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The Crisis and the CFO
At a recent Wharton Finance Conference, Morgan Stanley's newly named CFO cited progress and challenges since the terrifying early days of the financial crisis.
TARP Sees Sharp Turnaround
Estimated TARP fund losses tumble by $200 billion. Is it a real savings?
Stepping on the Gas
With top-level shakeup, GM shows --it is is serious about change.
Paid vs. Free Content, Publishing Pains, Apple Tablets and All That ...
Two recent events have rocked the publishing world. First, The New York Times said it would abandon the practice of providing free online content and start charging regular readers beginning in 2011. And second, Apple's much-hyped tablet -- the iPad -- made its appearance. What implications will the Times' decision have for newspaper publishers and other providers of free online content? How will the iPad re-define what a book means, as well as how it is produced, marketed and delivered? Wharton professors Peter Fader and Stephen Kobrin weigh in.
Pharma Is at Pains to Replace Blockbusters: Has It Found the Cure?
As the pharmaceutical industry comes to grips with the expiration of some $130 billion in patented products over the next four years, executives can no longer bank on a single drug like Lipitor to drive earnings. Instead, they are aiming to diversify their drug portfolios, hoping to develop products for far less than the $800 million-plus figure often cited as the price of bringing a new drug to market. According to industry experts, new paths involve innovative business models and unfamiliar risks, including allowing outsiders to see company secrets at earlier stages and mimicking biotech venture capital models.
'Warm' or 'Competent'? What Happens When Consumers Stereotype Nonprofit and For-profit Firms
Nonprofits are presumed generous, kind and honest, and for-profits competent, capable and skillful. Such are the findings of new research about how consumers pigeonhole both types of organizations. Fair or not, these stereotypes are powerful enough that they can affect not only general product and brand perceptions, but also consumers' willingness to make a purchase, according to Wharton marketing professor Cassie Mogilner, one of the study's authors. For a growing number of nonprofits and for-profits, the authors note, changing these perceptions may be a matter of survival.
One Ambivalent Economy + Many Cautious Employers = One Difficult Job Market
More than seven million jobs have been lost during this recession, and so far, few have come back. When jobs do return, say experts, many will be temporary, contract or short-term. Risk-averse employers seeking cost savings and flexibility will outsource whatever they can to smaller firms or independent contractors before hiring full-time employees. That means job seekers will have to be more flexible, willing to take short-term assignments or relocate to places where jobs are plentiful.
Apple's iPad: A Gadget Killer -- or Just Another Gadget?
Apple, which brought consumers such hits as the iPod and iPhone, is wading into a new product category with the launch of its iPad, a touch-screen tablet computer that CEO Steve Jobs has said puts "the Internet in your hands" -- and apparently much more. In fact, Apple has positioned the iPad as a universal device that not only functions like a laptop but also can play music, movies and video games, show pictures and hold a library of books. That puts it in direct competition with netbooks and popular single-use gadgets like Amazon's e-book reader, the Kindle. Will iPad be the one device that fits all, or will it just become one more gadget to juggle?
Brands on the Brink: Marketing in a Down Economy
Among other victims of the recession, brands have taken a beating. Private labels have gained market share. Consumers are cutting back. Retailers are turning up the heat. According to panelists who gathered to discuss brand strategy at a recent Wharton Marketing Conference titled, "Connecting with the Evolving Consumer," marketers need to be especially innovative when it comes to making sense of the shifting economy -- and profiting from it. As one panelist noted: "I think we're finding now that [no products are] recession proof."
U, V or W: What Kind of Recovery Can We Expect, and When?
Delegates to the just-ended World Economic Forum in Davos, Switzerland, found plenty of positive economic signs -- but not enough to keep them from wringing their hands. The consensus at the five-day gathering called for strong growth in emerging markets like China, India and Brazil, and poor growth in Japan and much of Europe, with the United States somewhere in between. The Forum's official statement called the global recovery "fragile."
Quality on the Line: The Fallout from Toyota's Recall
More than any other auto manufacturer, Japan's Toyota has built its name on quality. Now, the identity of the world's largest car maker is in question as it recalls millions of vehicles because they may suddenly accelerate, putting the lives of drivers and their passengers at risk. The firm will need to grapple with numerous operational, marketing, ethical, legal, political and strategic issues -- all at a time when the entire industry is struggling, experts say. As one Wharton faculty member notes: "Toyota is having to stop the line at the corporate level in a big way."
Global Real Estate: Ready for a Rebound?
The global real estate community is breathing easier than it was a year ago, judging by the sentiments of participants at a recent Knowledge@Wharton global real estate forum titled, "The Road to Recovery: Investing in the Global Real Estate Rebound." Held at the New York Stock Exchange on December 11, in conjunction with Interconnect Events, the forum focused on the developed world's challenges in freeing up private capital and finding opportunities in distressed real estate assets, among other topics. According to some speakers and panelists, opportunities that receded in the West in the wake of the financial crisis can still be found in emerging markets, although the barriers to entry remain high.
Adobe Co-founder John Warnock on the Competitive Advantages of Aesthetics and the 'Right' Technology
John Warnock's sense of aesthetics, combined with a strong belief "in doing things right" technically, has driven Adobe Systems -- the company Warnock founded with Charles "Chuck" Geshcke -- throughout much of its history. Yet while that passion has led to the development of many of Adobe's most successful products and the establishment of key standards for print and interactive publishing, it has also hampered the company in responding to some of the major shifts in technology, like the rise of the web. In an interview with Knowledge@Wharton, Warnock talks about Adobe's history and its business strategy, as well as topics like why he avoids using Microsoft software and why he believes Apple CEO Steve Jobs should re-engage a partnership with his company.
