Break free from the product life cycle

Most firms build their marketing strategies around the concept of the product life cycle--the idea that after introduction, products inevitably follow a course of growth, maturity, and decline. It doesn't have to be that way, says HBS marketing professor Youngme Moon. By positioning their products in unexpected ways, companies can change how customers mentally categorize them. In doing so, they can shift products lodged in the maturity phase back--and catapult new products forward--into the growth phase. The author describes three positioning strategies that marketers use to shift consumers' thinking. Reverse positioning strips away"sacred" product attributes while adding new ones (JetBlue, for example, withheld the expected first-class seating and in-flight meals on its planes while offering surprising perks like leather seats and extra legroom). Breakaway positioning associates the product with a radically different category (Swatch chose not to associate itself with fine jewelry and instead entered the fashion accessory category). And stealth positioning acclimates leery consumers to a new offering by cloaking the product's true nature (Sony positioned its less-than-perfect household robot as a quirky pet). Clayton Christensen described how new, simple technologies can upend a market. In an analogous way, these positioning strategies can exploit the vulnerability of established categories to new positioning. A company can use these techniques to go on the offensive and transform a category by demolishing its traditional boundaries. Companies that disrupt a category through positioning create a lucrative place to ply their wares--and can leave category incumbents scrambling.     

The new rules for bringing innovations to market

It's tough to get consumers to adopt innovations--and it's getting tougher all the time. That's because more and more markets are taking on the characteristics of networks. The interconnections among today's companies are so plentiful that often a new product's adoption by one player depends on its systematic adoption by other players. Consider the disparate companies involved with the popularization of digital photography: software vendors, camera manufacturers, broadband communications companies, printer manufacturers, and so on. By contrast, Kodak was pretty much the sole player involved with popularizing film photography. The traditional levers executives use to launch products--such as targeting unique customer segments or developing compelling value propositions--don't work as well in this new environment. Instead, innovators must orchestrate a change of behaviors across the market, unraveling the status quo so that a large number of players adopt their offerings and believe they are better off for having done so. In this article, Monitor Group's Bhaskar Chakravorti outlines a four-part framework for doing just that. The innovator must reason back from a target endgame, implementing only those strategies that maximize its chances of getting to its goal. It must complement power players, positioning its innovation as an enhancement to their products or services. The innovator must offer coordinated switching incentives to three core groups: the players that add to the innovation's benefits, the players that act as channels to adopters, and the adopters themselves. And it must preserve flexibility in case its initial strategy fails. Chakravorti uses Adobe's introduction of its Acrobat software as an example of an innovator that took into account other players in the network--and succeeded because of it.     

Affluent mature consumers: Preference and patronisation for financial services

Mature consumers have long been recognised as an important segment of market that no marketers of financial-service providers could ignore. The segment itself, however, is not homogeneous. Our study further segments the market basing on income and contrasts the differences between upscale mature consumers and lower scale ones in terms of their preference and patronisation for financial services. The study based on two large-scale studies designed to generate information that would fill gaps in our existing knowledge about upscale older consumers. Implications are discussed for marketers of financial services to fine-tune their differentiation strategies.     

Finding your next core business

How do you know when your core needs to change? And how do you determine what should replace it? From an in-depth study of 25 companies, the author, a strategy consultant, has discovered that it's possible to measure the vitality of a business's core. If it needs reinvention, he says, the best course is to mine hidden assets. Some of the 25 companies were in deep crisis when they began the process of redefining themselves. But, says Zook, management teams can learn to recognize early signs of erosion. He offers five diagnostic questions with which to evaluate the customers, key sources of differentiation, profit pools, capabilities, and organizational culture of your core business. The next step is strategic regeneration. In four-fifths of the companies Zook examined, a hidden asset was the centerpiece of the new strategy. He provides a map for identifying the hidden assets in your midst, which tend to fall into three categories: undervalued business platforms, untapped insights into customers, and underexploited capabilities. The Swedish company Dometic, for example, was manufacturing small absorption refrigerators for boats and RVs when it discovered a hidden asset: its understanding of, and access to, customers in the RV market. The company took advantage of a boom in that market to refocus on complete systems for live-in vehicles. The Danish company Novozymes, which produced relatively low-tech commodity enzymes such as those used in detergents, realized that its underutilized biochemical capability in genetic and protein engineering was a hidden asset and successfully refocused on creating bioengineered specialty enzymes. Your next core business is not likely to announce itself with fanfare. Use the author's tools to conduct an internal audit of possibilities and pinpoint your new focus.     

