Knowledge at Wharton

If you don’t yet know about the Webkinz craze you soon will especially if you have children of your own or at least know one or two on your block. Webkinz are essentially stuffed animal ”pets ” but what makes them different from other hot toys of years gone by -- Cabbage Patch Kids Beanie Babies Tickle Me Elmo and even the century-old teddy bear -- is the business model behind them. By melding the...

The sub-prime mortgage crisis and the credit crunch that has followed in its aftermath are taking their toll on the housing market. On August 28 the S&P Case-Shiller U.S. National Home Price Index showed that home prices fell 3.2% in the second quarter. According to the National Association of Realtors the inventory of unsold homes is at a record high. As sales have fallen many home builders h...

In August less than three months after the introduction of Apple’s iPhone a New Jersey teen announced that he had ”hacked” into the mobile-communications device. The hacker was clearly expressing the frustration that many consumers feel towards Apple for adopting a ”walled garden” -- as opposed to an ”open architecture” or ”open plain” -- corporate strategy. While the walled garden approach often...

The quest for cool is never-ending. Accountants rev up their Harleys to the dismay of hard-core bikers. Soccer moms trade in minivans for hipper Land Rovers. Yellow rubber wristbands appear instantly then just as quickly disappear. There is a fine line between cool and not-so-cool -- a topic explored in a new paper Where Consumers Diverge from Others: Identity Signaling and Product Domains by Whar...

The idea of ”McJobs”-- low-paying positions with little chance of advancement -- bothered the CEO of McDonald’s so much that when Merriam-Webster included the term in its dictionary in 2003 he wrote a public letter of protest. His plea went unheeded. ”McJobs” stayed. As this anecdote suggests the idea that franchises especially those in the fast-food sector create dead-end jobs is widespread. Yet...

”Risk” is a term that comes up frequently when people discuss medicine and health: What’s my risk of heart attack? Breast cancer? What’s my risk of dying from a complication of surgery? Or having a dangerous reaction to a drug? But according to Mark V. Pauly Wharton professor of health care systems consumers don’t necessarily use that term in the same way that medical and insurance experts do -- w...

In an interview with Knowledge at Wharton one year ago Michael Dell declared his support of then-CEO Kevin Rollins indicated that supply chain efficiencies and direct sales gave the company a competitive edge and added that his namesake company was making great strides in customer service. What a difference a year makes. Michael Dell took over the reins from Rollins on January 31 and set out to re...

As sales of Apple’s iPod Coca-Cola and North Face clothing show despite serious challenges from private label manufacturers and low-price global production branding remains an important way for consumers to choose among products in a crowded marketplace. Brands are a short-hand means of conveying quality and lower risk according to Wharton faculty and marketing analysts and they also play a growin...

After weeks of skittishness and fear investors showed signs on Tuesday of settling down. ”Yesterday was one of the dullest days in the market that we’ve had in a while and that’s good in many ways ” says Wharton finance professor Jeremy Siegel. Investors have been reeling from widespread problems in the subprime sector stocks have fallen yields on Treasury securities have dropped and some companie...

For those entrepreneurs who want to run a company but prefer to skip the start-up stage search funds offer a possible alternative. A specialized form of private equity first launched in the mid-1980s search funds are becoming increasingly popular -- and their supporters claim they can offer investors attractive returns and business owners a compelling exit strategy. What does this trend in private...

Mattel’s recall of more than 10 million toys in the U.S. over the past three weeks has done more than focus attention on the company’s wide array of products which include such household names as Elmo Ernie Big Bird Barbie and Batman. It has also further raised public awareness of quality control problems in China and the relentless push to cut costs along every step of the supply chain. Knowledge...

It’s open season on Microsoft Office. Google is distributing Sun Microsystems’ StarOffice and also has its own web-based productivity suite. Apple has a new spreadsheet called Numbers to compete with Microsoft’s Excel. Open source suite OpenOffice along with several web-based products are attacking as well. All these challengers emerge at a time when Microsoft’s dominance in productivity software...

