Customer relationship marketing is one of the hottest concepts going these days, influenced in no small part by technological advances that allow companies to accurately profile and track individual purchasers. Though declining in popularity now, the loyalty card was an early attempt at consumer relationship building. Andrew Clemmet looks back at the key issues such schemes raised.

Thoughtful managers sometimes face business problems that raise difficult questions. Sometimes these questions are matters of right versus right, not right versus wrong. There are three basic types of right-versus-right problems: those that raise questions about personal integrity and moral identity; conflicts between responsibilities for others and important personal values; and, perhaps the most challenging, those involving responsibilities that a company shares with other groups in society. This article takes a look at all three of these types through the lens of Edouard Sakiz, Chairman of Paris-based Roussel-Uclaf, developer of the controversial abortion pill RU 486.

Dismissing the conventional wisdom linking revenue growth and shareholder value as only partially accurate and potentially misleading, the authors advance preliminary ideas on a new theory of growth - part of an ongoing research effort at Booz-Allen & Hamilton. In fact, they identify two fundamentally different paradigms, calling them Managed-Growth and Innovative-Growth.

Why do some retailers expanding abroad perform better than others? This article looks at some of the reasons why and introduces the concept of psychic distance in explaining performance variations.

Authors offer a theory of business - creating value that can be captured is the essence of business. The basis of this concept is the idea of added value, a term derived from game theory.

When it comes to foreign trade, U.S. businesses are famous advocates for strong, consistently applied intellectual property rights. Drug companies worry about weak patent law in India and software companies complain about the Chinese approach to property law. But what about the application of intellectual property laws at home? Are many firms more concerned with securing competitive advantage than with ensuring impartial laws?

The legality of trademark protection in gray markets is determined by the principles of: universality, exhaustion and territoriality. Recent cases involving the Tariff, Lanham, and Copyright Acts have restricted the level of legal recourse where parallel imports jeopardize the trademark holder's investment and/or create confusion amongst the consumers. The landmark 1998 L'Anza Supreme Court decision clearly sends a message to trademark owners that legislative protection has been severely limited. The case opened the US market to greater importation of gray goods. This study also has important implications for marketing managers which include:

(1) competition from parallel imports will inevitably test trademarked products in profitable markets with "free-rider" potential;
(2) marketers understanding the law, and willing to devise proactive international strategy, may still find limited protection under the Tariff, Lanham and Copyright Act;
(3) a combination of legal and nonlegal measures may provide the best overall protection;
(4) failure to address gray market activities can erode trademark image and destroy marketing strategies.

Marketers may be best served by minimizing the conditions which create gray markets or looking for nonlegal response alternatives. Proactive strategies, such as the ones described in this article, to limit the opportunities for gray markets could prove the most viable alternatives for trademark protection.

This is a detailed examination, with a case study, of how "re-engineering for growth" should work now that classic business process re-engineering (B.P.R.) has run its course. The first wave of re-engineering emphasized cost. The next wave focuses on creating value and repositioning companies to capture future opportunities.

The authors cite three basic principles for the post-B.P.R. organizational and operational approaches:
1) Enhance the Value for Cost yield. The value-for-cost equation is based on the customer's perceptions, which reflect the value of a company's products and services relative to competitive offerings. The goal is to improve value to the customer while simultaneously reducing the total delivered cost.
2) Realign the Processes and Business Systems for Growth. The re-engineering for growth approach requires changes in perspective, process selection and tools. Many of the classic tools, automation, outsourcing, etc., will still remain useful but new tools are required to realign processes and business systems for growth.
3) Refocus on the Soft Side of Capabilities Development. Mobilizing the entire organization toward the new paradigm of growth will entail a significant increase in training and development, while measurement and rewards will also have to change.

Stephen Davis of Davis Global Advisors expects the most dramatic changes in corporate governance in the next few years to take place in Germany. The Schröder government's elimination of corporate capital gains taxes, effective next January will, he predicts, encourage companies to unwind their cross-shareholdings.

Authors, from the Center for Corporate Community Relations at Boston College, argue that in addition to becoming the investment of choice, a company must become the supplier of choice, the employer of choice and a "neighbor of choice." Included is an 11-step best-practices blueprint for implementing the neighbor-of-choice strategy

Stock options are a great idea run amok, as evidenced by the massive option packages awarded to some high-profile CEOs. Options are given tax treatment so companies have an incentive to depend on them for more of their employee compensation. But options are not free to current investors, as they dilute present and current earnings per share. Bill Mann offers a shorthand he learned from Warren Buffett as a rough instrument to calculate their true cost.

America's best B-school profs share the one thing they hope their students will remember after graduation.

Lee Iacocca was a level 4 leader: effective in running the company but often more committed to self-aggrandizement than the sustained future of the institution. Darwin Smith, the little-known former head of Kimberly-Clark, was a level 5 leader. James Collins, author of Built to Last: Successful Habits of Visionary Companies and the forthcoming book Good to Great, explains the difference.

