Publication database

This paper considers a call center outsourcing contract analysis and choice problem faced by a contractor and a service provider. The service provider receives an uncertain call volume over multiple periods and is considering outsourcing all or part of these calls to a contractor. Each call brings in a fixed revenue to the service provider. Answering calls requires having service capacity; thus implicit in the outsourcing decision is a capacity decision. Insufficient capacity implies that calls cannot be answered, which in turn means there will be a revenue loss. Faced with a choice between a volume-based and a capacity-based contract offered by a contractor that has pricing power, the service provider determines optimal capacity levels. The optimal price and capacity of the contractor together with the optimal capacity of the service provider determine optimal profits of each party under the two contracts being considered. This paper characterizes optimal capacity levels and partially characterizes optimal pricing decisions under each contract. The impact of demand variability and the economic parameters on contract choice are explored through numerical examples. It is shown that no contract type is universally preferred and that operating environments as well as cost-revenue structures have an important effect.

© 2008 INFORMS

A growing share of inward investment into the European Union, including but not limited to sovereign wealth funds (SWFs), will come from countries with diverse political regimes with which Europeans may not always see eye-to-eye. The current crisis may increase both Europe's need for such investment and its sensitivity to the non-economic implications. New investor countries have incentives to refrain from political use of their assets, as illustrated by the recently published 'Santiago principles' for transparency and accountability of SWFs. But these incentives are not powerful enough to spare Europe its own assessment of security risks linked to new trends in foreign investment.

As markets internationalize while consolidating, companies have to ask themselves if they can become leaders in these broader international markets. The consolidation index, developed by Burger, is a framework for developing and validating strategies in this regard. The European airline industry has a comparably low level of consolidation with the top 5 airlines having a combined market share of 31 percent in Europe. This business brief applies the consolidation index to the European airline industry and shows which airlines are in a good position to drive the future consolidation process in this industry.

Extensive industry consolidation is taking place in Europe in many industries. The aviation industry, for example, has seen mergers between Air France and KLM, as well as Lufthansa and Swiss. The German banking industry just recently started to consolidate with the takeover of Dresdner Bank by Commerzbank and the partial takeover of Postbank by Deutsche Bank. But how about consolidation in one of the biggest growth-markets worldwide - China? A recent survey by ESMT has looked at the differences between Europe and China when it comes to consolidation.

Following the merger of Commerzbank with Dresdner Bank and the subsequent takeover of a 30% share in Deutsche Postbank by Deutsche Bank the German banking market seems to enter the long awaited consolidation. The Business Brief analyses the consequences of these transactions and shows that they are merely first steps. Only the reform of the public sector banking system - with the dominant savings banks and the Landesbanken - will provide Germany's banks with a chance to remain market driving generalists in a consolidating European market.

Translating IPCC climate models into CO2 emissions per head results in 2030 emission targets of 5 percent of today's emission levels for the US and 10 percent for Europe. In an energy environment where externalities like CO2 are priced and where fossil fuels are becoming scarce and more expensive, only a major transformation of the 20th century energy and mobility infrastructure will be able to cope with these climate and fossil fuel scarcity challenges. With increasing energy prices, energy efficiency and decentralized energy generation will be key ingredients for this energy paradigm shift. Focusing on this paradigm shift, the business brief as a thought experiment intends to: - Identify implications for the value chain, namely the creation of new value-chain segments; - Indicate potential shifts in market size and margin of the respective value-chain segments; - Derive implications for players involved, namely the emergence of a new competitive landscape. The business brief addresses all energy players involved, especially incumbents who face the challenge to balance the tasks of securing and optimizing traditional business while at the same time taking part in new disruptive innovations.

Summary of results from the 2007 Consolidation Impact Survey. The survey covers four industries that are most affected from consolidation trends in Germany: Aviation, Utilities, Telecoms and Banking.

This study analyses the relationship between entry regulation and infrastructure investment in the telecommunication sector. The empirical analysis we conduct is based on a comprehensive data set covering 180 fixed-line and mobile operators in 25 European countries over 10 years and employs a newly created indicator measuring regulatory intensity in the European countries. We carefully treat the endogeneity problem of regulation by applying instrumental variables and find that tough entry regulation (e.g. unbundling) discourages infrastructure investment by entrants but has no effect on incumbents in fixed-line telecommunications. We do not find significant impact of entry regulation on investment in mobile telephony.