Publication records

In 2002 the management team of Deutsche Lufthansa AG was considering the upcoming threat from low-cost airlines in the context of an increasingly complex and competitive strategic environment. Finally the decision was taken to respond to the innovation by opening an own low-cost carrier, Germanwings in late 2002. But over time the business model of Germanwings was modified repeatedly. The case series covers * Lufthansa’s considerations regarding various options to respond to the competitive challenges brought up by the emerging low-cost airlines such as easyJet or Ryanair in 2002 (Case A), * the foundation of Germanwings in late 2002 and some early successes until 2005 (Case B), and * some more recent changes in the Germanwings business model in the following five years until end of 2010 (Case C).

The purpose of the Germanwings case series is to develop a better understanding of possible responses to disruptive business models. It relies on the example of Lufthansa who for many years was considered to have mastered the ability to manage two alternative business models, the full-service model of the mother company and the low-cost model through its subsidiary Germanwings that was launched in 2002. The following three learning objectives are addressed in particular: 1. How can an incumbent player address the challenge of business model disruptive innovation? 2. How to structure the relationship between the two businesses exploiting the different models? 3. How can a company manage two radically different business models?

In 2002 the management team of Deutsche Lufthansa AG was considering the upcoming threat from low-cost airlines in the context of an increasingly complex and competitive strategic environment. Finally the decision was taken to respond to the innovation by opening an own low-cost carrier, Germanwings in late 2002. But over time the business model of Germanwings was modified repeatedly. The case series covers * Lufthansa’s considerations regarding various options to respond to the competitive challenges brought up by the emerging low-cost airlines such as easyJet or Ryanair in 2002 (Case A), * the foundation of Germanwings in late 2002 and some early successes until 2005 (Case B), and * some more recent changes in the Germanwings business model in the following five years until end of 2010 (Case C).

The purpose of the Germanwings case series is to develop a better understanding of possible responses to disruptive business models. It relies on the example of Lufthansa who for many years was considered to have mastered the ability to manage two alternative business models, the full-service model of the mother company and the low-cost model through its subsidiary Germanwings that was launched in 2002. The following three learning objectives are addressed in particular: 1. How can an incumbent player address the challenge of business model disruptive innovation? 2. How to structure the relationship between the two businesses exploiting the different models? 3. How can a company manage two radically different business models?

In 2002 the management team of Deutsche Lufthansa AG was considering the upcoming threat from low-cost airlines in the context of an increasingly complex and competitive strategic environment. Finally the decision was taken to respond to the innovation by opening an own low-cost carrier, Germanwings in late 2002. But over time the business model of Germanwings was modified repeatedly. The case series covers * Lufthansa’s considerations regarding various options to respond to the competitive challenges brought up by the emerging low-cost airlines such as easyJet or Ryanair in 2002 (Case A), * the foundation of Germanwings in late 2002 and some early successes until 2005 (Case B), and * some more recent changes in the Germanwings business model in the following five years until end of 2010 (Case C).

The purpose of the Germanwings case series is to develop a better understanding of possible responses to disruptive business models. It relies on the example of Lufthansa who for many years was considered to have mastered the ability to manage two alternative business models, the full-service model of the mother company and the low-cost model through its subsidiary Germanwings that was launched in 2002. The following three learning objectives are addressed in particular: 1. How can an incumbent player address the challenge of business model disruptive innovation? 2. How to structure the relationship between the two businesses exploiting the different models? 3. How can a company manage two radically different business models?

Around 6:00 p.m. on May 31, 2007, Urs Müller and Christoph Burger from ESMT European School of Management and Technology were getting prepared for the presentation. In about an hour they would present their proposal for an executive education program to the CEO of Energie aus Deutschland Systems (EAD Systems) and two of his senior HR managers. Sitting in the lobby of a hotel in western Germany next to the main entrance of the EAD Systems headquarters, Urs recalled the pitching process by scrolling through his notes. ESMT’s pitch to EAD Systems describes the efforts of ESMT European School of Management and Technology to acquire EAD Systems as a client for an executive education program. The case study comprises two parts, A and B, which allow comprehensively reviewing sales management in a professional services firm.