The growth crisis--and how to escape it

At a time when companies are poised to seize the growth opportunities of a rebounding economy, many of them, whether they know it or not, face a growth crisis. Even during the boom years of the past decade, only a small fraction of companies enjoyed consistent double-digit revenue growth. And those that did often achieved it through short-term measures--such as mergers and inflated price increases--that don't provide the foundation for growth over the long term. But there is a way out of this predicament. The authors claim that companies can achieve sustained growth by leveraging their "hidden assets," a wide array of underused, intangible capabilities and advantages that most established companies already hold. To date, much of the research on intangible assets has centered on intellectual property and brand recognition. But in this article, the authors uncover a host of other assets that can help spark growth. They identify four major categories of hidden assets: customer relationships, strategic real estate, networks, and information. And they illustrate each with an example of a company that has creatively used its hidden assets to produce new sources of revenue. Executives have spent years learning to create growth using products, facilities, and working capital. But they should really focus on mobilizing their hidden assets to serve their customers' higher-order needs--in other words, create offerings that make customers' lives easier, better, or less expensive. Making that shift in mind-set isn't easy, admit the authors, but companies that do it may not only create meaningful new value for their customers but also produce double-digit revenue and earnings growth for investors.     

Business marketing: understand what customers value

How do you define the value of your market offering? Can you measure it? Few suppliers in business markets are able to answer those questions, and yet the ability to pinpoint the value of a product or service for one's customers has never been more important. By creating and using what the authors call customer value models, suppliers are able to figure out exactly what their offerings are worth to customers. Field value assessments--the most commonly used method for building customer value models--call for suppliers to gather data about their customers firsthand whenever possible. Through these assessments, a supplier can build a value model for an individual customer or for a market segment, drawing on data gathered form several customers in that segment. Suppliers can use customer value models to create competitive advantage in several ways. First, they can capitalize on the inevitable variation in customers' requirements by providing flexible market offerings. Second, they can use value models to demonstrate how a new product or service they are offering will provide greater value. Third, they can use their knowledge of how their market offerings specifically deliver value to craft persuasive value propositions. And fourth, they can use value models to provide evidence to customers of their accomplishments. Doing business based on value delivered gives companies the means to get an equitable return for their efforts. Once suppliers truly understand value, they will be able to realize the benefits of measuring and monitoring it for their customers.     

Eager sellers and stony buyers: understanding the psychology of new-product adoption

Companies that introduce new innovations are the most likely to flourish, so they spend billions of dollars making better products. But studies show that new innovations fail at a staggering rate. While many blame these misses on lackluster products, the reality isn't so simple. The goods that consumers dismiss often do offer improvements over existing ones. So why don't people purchase them? And why do companies keep peddling products that buyers are likely to reject? The answer, says the author, can be found in the brain. New products force consumers to change their behavior, and that has a psychological cost. Many products fail because people irrationally over-value the benefits of the goods they own over those they don't possess. Executives, meanwhile, overvalue their own innovations. This leads to a serious clash. Studies show, in fact, that there is a mismatch of nine to one, or 9x, between what innovators think consumers want and what consumers truly desire. Fortunately, companies can overcome this disconnect. To start, they can determine where their products fall in a matrix with four categories: easy sells, sure failures, long hauls, and smash hits. Each has a different ratio of product improvement to change required from the consumer. Once businesses know where their products fit into this grid, they can manage the resistance to change. For some innovations, major behavior change is a given. In those cases, companies can either wait for consumers to warm to the product, make the improvement so great that buyers get past their apprehension, or try to eliminate the incumbent product. Firms can also try to minimize buyer resistance by making products that are compatible with incumbent goods, seeking out those who are not yet users of the existing product, or finding true believers.     

