Knowledge at Wharton

In Wharton marketing professor George Day’s world the term ”peripheral vision” means the ability of companies to detect interpret and act on distant signals whether a rumor heard about a new rival a newspaper article about a new medical device or the popularity of a blog started by a dissatisfied customer. Day and co-author Paul Schoemaker have written a book entitled appropriately enough Peripher...

As CBS News put it ”When the Fed Chairman Speaks Everyone Freaks.” What that hyperbolic headline refers to is the sell-off in stocks and rise in bond yields this week after Ben Bernanke the Federal Reserve chairman reportedly told a CNBC reporter that markets had misread his testimony before Congress last week during which he had seemed to hint that the Fed might pause in raising interest rates. S...

Rising prices for crude oil and gasoline have alarmed many consumers and put President Bush and other U.S. politicians in a position where they feel they have to do something -- anything -- in response especially in an election year. But members of Wharton’s finance department and private-sector economists say it’s a good time to look rationally at the reasons for the price hikes and their likely...

The recent resignation of Scott McNealy as CEO of Sun Microsystems the company he founded 22 years ago is another milestone in the succession process of a large technology company. But tech companies often pose unique succession issues in part because of their unusually fast growth and young founders according to Wharton faculty and technology experts. The challenges are especially critical when t...

When a well-known compensation consulting firm predicted in early April that new accounting rules wouldn’t have any impact on the use of options as compensation for corporate executives Wharton accounting professor Mary Ellen Carter was ready to disagree. ”That’s just not true ” she says. ”Options will be cut and directors will be switching to restricted stock for executive compensation.” Carter’s...

The 2006 Venture Finals of Wharton’s Business Plan Competition offered participants judges and the audience an opportunity to peer into the future by surveying potential startups. It was a chance to see what aspiring ambitious entrepreneurs believe will be the next hot discovery. At this year’s competition healthcare companies -- ranging from medical-device makers to a creator of artificial muscle...

Popular social network sites including MySpace and Facebook are changing the human fabric of the Internet and have the potential to pay off big for investors but -- given their youthful user base -- they are unusually vulnerable to the next new fad. As quickly as users flock to one trendy Internet site they can just as quickly move on to another with no advance warning according to Wharton faculty...

NutriSystem -- the Horsham Pa.-based online weight-loss company -- has bulked up. Its first-quarter 2006 revenues grew 292% to $146.8 million and net income rose 592% with analysts predicting continued sharp increases in 2006. Memories of its bankruptcy filing and litigation woes under previous owners have all but been erased even as the company plans to target new customer segments and expand int...

When Lawton Robert Burns Wharton professor of health care systems began teaching healthcare management he found a hole in the academic literature. There was plenty of material on physicians hospitals government regulations and insurance. But there was no single source of good information on a key component of the industry -- the producers of healthcare products. Burns aims to fill that gap with hi...

When companies talk about marketing these days they are talking about things like promotional strategy advertising and distribution; customer perception; market share; competitors’ power; margins and pricing; products and portfolios; customer profitability; and sales forces and channels. How does a company measure the effectiveness of the various components of its marketing strategy? What metrics...

Disney the media giant announced earlier this month that the company would provide several major shows -- Desperate Housewives Lost Commander-in-Chief and Alias -- as free streaming video through the ABC network’s website. Also this month the Wall Street Journal reported that the Fox network has signed agreements with 187 of its affiliated stations to share revenues from reruns of its programs on...

Interest rates are rising around the world. Last Thursday April 13 the yield on 10-year U.S. Treasury notes closed at 5.05%. This was the first time in four years that the yield exceeded 5%. Moreover short-term interest rates in the U.S. are also going up: The federal funds rate (or the interest rate at which banks provide overnight loans to one another) has risen to 4.75% from some 1% a few years...

Foreign stocks are soaring and Americans are pouring money into them. But although overseas equities have captured investors’ fancy before there’s a twist this time: More investors are embracing passive index-style investing ignoring the long-held belief that active managers can beat indexers by uncovering bargains in inefficient foreign markets. Have conditions really changed enough to make index...

