Publication database

The paper summarizes the key elements of business strategies as well as corporate strategies and puts them together as a synchronized framework.

We consider the financial hedging of a random operational cash flow that arises in inventory operations with price and demand uncertainty. We use a variance minimization approach to find a financial portfolio that would minimize the total variance of operational and financial returns. For inventory models that involve continuous price fluctuations and price-dependent demand that arrives in continuous time, we characterize the minimum-variance hedging policies and numerically illustrate their effectiveness.

This paper studies five mergers in the European wireless telecommunication industry and analyzes their impact on prices and capital expenditures of both merging carriers and their rivals. We find substantial heterogeneity in the relationship between increases in concentration and carriers’ prices. The specifics of each merger case clearly matter. Moreover, we find a positive correlation between the price and the investment effects; when the prices after merger increase (decrease), the investments increase (decrease) too. Thus, we document a trade-off between static and dynamic efficiencies of mergers.

 

View all ESMT Working Papers in the ESMT Working Paper Series here. ESMT Working Papers are also available via SSRN, RePEc, EconStor, and the German National Library (DNB).

In this paper, we study how a retailer can benefit from acquiring consumer taste information in the presence of competition between the retailers store brand (SB) and a manufacturers national brand (NB). In our model, there is ex-ante uncertainty about consumer preferences for distinct product features, and the retailer has an advantage in resolving this uncertainty because of his close proximity to consumers. Our focus is on the impact of the retailers information acquisition and disclosure strategy on the positioning of the brands. Our analysis reveals that acquiring taste information allows the retailer to make better SB positioning decisions. Information disclosure, however, enables the manufacturer to make better NB positioning decisions – which in return may benefit or hurt the retailer. For instance, if a particular product feature is quite popular, then it is beneficial for the retailer to incorporate that feature into the SB, and inform the manufacturer so that the NB also includes this feature. Information sharing, in these circumstances, benefits both the retailer and the manufacturer, even though it increases the intensity of competition between the brands. But, there are situations in which the retailer refrains from information sharing so that a potentially poor positioning decision by the NB makes the SB the only provider of the popular feature. The retailer always benefits from acquiring information. However, it is beneficial to the manufacturer only if the retailer does not introduce an SB due to the associated high fixed cost.

 

View all ESMT Working Papers in the ESMT Working Paper Series here. ESMT Working Papers are also available via SSRN, RePEc, EconStor, and the German National Library (DNB).

Service employees frequently must enforce rules upon their customers to mitigate dysfunctional customer behavior and ensure proper service delivery (e.g., enforce “fasten seatbelt” signs on flights). However, the consequences of enforcing service rules (ESR) are not well understood. To elucidate the effect of ESR, the authors present seven studies involving > 6800 customers and consisting of cross-sectional and longitudinal data from customer surveys and company records as well as experiments. The results indicate that ESR exerts ambivalent effects: customers who experience ESR directed at other customers perceive service employees as more competent, which increases customer loyalty. However, if ESR is directed at customers themselves, they perceive a self-concept threat, leading them to devalue service employees' warmth and competence and to become less loyal. The effects of ESR hinge on a number of factors, including the harm that dysfunctional behavior potentially causes, the way ESR is communicated, and customers' experience with the service situation. Furthermore, the authors show that service employees can alleviate the negative effects of ESR by communicating service rules in advance and justifying ESR appropriately.

With permission of Elsevier

The report shows that a reporting of vulnerabilities used by the state for active measures is likely to have only a minor effect on the increase in overall technical IT security. On the other hand, the value of the work of the security authorities is in many cases considered high, due to the high tactical enablement against potential malicious actors. The demand of some, that state authorities should refrain from pro-actively exploiting vulnerabilities for active measures therefore does not seem to make much sense; the net effect in security would be negative. Nevertheless, processes can be introduced that allow a more precise assessment and an informed, accountable and cautious handling of offensively used vulnerabilities.

The case depicts the first few weeks of the 2014 Ebola outbreak in West Africa and describes how two organizations, the World Health Organization and Doctors Without Borders, assessed the seriousness of the outbreak. Both organizations have expertise and experience in containing epidemics, and past Ebola outbreaks in particular. These organizations nonetheless reached radically opposite conclusions. The case explores the possible reasons for these differences in predicting the outbreak’s evolution.