The coming battle for customer information

Companies collect information about customers to target valuable prospects more effectively, tailor their offerings to individual needs, improve customer satisfaction, and identify opportunities for new products or services. But managers' efforts to capture such information may soon be thwarted. The authors believe that consumers are going to take ownership of information about themselves and start demanding value in exchange for it. As a result, negotiating with customers for information will become costly and complex. How will that happen? Consumers are realizing that they get very little in exchange for the information they divulge so freely through their commercial transactions and survey responses. Now new technologies such as smart cards, World Wide Web browsers, and personal financial management software are allowing consumers to view comprehensive profiles of their commercial activities-- and to choose whether or not to release that information to companies. Their decision will hinge, in large part, on what vendors offer them in return for the data. Consumers will be unlikely to bargain with vendors on their own, however. The authors anticipate that companies they call infomediaries will broker information to businesses on consumers' behalf. In essence, infomediaries will be the catalyst for people to start demanding value in exchange for information about themselves. And most other companies will need to rethink how they obtain information and what they do with it if they want to find new customers and serve them better.     

2009年股市限售股“大小限”解禁问题探析

目前市场上的限售股分为股改限售股（“大小非”）、首发和增发限售股（“大小限”）以及股改对价和股权激励股份三类,其中第三类规模小,对市场的影响有限。“大小非”随着时间的推移,总量越来越少,最终将得到完全解决。但“大小限”是企业在全流通条件下发行股票时形成的,数量多、股东持股成本低,上市带来的冲击超过“大小非”。2009年6893亿股限售股解禁规模中“大小限”4656．58亿股,占比67．56％。本文侧重于对2009年“大小限”问题进行探析,并从股票发行机制等角度初步探讨解决问题的思路。     

EXPRESS LANE OR TOLLBOOTH IN THE DESERT? THE SEC'S FRAMEWORK FOR SECURITY ISSUANCE

U.S. companies that need capital may choose between selling securities in the private and public markets. These venues differ in terms of direct issuance costs, the required information disclosed, the liability incurred, and the mechanics of the capital-raising process itself. During the last two decades, the Securities and Exchange Commission (SEC) has deregulated private offerings by broadening their investor base and increasing secondary market liquidity. At the same time, SEC policy has bifurcated the offering process in the public market into two distinct segments based largely on company size and seasoning. Large public issuers have seen a gradual deregulation and acceleration of their capitalraising processes. Important changes for issuers include allowing them to incorporate information into registration statements by reference to Exchange Act reports, to use shelf registration to speed up offers, and to place securities offshore with less regulatory uncertainty. Though small issuers enjoy some of the benefits of these changes, deregulation of their offerings has been somewhat less pronounced. In a Commission report and a subsequent concept release, the SEC indicates it may restructure and unify these three disparate strands of capital raising through an innovative schema of registering companies rather than securities.     

Discovering new points of differentiation

Most profitable strategies are built on differentiation: offering customers something they value that competitors don't have. But most companies concentrate only on their products or services. In fact, a company can differentiate itself every point where it comes in contact with its customers--from the moment customers realize they need a product or service to the time when they dispose of it. The authors believe that if companies open up their thinking to their customer's entire experience with a product or service--the consumption chain--they can uncover opportunities to position their offerings in ways that neither they nor their competitors though possible. The authors show how even a mundane product such as candles can be successfully differentiated. By analyzing its customers' experiences and exploring various options, Blyth Industries, for example, has grown from a $2 million U.S. candle manufacturer into a global candle and accessory business with nearly $500 million in sales and a market value of $1.2 billion. Finding ways to differentiate one's company is a skill that can be nurtured, the authors contend. In this Manager's Tool Kit, they have designed a two-part approach that can help companies continually identify new points of differentiation and develop the ability to generate successful differentiation strategies. "Mapping the Consumption Chain" captures the customer's total experience with a product or service. "Analyzing Your Customer's Experience" shows managers how directed brainstorming about each step in the consumption chain can elicit numerous ways to differentiate any offering.     