1. Understanding tender processes from the seller’s perspective: The case illustrates the typical process responding to a tender by putting together and proposal and presenting it to a B2B client, in this case a tender for executive education support of a company by a business school. As this particular process is largely in line with the tender process of other professional services such as consultancy, legal advice or auditing etc., the case can also be used to help students understand how professional service firms acquire business. To a lesser extend the case can be used to draw parallels and learnings for other B2B service offers, e.g. maintenance, complex solutions etc. 2. Understanding success factors for selling in tender processes: Beyond a mere description of the proposal process, the case helps students understand how to successfully structure a proposal process and which pitfalls are on the way. Hereby, students may improve their personal selling and sales management skills. 3. Managing the sales force: The case also allows to discuss the role of sales managers in leading sales people, especially with respect to the question of how they can get the best out of their people and what they can do to support them in their proposal and client management efforts. 4. Client management and retention: And finally – and possibly most importantly – the case sheds some light on the interconnection of winning clients on one side and managing and retaining clients on the other side.

Around 6:00 p.m. on May 31, 2007, Urs Müller and Christoph Burger from ESMT European School of Management and Technology were getting prepared for the presentation. In about an hour they would present their proposal for an executive education program to the CEO of Energie aus Deutschland Systems (EAD Systems) and two of his senior HR managers. Sitting in the lobby of a hotel in western Germany next to the main entrance of the EAD Systems headquarters, Urs recalled the pitching process by scrolling through his notes. ESMT’s pitch to EAD Systems describes the efforts of ESMT European School of Management and Technology to acquire EAD Systems as a client for an executive education program. The case study comprises two parts, A and B, which allow comprehensively reviewing sales management in a professional services firm.

1. Understanding tender processes from the seller’s perspective: The case illustrates the typical process responding to a tender by putting together and proposal and presenting it to a B2B client, in this case a tender for executive education support of a company by a business school. As this particular process is largely in line with the tender process of other professional services such as consultancy, legal advice or auditing etc., the case can also be used to help students understand how professional service firms acquire business. To a lesser extend the case can be used to draw parallels and learnings for other B2B service offers, e.g. maintenance, complex solutions etc. 2. Understanding success factors for selling in tender processes: Beyond a mere description of the proposal process, the case helps students understand how to successfully structure a proposal process and which pitfalls are on the way. Hereby, students may improve their personal selling and sales management skills. 3. Managing the sales force: The case also allows to discuss the role of sales managers in leading sales people, especially with respect to the question of how they can get the best out of their people and what they can do to support them in their proposal and client management efforts. 4. Client management and retention: And finally – and possibly most importantly – the case sheds some light on the interconnection of winning clients on one side and managing and retaining clients on the other side.

This paper studies the effect of new fund flows on investment behavior and the resulting equilibrium price of risk. The small fund industry model shows equilibria with overinvestment in unprofitable and underinvestment in profitable investment opportunities. The large fund industry model derives market prices for risk and analyzes the resulting price distortions in equilibrium. New flow of funds to the asset management industry lead to inefficient investment decisions, mispricing of risk, and distortion of market implied probabilities. Furthermore, the paper provides an explanation for partial market failure and trade among identical asset managers without assuming heterogeneous beliefs.

 

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).

Professor Manfred Kets de Vries and his colleagues have helped thousands of executives to increase their effectiveness in dealing with colleagues and clients, and to refocus their own professional and personal aspirations. This book is a volume of essays on leadership development topics written by academics, coaches, and change consultants. It explores how extraordinary leaders and thriving organizations are created by sharing research methodologies and insights, and by describing intervention and change techniques. Drawing upon substantial research, this book presents the essential leadership models and equips practitioners with tools for developing executive coaches and working with business leaders. This second edition includes new chapters on executive stress and coaching across the gender divide.

Organizational downsizing to cut costs frequently creates new, “hidden costs” that neutralize potential increases in productivity. Customer dissatisfaction is such an overlooked downsizing outcome. Using longitudinal data from the American Customer Satisfaction Index (ACSI), Compustat, and a consumer survey this study analyzes satisfaction outcomes of downsizing. It extends research in this domain to B2C markets and explicitly addresses environmental influences on the downsizing–satisfaction link. Results indicate that there is a negative effect of downsizing on customer satisfaction. It is particularly pronounced for companies (1) with little organizational slack, (2) with high labor productivity, or (3) in industries with high R&D intensity. Moreover, downsizing has a stronger negative impact on customer satisfaction in product categories with (4) high risk importance and (5) low probability for consumer errors as well as (6) low level of brand consciousness. Furthermore, customer satisfaction mediates the effect of downsizing on financial performance. The results provide an explanation for why so many downsizing projects fail and what managers can do to prevent adverse effects of downsizing on customer satisfaction and financial performance.

© Academy of Marketing Science 2014. With permission of Springer