The long-term performance of a company’s stock may be the ultimate test of a CEO’s talents. But that’s not the only measurement used by boards of directors to gauge how well the boss is doing. Experts at Wharton and elsewhere say that companies use many different metrics -- all of which can be fine-tuned to fit a company’s circumstances. Hosted on Acast. See acast.com/privacy for more information.

Several years ago while visiting a regional branch of Lee Hecht Harrison a global career management services company then-president Stephen Harrison was stopped short by ”Ray ” his COO. ”You didn’t greet the receptionist ” said Ray who went on to explain that ”a receptionist is a corporate concierge. They will talk to more important people in a day -- suppliers customers even CEOs -- than you will...

Over the past two decades sushi -- a familiar accessible and immensely desirable food that can be found in supermarket aisles and fast food outlets as well as high-end restaurants -- has become a staple of cultures around the globe. Indeed far from signaling the snobbery of those who eat it sushi today belongs to the masses. Yet sushi also says something important about how wealth taste and market...

Wharton marketing professor Leonard Lodish admits he is somewhat to blame for the erosion in brand pricing power that has hit many consumer-goods companies -- but not entirely to blame. In 1993 as store-level scanning data started to become widely available Lodish coauthored an article outlining its power to gauge the effect of price promotions on revenue. But he also warned that these tools were...

On August 1 Mattel recalled approximately 1.5 million toys made by a manufacturer in China because of dangerous levels of lead in their paint. Four days earlier the Chinese government ordered the country’s banks to increase their reserves as part of an effort to cool down its red-hot economy. But quality concerns and rapid growth aren’t China’s only worries. There is also the government’s need to...

In June a high-profile Supreme Court case held the attention of retailers and manufacturers alike. In a five-to-four ruling the high court overturned a lower-court decision to award $1.2 million to a Dallas-area clothing store that was cut off by a supplier Leegin Creative Leather Products because the retailer refused to abide by the manufacturer’s retail price maintenance (RPM) or no-discount pol...

Fast-growing social networking site Facebook and mobile messaging service Twitter didn’t introduce break-through technologies but they have become phenomenal success stories nonetheless. Increasingly ”web 2.0” companies like these are altering the traditional venture capital formula which used to count technology differentiation as a key requirement when evaluating new targets. In many cases techn...

Prediction markets where people bet on everything from the likelihood that a movie will be a hit to the chance that a politician will become president to whether the stock market will go up or down are in vogue. But because prediction markets have to be managed they aren’t always the ideal way to get information. Wharton professors Albert Saiz and Uri Simonsohn have found a cheaper way to deliver...

This spring World Bank president Paul Wolfowitz was forced out after being accused of arranging a big raise and promotion for a woman with whom he was having a relationship. As anyone who works in an office knows though favoritism isn’t confined to love and sex: Family relationships and close friendships can upset co-workers’ sense of fairness too and end up undermining an organization’s performan...

The secret to long-term CEO success according to David Nadler is conceiving of a CEO’s tenure as a performance with a series of distinct acts. ”Each act requires the CEO to lead think and behave in fundamentally different ways. The successful ones are those who are able to make the transitions ” says Nadler a consultant to boards and senior executives who spoke during the recent 11th annual Wharto...

Producing a feature-length motion picture is a daunting task especially if you do it without the support of a major studio using money you have raised yourself. But according to independent filmmaker Lance Weiler ”the real struggle” comes after the film is completed. Distributing a theatrical feature -- and doing so profitably -- poses an even greater challenge. As Weiler noted during a recent int...

U.S. stock markets are in a tizzy. The Dow Jones Industrial Average plunged 311 points on July 26 and most media companies interpreted this to mean the end of the buyout boom. Buyout firms such as the Fortress Investment Group and the Blackstone Group were hit especially hard. How long will the turmoil continue? Could the trouble spread overseas to international markets? What is the right strategy...

Following accounting and governance scandals at Enron and other U.S. companies policymakers in the United States and elsewhere responded by establishing new corporate governance rules including the Sarbanes-Oxley Act. Now after complaints from the business community that regulations are hurting profits some countries are taking a second look at post-Enron reforms. But according to research present...