Motivations for public equity offers: An international perspective

This paper examines the motivations for public equity offers, using a sample of 17,226 initial public offerings and 13,142 seasoned equity offerings from 38 countries between 1990 and 2003. We estimate the uses of funds raised in both initial and seasoned offerings. Firms appear to spend incremental dollars on both R&D and capital expenditures, consistent with the investment financing explanation of equity issues. However, consistent with the mispricing explanation, high market to book firms tend to save more cash and offer a higher fraction of secondary shares in SEOs than low market to book firms.     

Contextual marketing--the real business of the Internet

The painful truth is that the Internet has been a letdown for most companies--largely because the dominant model for Internet commerce, the destination Web site, doesn't suit the needs of those companies or their customers. Most consumer product companies don't provide enough value or dynamic information to induce customers to make the repeat visits--and disclose the detailed information--that make such sites profitable. In this article, David Kenny and John F. Marshall suggest that companies discard the notion that a Web site equals an Internet strategy. Instead of trying to create destinations that people will come to, companies need to use the power and reach of the Internet to deliver tailored messages and information to customers. Companies have to become what the authors call "contextual marketers." Delivering the most relevant information possible to consumers in the most timely manner possible will become feasible, the authors say, as access moves beyond the PC to shopping malls, retail stores, airports, bus stations, and even cars. The authors describe how the ubiquitous Internet will hasten the demise of the destination Web site--and open up scads of opportunities to reach customers through marketing "mobilemediaries," such as smart cards, e-wallets, and bar code scanners. The companies that master the complexity of the ubiquitous Internet will gain significant advantages: they'll gain greater intimacy with customers and target market segments more efficiently. The ones that don't will be dismissed as nuisances, the authors conclude. They suggest ways to become welcome additions--not unwelcome intrusions--to customers' lives.     

A SURVEY OF U.S. CORPORATE FINANCING INNOVATIONS: 1970–1997

In the past 30 years, major changes have occurred not only in the kinds of securities issued, but also in the way securities are issued and in the national markets where they are issued. Traditional registered offerings have been partly displaced by shelf registered offerings and Rule 144A private offerings. And once exclusively domestic U.S offerings are increasingly being supplemented by foreign market offerings by U.S. companies, and by simultaneously domestic and foreign offerings. In 1997, for example, 11% of all proceeds raised by U.S. corporations were issued in one or more foreign markets. Of the $105 billion raised in these offerings, $31 billion was denominated in currencies other than the U.S. dollar.
While traditional securities still dominate the market, the authors' research indicates that the pace of innovation in the design of securities also increased markedly during the 1980s and has continued strong throughout the 1990s. In 1997, for example, innovative securities accounted for almost 30% of total domestic offerings. Three of the most common objectives of such securities have been (1) to manage the interest rate (and other financial price) risk faced by investors and issuers; (2) to reduce information costs faced by investors when buying securities from issuers with better information about their own prospects (a condition known as "information asymmetry"); and (3) to increase the tradability of financial assets.     

From value chain to value constellation: designing interactive strategy

In today's fast-changing competitive environment, strategy is no longer a matter of positioning a fixed set of activities along that old industrial model, the value chain. Successful companies increasingly do not just add value, they reinvent it. The key strategic task is to reconfigure roles and relationships among a constellation of actors--suppliers, partners, customers--in order to mobilize the creation of value by new combinations of players. What is so different about this new logic of value? It breaks down the distinction between products and services and combines them into activity-based "offerings" from which customers can create value for themselves. But as potential offerings grow more complex, so do the relationships necessary to create them. As a result, a company's strategic task becomes the ongoing reconfiguration and integration of its competencies and customers. The authors provide three illustrations of these new rules of strategy. IKEA has blossomed into the world's largest retailer of home furnishings by redefining the relationships and organizational practices of the furniture business. Danish pharmacies and their national association have used the opportunity of health care reform to reconfigure their relationships with customers, doctors, hospitals, drug manufacturers, and with Danish and international health organizations to enlarge their role, competencies, and profits. French public-service concessionaires have mastered the art of conducting a creative dialogue between their customers--local governments in France and around the world--and a perpetually expanding set of infrastructure competencies.     