Authors take a look at how money managers get compensated and whether these compensation schemes provide managers with the incentive to act in the investors' best interests. Their research concludes that certain money managers, due to the generally accepted method of compensation in the mutual fund industry, are likely to increase their portfolio's risk level in an effort to improve their chances of receiving higher bonuses.

The purpose of this workshop is to introduce students to learning with cases. The workshop covers background issues regarding business cases and the case method, the typical anatomy of a business case, and an accepted method for structuring a case analysis.

Corporate venturing has increased dramatically in recent years as companies seek to grab ever more profitable growth. This has raised two important questions. First, is it a management fad or lasting trend? And second, is it for everyone - or are some companies better positioned to create shareholder value through corporate venturing? Bain's findings show corporate venturing to be far from a panacea. It's just one tool among many that can be used to achieve profitable growth, if and when applied appropriately. Here's how.

Article discusses the controversy of whether companies should estimate the present value of employee stock options, when granted, and then account for them as a current expense. Though the article is a little dated (referring to an old FASB proposal), the issues addressed continue to be relevant.

Increased understanding of consumer preferences for foreign versus domestic products and the linkage to price and quality attributes can facilitate more effective product positioning, more efficient strategy development, and overall knowledge of the dynamics of international markets. According to this study of American shoppers, consumers appear to prefer domestically manufactured goods and are often willing to pay a higher price for them. Read on for more findings and for a nice high-level introduction to the idea of conjoint analysis.

Eight pioneers in the area of selling subscriptions to Web sites and email newsletters, including leaders from three of the top four subscription sites online today, shared their marketing, business model and profitability details during an all-day event held by ContentBiz. Here's a quick summary of notes from the
event.

Note: Older EBF articles are not currently online. I'm not sure if this is temporary or permanent. If you click you will be taken to the Archive.org site to find an archived copy.

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Valter Lazzari, Full Professor of Banking and Finance at Università Cattaneo and Università Bocconi, Milan introduces this important topic with an essay on first principles, current debates and future prospects. Then eight other experts explore a range of issues including differences between North American and European practices, regional models within Europe, the impact of voting restrictions, the challenge for financial institutions and NGOs, and the attractions and shortcomings of the two-tier board approach. Then Graham Gilmour pulls together the different strands of the debate and offers a practical way forward for managers.

Editor's Note: For more from EBF on corporate governance, see
Board performance, not just board conformance
http://www.mbadepot.com/redir.php?ID=1756&file=links
Corporate Governance Audited
http://www.mbadepot.com/redir.php?ID=1501&file=links
Corporate Governance - Equity culture at risk
http://www.mbadepot.com/redir.php?ID=2930&file=links
Quis Custodiet Ipsos Custodes?
http://www.mbadepot.com/redir.php?ID=2932&file=links

Short article centers on a traditional 2x2 consulting matrix for purchasing, with the price as the x-axis and cooperation as the y-axis. This high-level analysis is interesting in that it was published in early 1996 before the huge SCM craze.

Editor's Note: This is part 1 of a 3-part series.
Part 2: "Systems, Modules or Components? New Light on Purchasing"
Part 3, "Setting Supplier Cost Targets: Getting Beyond the Basics"

Abstract: The Internet stimulates trade. Using a gravity equation of trade among 56 countries, we find no evidence of an effect of the Internet on total trade flows in 1995 and only weak evidence of an effect in 1996. However, we find an increasing and significant impact from 1997 to 1999. Specifically, our results imply that a 10 percent increase in the relative number of web hosts in one country would have led to about 1 percent greater trade in 1998 and 1999. Surprisingly, we find that the effect of the Internet on trade has been stronger for poor countries than for rich countries, and that there is little evidence that the Internet has reduced the impact of distance on trade. The evidence is consistent with a model in which the Internet creates a global exchange for goods, thereby reducing market-specific sunk costs of exporting.

Note: Darwin Magazine is now dead. Some articles are moving to CIO. I will try to update the links when I have time...

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"Many corporate executives have a faulty understanding of just how to go about doing the kind of intelligent intelligence gathering that will keep them one step ahead of the competition. While corporate CI [competitive intelligence] units need to know the arsenal of dirty tricks competitors might use against them, specialists say they should also understand that good competitive intelligence can often be accomplished without resorting to such shenanigans. If you know what you're doing, they say, the information you seek about your competitor's plans can usually be obtained by legitimate 'open source' means."

Under the leadership of Mike Ruettgers, EMC bounced back from a near-death experience to become one of the "four horsemen of the Internet." At the heart of EMC's rise has been its fanatical devotion to customer service. The company has benefited from this critical insight: If you want service to pay off, don't treat it as a profit center.

A good look at why people resist change, drawing largely from the book "Managing at the Speed of Change" by Daryl R. Conner. Offers more insight on why people resist change than on how to counter the resistance.