Seeing Red: What Are the Costs of China's Currency Policy?
In the depths of the recession, many critics of China's currency policy -- which keeps the yuan artificially low in value -- held their tongues. After all, that policy allowed other countries, especially the United States, to borrow from China the vast sums they needed to stimulate their economies. But now that the world economy is improving, some are resuming the call for China to let the yuan gain strength, and eventually to float freely -- as the dollar, euro and yen do -- allowing other nations to better compete with China's exports. What is the best currency policy? Are China's interests really at odds with those of the rest of the world? Wharton faculty and other experts weigh in.
Higher Profits for the Major Record Labels? New Research Suggests a Counterintuitive Strategy
Over the last decade, much has changed for digital music consumers -- including the growing array of mobile music and the rise of several new business rivals to Apple's iTunes store. But one thing has been remarkably steady -- the price, long established at 99 cents for the majority of individual songs. New research by Wharton marketing professor Raghuram Iyengar suggests that the major record labels, which have not always been happy with the iTunes pricing strategy, could be making higher profits from their music catalogues -- not by raising their prices, but by lowering them.
Full of Beans: How a Classically Trained Chef Reinvented Fast Food
Steve Ells started out with a hole-in-the-wall restaurant offering fast food that was quick and unpretentious. Today, Chipotle Mexican Grill is a publicly traded company with $1.3 billion in revenues from some 900 restaurants across North America. In November, Ells formally announced plans for the first European Chipotle. It's been quite a U-turn for someone whose dream at one point was to open a white-tablecloth, haute-cuisine restaurant. During a recent Wharton Leadership Lecture, Ells talked about his goal of changing the way people think about fast food.
Will Google's Nexus One Change the Wireless Industry?
On January 5, Google launched the Nexus One -- its new "superphone" -- with a good deal of fanfare. Although the launch itself was quickly overshadowed by the online giant's surprise showdown with China over censorship, the company's attempt to rewrite the rules of the wireless industry has not gone unnoticed. Through its online store, Google is selling the Nexus One directly to consumers, sidestepping service providers that operate as device gatekeepers under the traditional sales model. The operation is off to a somewhat rocky start, leaving some observers to wonder whether Google can adapt to its new role in direct sales, but the bigger question is whether Google can alter consumer behavior and the economics of an entire industry.
Flexing Its Muscle: Why Manufacturing Is Bouncing Back
Is the manufacturing sector getting more respect? Although it represents a declining share of the U.S. economy, signs of a manufacturing rebound in the nation and around the world seem to be another indication that the global recession is coming to an end, according to Wharton faculty and a number of economists. At the same time, they note, the rise in industrial production may be tempered by weakness elsewhere in the economy, including continued high unemployment and slow growth in consumer spending.
Crisis in Haiti: Where Do We Go from Here?
The earthquake that rocked Haiti last week has caused unimaginable death and destruction, a reminder that catastrophes are usually unforeseeable and therefore almost impossible to prepare for. Can any country or region of the world, rich or poor, take meaningful steps to avoid the destruction caused by catastrophes ranging from earthquakes and hurricanes to terrorist attacks and pandemics? Knowledge@Wharton asked professors Howard Kunreuther and Michael Useem, authors of a new book titled, Learning from Catastrophes: Strategies for Reaction and Response, and Morris A. Cohen to talk about the situation in Haiti and the challenges of dealing with such crises.
Domestic Dynamics: Why Latin America's 'New Resilience' Will Keep Growth in Reach
Stronger than developed markets but weaker than Asia -- according to analysts, that's how best to describe Latin America's growth prospects in 2010. With a new-found dynamism, all eyes across the region will be focused on the strength of economic recovery and business expansion in the months ahead. On the back burner for now: reforms addressing the region's longer-term competitiveness.
Global Interdependence: Are the U.S and Other Markets 'Sowing the Seeds' for the Next Crisis?
Despite renewed GDP growth and other positive signs, the U.S. isn't out of the woods, says Wharton finance professor Franklin Allen. In fact, the country could be heading into a "double dip" scenario that tips it back into a recession. That depends on how a number of factors play out in the coming months -- or even years -- not only in the U.S., but also around the world. Global interest rate policies, property markets and public deficits will all demand attention, Allen notes in a recent interview with Knowledge@Wharton.
The Indian Economy in the Next Decade: Déjà Vu with a Difference
As the new decade begins, India's economy seems headed for strong growth. Optimists predict the country's GDP could increase between 7% and 9% in 2010, stocks are likely to go up, and middle class consumption will continue to drive domestic demand. Still, experts also point to some problem areas, such as rising inflation and a widening fiscal deficit, which is close to 7% of GDP.
Australia's Economic Forecast for 2010: Can the Upbeat Outlook Be Sustained?
Bolstered by an expanding resources sector and energy-hungry Asian trading partners, Australia is the only major economy to have avoided a technical recession in 2009 -- recording only one quarter of contraction in gross domestic product. Indeed, the commodity-rich country is being called the "wonder from down under" as the nation enters its 19th straight year without a recession. Some business leaders, however, are cautious about the speed of the economic recovery. Many expect business conditions to remain difficult, noting that aggressive cost cuts and productivity gains -- rather than a strong pickup in demand-led revenues -- boosted earnings.
