, 2002•12 min
A few days before Daniel Kahneman and Vernon Smith won the Nobel Price in Economic Sciences for their research into how individuals make economic decisions Wharton hosted a debate showcasing two views of market efficiency. The efficient-markets banner was carried by Princeton professor Burton Malkiel author of “A Random Walk Down Wall Street ” while Richard Thaler a professor at the University of Chicago represented the behavioral finance camp. The debate was moderated by Wharton finance profess...
Oct 23, 2002•13 min
