The effect of a magazine’s free digital content on its print circulation: Cannibalization or complementarity?

We examine how offering digital content affects demand for print magazines. Using a searchable website archive, we measure the digital content offered by a sample of US consumer magazines from 1996 to 2001. We find strong evidence that digital content cannibalizes print sales. On average, a magazine’s print circulation declines about 3–4% when it offers a website. However, the effect varies with the type of digital content offered. Offering digital access to the entire contents of the current print magazine reduces print sales by about 9%. We find no evidence that digital content complements print magazines. These results are robust to including controls for unobserved magazine, category, and time effects, as well as controls for the impact of contemporaneous price changes and other factors.     

Gift card program incrementality and cannibalization: The effect on revenue and profit

Many retailers have not measured the magnitude of cannibalization or its impact on revenue and profit when existing customers use a gift card for purchases they would have made without it, particularly when the card was purchased through a 3rd party at a discount up to 15%. We conducted a survey among gift card redeemers of a national casual dining restaurant chain to determine how the gift card affected their purchase behavior. We used this information, combined with operating margin, to model the impact of three different gift card discount scenarios on firm revenue and profit. Although the revenue effect was positive under all scenarios, the same was not true for profit. The profit was much lower than anticipated, even in the best case scenario, and was negative in the worst case scenario.     

How cannibalistic is the Internet channel? A study of the newspaper industry in the United Kingdom and The Netherlands

During the past decade, irrational exuberance has turned into a possibly equally irrational pessimism about what the Internet can accomplish. The fear of getting ruined through cannibalization losses has recently deterred many firms from deploying the Internet as a distribution channel. But do Internet channels really cannibalize firms' entrenched channels, or is this widely held assumption exaggerated? To answer this question, we apply recent structural-break time-series econometrics to quantify the impact of an Internet channel addition on the long-run performance evolution of a firm's established channels. Using a database of 85 Internet channel additions over the last 10 years in the newspaper industries of the UK and The Netherlands, we find that the often-cited cannibalization fears have, at least in this information-goods industry, been largely overstated. The Internet therefore need not be disruptive to established companies and channels. This does not, however, imply that firms enjoy free play in setting up Internet channels. In cases where the newly established Internet channel too closely mimics the entrenched channels, substantial cannibalization is more likely to take place.     

市场规模、利润侵蚀和争取多产品跨国企业的政策竞争

本文考虑两个国家(或者地区)的政府为争取一家外国跨国企业直接投资(FDI)而进行的政策竞争。两国拥有不同的市场规模,跨国公司生产两种水平差别化产品。文章证明:均衡时跨国企业的FDI选择取决于市场规模效应(marketsize effect)、两种产品间的利润侵蚀效应(cannibalization effect)和两国FDI补贴政策的共同作用。在此基础上,本文进一步得到了政府间FDI竞争的福利含义。特别地,本文还证明了:两国福利可能因参与FDI竞争而获得帕累托严格改进,或者发生帕累托严格损失。     

Now what? Evaluating the sales effects of introducing an online store

This study creates a framework for evaluating the sales impact of adding an online channel to an existing network of physical stores. Using a unique database consisting of pooled customer data from a Swedish retailer's online and offline stores, it investigates the purchase behavior of customers before and after the introduction of an online channel. The data overcome a crucial obstacle present in previous studies in that they permit matching of individual-level customer data for both online and offline behavior. The results show significant and substantial effects of online channel introduction on customer acquisition as well as on cannibalization of physical stores.     

Vertical differentiation and collusion: Pruning or proliferation?

In this paper, we tackle the dilemma of pruning versus proliferation in a vertically differentiated oligopoly under the assumption that some firms collude and control both the range of variants for sale and their corresponding prices, likewise a multiproduct firm. We analyse whether pruning emerges and, if so, a fighting brand is marketed. We find that it is always more profitable for colluding firms to adopt a pricing strategy such that some variants are withdrawn from the market. Under pruning, these firms commercialize a fighting brand only when facing competitors in a low-end market.     

Public Sector Science And The Strategy Of The Commons

We model the conditions under which incumbent firms may purposefully create an intellectual property (IP) commons such that no firm has the incentive to invest in new product development, despite the potential profitability of a public sector invention. The strategy of spoiling incentives to innovate by eliminating exclusive IP rights—the strategy of the commons—is motivated by a fear of cannibalization and supported by a credible threat. We show how the degree of potential cannibalization is related to this market failure and characterize the subgame perfect equilibrium in which the strategy of the commons is played.     

A diagrammatical template for business market demand estimation

This article describes a template that can help guide managers through a minefield of complex product interactions and demand drivers on the way to producing a realistic demand estimation. It is based on many years of consulting and conducting postmortems to find out what went wrong when demand forecasts have gone awry.A menu of troublesome variables that make up a rogue's gallery of the worst offending causes of estimation error are presented. The premise being, if we are aware of the potential trouble spots in demand estimation, we are likely to avoid some of the more serious problems that plague market projections.A diagrammatical template is presented that shows these troublesome variables and where they enter into the demand evaluation process. Next, the template components are introduced to show how the various product interactions and drivers that affect demand estimation are used and how they impact market projections. Throughout, a list of dos and don'ts are provided along with a sufficient number of real-life disaster stories to reinforce the issues.     

基于EPR背景的再制造系统中的战略决策研究

本文研究了EPR背景下,再制造系统的战略研究问题。本文在竞争环境下,分析了再制造成本因素对于OEM再制造战略决策的影响。同时,本文引入了政府征收的企业生产责任延伸费用作为外生变量,基于EPR理论研究了政府收费对于OEM再制造决策的影响。结果表明,在OEM的再制造成本较高时,OEM并不乐意与进行再制造,由于迫于政府费用压力,而不得不进行再制造,而再制造于对第三方再制造商有利可图,因此提出了OEM选择与第三方再制造商合作的模式,实现闭环供应链中利益的最大化。     

Unraveling willingness to cannibalize: a closer look at the barrier to radical innovation

In the literature it has been suggested that willingness to cannibalize might explain why certain organizations are better at developing radical innovations than other organizations. Yet, a closer inspection of the literature suggests that organizations may cannibalize on previous investments, capabilities, and sales, lending support for the notion of a three-dimensional construct of willingness to cannibalize. The construct was then tested using a sample of Dutch companies. The results confirmed the three-dimensions of willingness to cannibalize. The construct and its dimensions showed anticipated different relationships with other NPD constructs, e.g. future market focus and risk posture of top management. In a second, larger study involving a panel of Dutch SMEs the construct was further checked and its effect on the type of new products developed investigated. Two out of three-dimensions of willingness to cannibalize were correlated with turning out more radical new products. There also was a positive correlation with financial performance. The results confirm that willingness to cannibalize is a multidimensional construct and plays an important role in predicting new product radicalness.