Publication records

This case study provides a discussion of how Virgin Mobile, an innovative virtual mobile network operator, has developed a unique position in the UK market through unique positioning and strong business system fit. The first section of the case discussion focuses on the rather innovative Virgin Mobile's business model and strategy and the firm's underlying business activities that provided a uniquely differentiated positioning in the UK mobile telecommunications sector up until mid 2005. The second section explores how Virgin Mobile was able to achieve sustainable competitive advantage over the period from 1999 to 2005, but then turns to an analysis of how the firm's competitive advantage has been eroded by changes in regulation and a shift in the competitive environment.

This paper uses proprietary data on European IPOs with detailed information on the demand at different points of time and allocation for institutional and retail investors. The nature of the data allows us to analyze the reason of why institutional investors as a group get more allocations of underpriced issues than retail investors. By explicitly examining institutional and retail demand for different kinds of stocks, we find that this is due to institutional investors' superior ability to detect underpriced stocks rather than the underwriter's preferential treatment. At the same time, the subset of domestic institutional investors supports the underwriter in issues with weak demand and receives in turn favorable allocations in underpriced issues.

With permission of Elsevier

This is a two part case study that explores Celtel Nigeria's innovative approach to serving the rural poor. The A Case provides an overview of the mobile telecommunications market in Nigeria as of mid 2007, as well as detailed demographic and socioeconomic information. At the time of the case Celtel Nigeria is the second largest mobile telecommunications company in the Nigerian market with a 28% market share and subscriber base of approximately 8 million. The company has experienced considerable success in serving Nigeria's cities and larger towns, but has only recently shifted its attention to serving poorer consumers in rural areas - a massive but as of yet under tapped market. But this shift from urban to rural has not been easy, and although some 50% of Nigeria's population lives in rural regions the challenges of reaching them sometimes seem overwhelming. The absence of a reliable national electricity grid means that the company's rural telecommunications towers have to be run on diesel generators, resulting in high maintenance and diesel fuel costs. Theft and vandalism of expensive communications equipment and generators has emerged as a major concern, resulting in the need to employ full-time security guards on virtually every base station site outside of urban areas. The distribution and marketing of products and services is also a challenge, with existing distributor networks well established in urban areas, but virtually absent from the countryside. On top of all this, while there is real demand for telecommunications services most consumers in rural areas still see mobile telephony as an expensive necessity, with affordability remaining a very real issue for many communities. At the end of the A Case Celtel Nigeria's Chief Operating Officer Lars Stork is pondering the challenges of bringing the benefits of mobile telecommunications to Nigeria's rural poor, setting the scene for analysis by students in suggesting potential route to market approaches for the company. The B Case demonstrates how Celtel has been able to implement a highly innovative marketing strategy to serve low-income rural customers. At the heart of this marketing approach is what is called the Rural Acquisition Initiative (RAI), a micro-franchising model involving partnerships with local entrepreneurs. It is recommended that both Case A and B are distributed to students, but the case can also be taught if only the A Case is distributed. In the latter situation, instructors will still need to review the B case to be able to explain the business model behind the rural acquisition model. There is also PowerPoint pack and video CD-Rom to complement the case study, and both are highly recommended to enhance the classroom experience. Both can be ordered via the ECCH Collis website.

This is the second of a two-case series (ESMT-309-0096-1 and ESMT-309-0097-1 ). The cases explore Celtel Nigeria's innovative approach to serving the rural poor. The (A) case provides an overview of the mobile telecommunications market in Nigeria as of mid 2007, as well as detailed demographic and socioeconomic information. At the time of the case Celtel Nigeria is the second largest mobile telecommunications company in the Nigerian market with a 28% market share and a subscriber base of approximately 8 million. The company has experienced considerable success in serving Nigeria's cities and larger towns, but has only recently shifted its attention to serving poorer consumers in rural areas - a massive but as of yet untapped market. But this shift from urban to rural has not been easy, and although some 50% of Nigeria's population live in rural regions the challenges of reaching them sometimes seem overwhelming. The absence of a reliable national electricity grid means that the company's rural telecommunication towers have to be run on diesel generators, resulting in high maintenance and diesel fuel costs. Theft and vandalism of expensive communications equipment and generators has emerged as a major concern, resulting in the need to employ full-time security guards on virtually every base station site outside of urban areas. The distribution and marketing of products and services is also a challenge, with existing distributor networks well established in urban areas, but virtually absent from the countryside. On top of all this, while there is a real demand for telecommunications services most consumers in rural areas still see mobile telephony as an expensive necessity, with affordability remaining a very real issue for many communities. At the end of the (A) case Celtel Nigeria's Chief Operating Officer Lars Stork is pondering the challenges of bringing the benefits of mobile telecommunications to Nigeria's rural poor, setting the scene for analysis by students in suggesting potential route to market approaches for the company. The (B) case demonstrates how Celtel has been able to implement a highly innovative marketing strategy to serve low-income rural customers. At the heart of this marketing approach is what is called the Rural Acquisition Initiative (RAI), a micro-franchising model involving partnerships with local entrepreneurs. It is recommended that both case (A) and (B) are distributed to students, but the case can also be taught if only the (A) case is distributed. In the latter situation, instructors will still need to review the (B) case to be able to explain the business model behind the rural acquisition model.

The case aims to leverage the telecommunications industry as an earlier analogue for the development of infrastructural industries (e.g. utilities, railways, aviation) in times after liberalization. It describes the years of Deutsche Telekom CEO Kai-Uwe Ricke. By doing so, it provides students with the opportunity to analyze the need to adjust the company model to a changing competitive environment and the role of leadership in times of transition.

In this paper, we explore the possible consequences that pricing and reimbursement regulation may have on pharmaceutical innovation. We first investigate qualitatively how a pharmaceutical firm is likely to strategically respond in its R&D activities to pricing and reimbursement regulation. We then quantitatively evaluate these effects in the context of a calibrated decision-theoretic model of drug development in which a pharmaceutical firm is forward-looking and takes future pricing regulation into account in making current development decisions. Our findings indicate that, in designing optimal pharmaceutical pricing and reimbursement regulation, the benefits of more affordable or cost-effective drugs must be traded against the costs of less pharmaceutical innovation, with fewer projects being developed in general and in particular in low-margin therapeutic areas and with little potential of being considered highly innovative at the time of market launch.

Globalization has been seen as both a threat and an opportunity whenever it has occurred. Jamie Anderson, Martin Kupp and Jörg Reckhenrich give us an artists' perspective on managing in a global business world.

© 2009 The Author Journal compilation © 2009 London Business School

The Basel II Accord requires banks to establish rigorous statistical procedures for the estimation and validation of default and ratings transition probabilities. This raises great technical challenges when sufficient default data are not available, as is the case for low default portfolios. We develop a new model that describes the typical internal credit rating process used by banks. The model captures patterns of obligor heterogeneity and ratings migration dependence through unobserved systematic macroeconomic shocks. We describe a Bayesian hierarchical framework for model calibration from historical rating transition data, and show how the predictive performance of the model can be assessed, even with sparse event data. Finally, we analyze a rating transition data set from Standard and Poor's during 1981-2007. Our results have implications for the current Basel II policy debate on the magnitude of default probabilities assigned to low risk assets.

With permission of Elsevier