When James C. Collins and Jerry I. Porras wrote their hugely popular 1994 book Built to Last: Successful Habits of Visionary Companies they began by stating clearly that they did not mean to write about visionary leaders. Their goal was to find visionary companies -- the crown jewels of their industries -- and discover what made them extraordinary. Then questions arose about the extent to which th...

In the second of a two-part interview Azim Premji who owns more than 80% of Bangalore-based Wipro India’s third largest software exporter discusses why that country’s IT companies have done a better job at delivering services than developing products. Speaking with Wharton professor Ravi Aron he points out that customers are beginning to unbundle prices with the result that established IT and cons...

The phrase ”free shipping” is like a siren song to many who shop on the Internet. For whatever reason a free shipping offer that saves a customer $6.99 is more appealing to many than a discount that cuts the purchase price by $10 says Wharton marketing professor David Bell. Bell noticed this phenomenon a few years ago while doing research for an online grocery store and the observation prompted hi...

Consumers’ love affair with expensive customized cups of coffee shows no signs of abating even though most orders consist of little more than a cup of water a splash of milk a spoonful of coffee grinds and 30 seconds of labor. Indeed Starbucks has managed to turn its customers’ craving for caffeine into a $6.4 billion a year business with close to 6 000 company-owned coffeehouses already up and ru...

Corporate leaders must build international organizations to compete in today’s economy and be prepared to defend globalization at home according to Klaus Kleinfeld chief executive of the German electrical and engineering conglomerate Siemens AG. Speaking at a recent Wharton Leadership Lecture Kleinfeld said U.S. concerns about the sale of port assets to a Dubai-based firm and French resistance to...

When General Motors last month offered buyouts and early retirement packages to 113 000 hourly workers the move focused new attention on a key aspect of the continually evolving relationship between employers and employees. Buyouts often signal management’s decision to strategically change the company’s direction and start easing out those workers who are part of what is now considered the old reg...

Roy Vagelos a highly regarded pharmaceutical executive who spent two decades at Merck including 10 years as CEO has often said that ”research remains my life blood ” and indeed he has stayed active in the industry since his retirement from Merck in 1994. For example he is chairman of the board of two small drug companies Regeneron Pharmaceuticals and Theravance and in 2004 co-authored a book entit...

Kevin Werbach a professor of legal studies and business ethics at Wharton spoke recently with David Yaun an IBM executive about the company’s Global Innovation Outlook project. According to Yaun ”traditionally companies have identified innovation with gadgets and gizmos but that thinking is being transformed.” The definition of innovation is being broadened -- it is becoming more open collaborativ...

Everyone uses commodities such as wheat cocoa crude oil butter coal and electricity. But most investors know that speculating on commodities in the futures markets is only for the pros and no sensible amateur would bet his retirement or college funds on sugar silver orange juice or feeder cattle. But are commodities really that risky? Using the most comprehensive data on commodities futures return...

A talking chimp arriving in e-mail inboxes speaks in its sender’s voice through a telephone connection or recites a pre-recorded joke for the boss. Burger King’s ad campaign offers a ”subservient chicken” site where viewers can type in commands to a person in a chicken suit with red garters. JibJab is developing a new site called JokeBox where consumers and corporations can post and share funny vi...

Azim Premji 60 owns more than 80% of Bangalore-based Wipro India’s third largest software exporter which had annual revenues of $1.8 billion in 2005. Forbes magazine reckons that his net worth exceeds $13 billion and it places him at No. 25 in its most recent ranking of the world’s richest people. In the first of a two-part interview with Knowledge at Wharton Premji speaks with Ravi Aron a profess...

In the debate over how to build better models to help the world’s neediest citizens supporters of for-profit social-impact organizations argue that their model is more sustainable than non-profit schemes. Non-profit and foundation executives agree that new paradigms are necessary but caution that for-profit models could ultimately put profit ahead of serving the poor. The issues surrounding this d...