Mapping your competitive position

A price-benefit positioning map helps you see, through your customers' eyes, how your product compares with all its competitors in a market. You can draw such a map quickly and objectively, without having to resort to costly, time-consuming consumer surveys or subjective estimates of the excellence of your product and the shortcomings of all the others. Creating a positioning map involves three steps: First, define your market to include everything your customers might consider to be your product's competitors or substitutes. Second, track the price your customers actually pay (wholesale or retail? bundled or unbundled?) and identify what your customers see as your offering's primary benefit. This is done through regression analysis, determining which of the product's attributes (as described objectively by rating services, government agencies, R&D departments, and the like) explains most of the variance in its price. Third, draw the map by plotting on a graph the position of every product in the market you've selected according to its price and its level of primary benefit, and draw a line that runs through the middle of the points. What you get is a picture of the competitive landscape of your market, where all the products above the line command a price premium owing to some secondary benefit customers value, and all those below the line are positioned to earn market share through lower prices and reduced secondary benefits. Using examples as varied as Harley-Davidson motorcycles, Motorola cell phones, and the New York restaurant market, Tuck professor D'Aveni demonstrates some of the many ways the maps can be used: to locate unoccupied or less-crowded spaces in highly competitive markets, for instance, or to identify opportunities created through changes in the relationship between the primary benefit and prices. The maps even allow companies to anticipate--and counter-- rivals' strategies. R eprint RO711G     

Becoming the boss

Even for the most gifted individuals, the process of becoming a leader is an arduous, albeit rewarding, journey of continuous learning and self-development. The initial test along the path is so fundamental that we often overlook it: becoming a boss for the first time. That's a shame, because the trials involved in this rite of passage have serious consequences for both the individual and the organization. For a decade and a half, the author has studied people-particularly star performers-making major career transitions to management. As firms have become leaner and more dynamic, new managers have described a transition that gets more difficult all the time. But the transition is often harder than it need be because of managers' misconceptions about their role. Those who can acknowledge their misconceptions have a far greater chance of success. For example, new managers typically assume that their position will give them the authority and freedom to do what they think is best. Instead, they find themselves enmeshed in a web of relationships with subordinates, bosses, peers, and others, all of whom make relentless and often conflicting demands. "You really are not in control of anything, says one new manager. Another misconception is that new managers are responsible only for making sure that their operations run smoothly. But new managers also need to realize they are responsible for recommending and initiating changes-some of them in areas outside their purview-that will enhance their groups' performance. Many new managers are reluctant to ask for help from their bosses. But when they do ask (often because of a looming crisis), they are relieved to find their superiors more tolerant of their questions and mistakes than they had expected.     

An alternative interpretation of the discontinuity in earnings distributions

We show that the asymmetric effects of income taxes and special items for profit and loss firms contribute to a discontinuity at zero in the distribution of earnings. Income taxes draw profit observations towards zero while negative special items pull loss observations away from zero. These earnings components are thus expected to contribute to a discontinuity even in the absence of discretion. We show our results are not an artifact of deflation and that other common components of earnings do not have similar effects on the earnings distribution around zero.

Is the January effect still alive in the futures markets?

The January effect concerns the fact that small capitalization stocks have historically outperformed large capitalized stocks in January. We analyze evidence as to whether this anomaly can be exploited in the futures markets as a speculative investment or to add risk-adjusted value to portfolio performance. We find that the January effect is still alive in the futures markets on the Value Line minus S&P 500 spread trade, but that the marginal liquidity of the Value Line stock index futures contract has made it very risky to exploit the effect. Historically from 1982/3 to 2004/5, the trade has been profitable. This anomaly was also exploitable through a Russell 2000 minus S&P 500 spread trade from 1993/4 to 2004/5.

Regional and Sector-specific Determinants of Industry Dynamics and the Displacement–replacement Effects

In this paper, we empirically assess the importance of regional and sector-specific determinants of industry dynamics. To this aim we test three hypotheses (originally proposed by Shapiro and Khemani (1987, Int J Indust Organ 5:15–26)) for the relationship between the entry and exit of firms: independence, symmetry and simultaneity. Estimates from a panel data system of equations seem to confirm the simultaneity hypothesis for Spain, i.e. we find evidence of a displacement (replacement) effect between the gross rate of entry (exit) and the gross rate of exit (entry). Also, our results show that, irrespective of the hypothesis we use, both sectorial and regional variables affect entry and exit.

Jason Scott Smith. Building New Deal Liberalism: The Political Economy of Public Works, 1933-1956

Jason Scott Smith's ambitious, some might say overly-ambitious,goal is to "construct a new narrative" of the New Deal's significanceby using the lens of political economy to examine and explainhow the policies initiated during that historical phase "revolutionizedthe priorities of the American state, radically transformingthe physical landscape, political system, and economy of theUnited States" (p. 1). Smith most certainly does not see NewDeal policies as failures that were incapable of getting theU.S.     

True burden of drowning: compiling data to meet the new definition

The objective and aim of the study was to compile empirical data to quantify the underestimation of the true burden of drowning and to compare drowning rates using commonly reported codes compared with those revealed by use of the full range of drowning codes in ICD version 10. The authors reviewed mortality data (1999-2002) from Australia and the USA and compiled data to compare the burden of 'unintentional drowning' with that of 'all drowning'. In both Australia and the USA, drowning mortality is more than 35% higher when a full range of codes is examined. A more comprehensive representation of the drowning problem is needed to assist in strengthening prevention activities.