Investment-Timing and the Threat of Disruption

<p>An incumbent firm needs to determine how to best manage the risk of the arrival of a disruptive technology. The numerous actions available to the incumbent firm indicates a complex real-options model of investment is required. This thesis investigates the behaviour of an incumbent firm, with assets-in-place, when they have access to an investment opportunity. The incumbent must not only choose when to invest in the opportunity, but also the optimal structure with which to compete against a new entrant who also has this investment opportunity. In order to delay competition in the market the incumbent can elect to permanently abandon the innovative option rather than seek to compete with the new entrant. The assets-in-place contributes significant value to the incumbent and by delaying the competition effect, the incumbent can reduce the cannibalization of assets-in-place. This is despite the fact that the incumbent can attempt to profitably invest in the innovation before the entrant. Clearly the assets-in-place provide a benefit to firm value for the incumbent, but act as a burden for the growth option’s development. Should consumer preferences begin to favour the innovation, then the decision to abandon the growth option loses its value. The incumbent in this instance does not care that they may accelerate the entrant’s investment as they can still profitably preempt the entrant. In a competitive market, when the incumbent efficiently produces the innovation at no extra cost compared to an independent firm, the incumbent will elect to internalise, rather than spin off, the growth option. When the incumbent produces the innovation at a higher cost, than other market participants, they will spin off the growth option instead of internalising. When consumers favour the innovation, the incumbent becomes indifferent between spinning off and internalising the growth option as the objective functions in both cases converge to maximising the value of the growth option.</p>

Investment-Timing and the Threat of Disruption

<p>An incumbent firm needs to determine how to best manage the risk of the arrival of a disruptive technology. The numerous actions available to the incumbent firm indicates a complex real-options model of investment is required. This thesis investigates the behaviour of an incumbent firm, with assets-in-place, when they have access to an investment opportunity. The incumbent must not only choose when to invest in the opportunity, but also the optimal structure with which to compete against a new entrant who also has this investment opportunity. In order to delay competition in the market the incumbent can elect to permanently abandon the innovative option rather than seek to compete with the new entrant. The assets-in-place contributes significant value to the incumbent and by delaying the competition effect, the incumbent can reduce the cannibalization of assets-in-place. This is despite the fact that the incumbent can attempt to profitably invest in the innovation before the entrant. Clearly the assets-in-place provide a benefit to firm value for the incumbent, but act as a burden for the growth option’s development. Should consumer preferences begin to favour the innovation, then the decision to abandon the growth option loses its value. The incumbent in this instance does not care that they may accelerate the entrant’s investment as they can still profitably preempt the entrant. In a competitive market, when the incumbent efficiently produces the innovation at no extra cost compared to an independent firm, the incumbent will elect to internalise, rather than spin off, the growth option. When the incumbent produces the innovation at a higher cost, than other market participants, they will spin off the growth option instead of internalising. When consumers favour the innovation, the incumbent becomes indifferent between spinning off and internalising the growth option as the objective functions in both cases converge to maximising the value of the growth option.</p>

Bundling for Flexibility and Variety: An Economic Model for Multiproducer Value Aggregation

Many markets feature an economic structure in which value is cocreated by multiple producers and aggregated into a common bundle by a producer-consortium or independent firm. Examples include in-home video entertainment, technology goods and services, multisourced data platforms, and patent pools. This paper develops an economic model to study demand, production choices, revenue sharing, and relative market power in such markets. Producers in these markets are not rivalrous competitors in the usual zero-sum sense, because output of each casts an externality on production decisions of others and total market demand expands with total output, albeit with diminishing returns. This property allows multiple producers to flourish in equilibrium (versus just one with the most favorable technological or cost structure), and more so when the market expands less quickly with total output. Equilibrium production quantities of competitors are strategic complements, yet competition between producers does manifest itself, for example, if one acquires better production technology (i.e., makes value units at lower cost) then the equilibrium production levels of other producers are reduced. Insights are also derived for alternative market structures, for example, producers have more output and earn higher profit when organized into a distribution consortium (e.g., Hulu or consortia of zoos or museums) versus relying on a separate retailer. Mergers between producers have similar effect. The formulation enables us to rigorously answer economic questions ranging from pricing, revenue sharing, and production levels in a static setting, to market dynamics covering both the causes and effects of changes in industry structure. This paper was accepted by Chris Forman, information systems.

Differing Views of Lodging Reality: Airdna, STR, and Airbnb

Airbnb is an Internet-based firm that connects potential short-term renters with hosts who own or control rental properties. Its rapidly expanding activities are tracked by Airdna, an independent firm that generates seemingly conventional performance metrics describing Airbnb. These metrics include occupancy rates, average daily rates, and revenue per available room. However, Airdna does not adhere to long-established STR definitions for these variables. Using data from Virginia Beach, Virginia, we demonstrate that Airdna’s performance metrics exhibit notable upward biases vis-á-vis STR’s metrics. Potential rental hosts, hoteliers, tax collectors, and investors are at risk if they act on the assumption that Airdna’s metrics are comparable with widely understood measures used by STR and tourism experts.