How CEOs manage growth agendas

When does it make sense for companies to grow from within? When is it better to gain new capabilities or access to markets by merging with or acquiring other companies? When should you sacrifice the bottom line in order to nurture the top line? In a thought-provoking series of essays, five executives--Kenneth Freeman of Quest Diagnostics, George Nolen of Siemens USA, John Tyson of Tyson Foods, Kenneth Lewis of Bank of America, and Robert Creifeld of Nasdaq--describe how they have approached top-line growth in various leadership roles throughout their careers. They write candidly about their struggles and successes along the way, relaying growth strategies as diverse as the companies and industries they represent. The leaders' different tactics have almost everything to do with their companies' particular strengths, weaknesses, and needs. Freeman, for instance, emphasizes the importance of knowing when to put on the brakes. When he first became CEO of Quest, he froze acquisitions for a few years so the company could focus on internal processes and "earn the right to grow." But for Greifeld, it's all about innovation, which "shakes up competitive stasis and propels even mature businesses forward." The executives agree, though, that companies can grow (and can do so profitably) by distinguishing their offerings from those of other organizations. As Ranjay Gulati of Northwestern's Kellogg School of Management points out in his introduction to the essays, no matter what strategies are in play,"it's important to remember that growth comes in many forms and takes patience.... The key is to be ready to act on whatever types of opportunities arise."     

证劵发行管制下的地方“护租”与上市公司财务困境风险化解

通过分析证券发行管制下的地方"护租"行为研究了地方政府参与辖内上市公司财务困境风险化解机制:中央政府证券发行管制形成垄断租金,地方政府围绕证券发行机会的竞争使得垄断租金转化成为可占用性准租,为了辖内公司获得未来发行证券机会,避免租值转移,地方政府积极参与辖内上市公司财务困境风险化解。上述理论分析得到了经验证据的支持。以2005—2009年处于财务困境上市公司为研究样本,发现辖内上市公司处于财务困境状况对该地区未来的公司证券发行申请通过发审委审核比例存在显著影响,地方政府则会根据自身执行能力努力减少辖内上市公司处于财务困境。本文的研究对于中国转型期证券行政监管阶段性有效,特别是地方政府积极参与辖内上市公司财务困境风险化解给出了机理性解释并提供了经验证据。     

医药:中国健康市场中的新角色

<正> 李秀林:在世界经济一体化潮流中,中国民族医药正处于发展决策的关键阶段。医药行业是技术密集型、知识密集型行业,发展速度很快,受世界经济的影响尤为明显。中国即将加入WTO,我们如何与国际企业进行竞争,实践证明,我们历史悠久的民族医药在临床疗效等方面具有一定优势,但由于文化差异和研究方法等问题,目前还不能为国际社会所普遍接受。     

Product market advertising and new equity issues

We analyze the interaction between a firm's product market advertising and its corporate financing decisions. We consider a firm that faces asymmetric information in both the product and financial markets and that needs to raise external financing to fund its growth opportunity (new project). Any product market advertising undertaken by the firm is visible to the financial market as well. In equilibrium, the firm uses a combination of product market advertising, equity underpricing, and underfinancing (raising a smaller amount of external capital than the full information optimum) to convey its true product quality and the intrinsic value of its projects to consumers and investors. The following two predictions arise from our theoretical analysis for the relation between product market advertising and equity underpricing around new equity issues. First, firms choose a higher level of product market advertising when they are planning to issue new equity, compared with situations in which they have no immediate plans to do so. Second, product market advertising and equity underpricing are substitutes for a firm issuing new equity. We empirically test the above two predictions and find supporting evidence in the context of firms making initial public offerings and seasoned equity offerings.     

Equity Issuance,CEO Turnover and Corporate Governance

There is substantial evidence on the effect of external market discipline on chief executive turnover decisions in poorly performing companies. In this study we present evidence on the role of institutional monitoring in these decisions through the equity issuance process. We find that firms which undertake equity offerings are associated with an increased rate of forced CEO turnover that is focused on the managers of poorly performing companies. At the same time, equity offerings increase the likelihood of a new CEO being appointed from outside the current management team. We also provide evidence that independent boards are more likely to forcibly remove CEOs from their position, although this is not conditional on poor performance.