KEKUASAN CEO DAN PEMILIHAN AUDITOR

ABSTRACTThis study purposed to find the impact of CEO power on auditor choice, Big4 or Non Big4. The research supported by delegation of authority to appoint independent auditors as variable independent, firm size and firm performance as variable control. Sampel research are manufactur firms listing at Bursa Efek Indonesia from period 2006-2015. From total 160 manufacture firms, 148 firms meets the criteria. Hypothesis test using logistic regression with SPSS 21th. This research find that CEO power have negative significant impact to auditor choice Big4, delegation of authority have positive significant impact to auditor choice Big4, firm size have positive significant impact to auditor choice Big4, firm performance have positive significant impact to auditor choice Big4.ABSTRAKPenelitian ini bertujuan untuk mengetahui dan menganalisis pengaruh kekuasaan CEO terhadap pemilihan auditor Big4 atau non Big4. Penelitian ini juga didukung dengan variabel bebas lain yakni variabel delegasi wewenang penunjukkan auditor independen serta variabel kontrol berupa ukuran perusahaan, kinerja perusahaan. Sampel yang digunakan merupakan perusahaan manufaktur dan yang terdaftar di Bursa Efek Indonesia tahun 2006-2015. Dari total 160 perusahaan manufaktur,sebanyak 148 yang memenuhi kriteria sampel penelitian yang telah ditetapkan. Pengujian hipotesis menggunakan regresi logistik dengan bantuan SPSS 21. Hasil penelitian ini menunjukkan bahwakekuasaan CEO berpengaruh negatif signifikan terhadap pemilihan auditor Big4, delegasi wewenang kepada dewan komisaris berpengaruh positif signifikan terhadap pemilihan auditor Big4, ukuran peruusahaan berpengaruh positif signifikan terhadap pemilihan auditor Big4, kinerja perusahaan berpengaruh positif signifikan terhadap pemilihan auditor Big4

Meningkatkatkan Kecerdasan Spiritual Melalui Bermain Peran Penelitian Tindakan di KB & TK Bunga Bangsa Islamic School Bekasi

In general, the purpose of this study is to obtain data about the spiritual intelligence of children aged 5-6 years in the center of al Islam KB TK Bunga Bangsa Islamic School through role play. This research was conducted at KB TK Bunga Bangsa Islamic School Bekasi which is located on Jl. Kh. Agus Salim Number 206, Kelurahan Margahayu, District of East Bekasi, Kota Bekasi, West Java Province. Specifically this research will see how big role play can improve every aspect that exist in spiritual intelligence for children aged 5-6 years at KB TK Bunga Bangsa Islamic School Bekasi. This research was conducted in second semester of academic year 2016/2017. This action study was conducted using a cycle model from Stephen Kemmis and Mc Taggart. Action research is carried out through planning, implementation, observation and reflection. This research was conducted in two cycles and started with pre-research activities. The average praintervensi result is 57%, in cycle 1 the result is 65,5% and cycle 2 reaches 80% on average. From the data there is a significant increase in each cycle. Improvement is seen in every aspect that depicts children's spiritual intelligence such as self-awareness, spontaneity, internally motivated, seeing life from vision and based on fundamental, holistic values, seeing system and universality, compassion (sense of community, sense of following the flow of life) diversity, independent, firm against the majority, fundamentally questioning, rearranging in the big picture, and steadfast in difficulty.Thus, the learning process through the role play to improve spiritual intelligence is said to have been achieved because most of the indicators in the competence of the ability of spiritual intelligence has increased. The implication of this research is that role playing can be one strategy to improve spiritual intelligence.

Where Have All the IPOs Gone?

During 1980–2000, an average of 310 companies per year went public in the United States. Since 2000, the average has been only 99 initial public offerings (IPOs) per year, with the drop especially precipitous among small firms. Many have blamed the Sarbanes-Oxley Act of 2002 and the 2003 Global Settlement’s effects on analyst coverage for the decline in IPO activity. We find very little support for the conventional wisdom, and we offer an alternative explanation. Our economies of scope hypothesis posits that the advantages of selling out to a larger organization, which can speed a product to market and realize economies of scope, have increased relative to the benefits of operating as an independent firm.

Making medicine a business in Japan: Shimadzu Co. and the diffusion of radiology (1900–1960)

This contribution focuses on the role of the firm Shimadzu in the marketing of X-ray machines in Japan during the first part of the 20th century, viewed from a business history perspective. It attempts to further understanding of the process of technology diffusion in medicine. In a global market controlled by American and German multinational enterprises, Japan appears to have been a particular country, where a domestic independent firm, Shimadzu, succeeded in establishing itself as a competitive company. This success is the result of a strategy based on both the internalisation of technological capabilities (recruitment of university graduate engineers, subcontracting of research and development activities) and an original communication policy towards the medical world. Finally, the specific structure of the Japanese medical market, composed of numerous and largely privatised small healthcare centres, facilitated the rapid diffusion of X-ray machines, a new technology which conferred a comparative advantage on its holders.