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Article

Nicolas Kachaner, Zhenya Lindgardt and David Michael

The authors warn of an emerging competitive crisis. Multinationals are disrupting competitors and pioneering new price points and applications in the developed world with

Abstract

Purpose

The authors warn of an emerging competitive crisis. Multinationals are disrupting competitors and pioneering new price points and applications in the developed world with lowcost offerings created for rapidly developing economies. This paper aims to address this issue.

Design/methodology/approach

The paper explains how smart lowcost players invest in true innovation targeted at the large, low‐income segments of the population.

Findings

The paper charts a process for implementing lowcost innovation.

Practical implications

Corporate leaders too often underestimate the power of lowcost models to affect their business and wrongly focus their innovation on new products that are more sophisticated, and, thus, more expensive than the models they replace.

Originality/value

A lowcost innovation might cannibalize some of your current profit, but, most likely, it will also expand your market scope in a significant way.

Details

Strategy & Leadership, vol. 39 no. 2
Type: Research Article
ISSN: 1087-8572

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Article

Robert A. Connor

There has been increased interest in expanding the Medicare Prospective Payment System (PPS) to non-Medicare payers to provide incentives for hospitals to contain costs

Abstract

There has been increased interest in expanding the Medicare Prospective Payment System (PPS) to non-Medicare payers to provide incentives for hospitals to contain costs and to concentrate in those Diagnosis-Related Groups (DRGs) which they can provide efficiently. However, this should not force low-volume, low-cost payers to subsidize high cost payers and should not penalize low Length-of-Stay (LOS), low-cost hospitals. This article proposes a new method proportional pricing to expand PPS incentives to non-Medicare payers with equity for payers and hospitals. It would also allow all-payer rate setting and premium price competition among payers to coexist.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 10 no. 3
Type: Research Article
ISSN: 1096-3367

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Article

Marilyn M. Helms, Clay Dibrell and Peter Wright

Synthesizes the contributions of a number of scholars on competitive strategies. Discusses several imperfections in the literature. Submits three propositions for…

Abstract

Synthesizes the contributions of a number of scholars on competitive strategies. Discusses several imperfections in the literature. Submits three propositions for empirical testing in a fragmented industry ‐ the adhesives and sealants industry. The results of the investigation suggest that business units which compete with the low cost strategy and differentiation strategy have higher ROIs than enterprises which compete with low costs only or differentiation only. As a group, however, the high profit firms are not significantly larger in size than the groups of low profit companies studied. Thus, what is elaborated is that competing with both strategies may involve benefits that are not based on advantages of larger market shares and scale economies.

Details

Management Decision, vol. 35 no. 9
Type: Research Article
ISSN: 0025-1747

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Article

Gerald E. Smith

Studies the impact of search cost and prior knowledge on consumer search at different price points in a market price distribution for telecommunications products. In an…

Abstract

Studies the impact of search cost and prior knowledge on consumer search at different price points in a market price distribution for telecommunications products. In an experiment it is found that buyers search differently on premium price products than they do on moderate and low price products, and that this behavior depends on the search costs of the purchase situation and the knowledge of the buyer involved. The results suggest a number of implications for marketers on the role of premium priced brands, ranging from product line pricing strategy to information communication strategy.

Details

Journal of Product & Brand Management, vol. 9 no. 3
Type: Research Article
ISSN: 1061-0421

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Article

Georgios I. Zekos

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination…

Abstract

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

Details

Managerial Law, vol. 45 no. 1/2
Type: Research Article
ISSN: 0309-0558

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Book part

John L. Peterman

A study of the price discounts granted by Morton Salt Company and other producers of table salt in the U.S. on their sales of table salt to grocery wholesalers and…

Abstract

A study of the price discounts granted by Morton Salt Company and other producers of table salt in the U.S. on their sales of table salt to grocery wholesalers and retailers. The discounts were found to be illegal under the Robinson-Patman Act by the Federal Trade Commission and the Supreme Court. The Commission and the Court believed that the discounts were unjustified price concessions granted to “large” buyers, consistent with the concerns of the Robinson-Patman Act. However, the evidence indicates that the most common discount – the “carload discount” – was received by virtually all buyers, regardless of the buyer’s size; the other discounts – “annual volume” discounts – though received primarily by “large” buyers, were likely cost based. The history of the discounts and likely reasons why they were granted are explored in detail.

Details

Antitrust Law and Economics
Type: Book
ISBN: 978-0-76231-115-6

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Book part

Kevin E. Henrickson and Wesley W. Wilson

Following deregulation, the airline industry has dramatically changed. In addition to numerous mergers and bankruptcies, the industry has also seen an influx of small, “low

Abstract

Following deregulation, the airline industry has dramatically changed. In addition to numerous mergers and bankruptcies, the industry has also seen an influx of small, “low-cost” carriers who offer differentiated competition to the traditional legacy carriers. These low-cost carriers traditionally avoided the hub-and-spoke networks of legacy carriers, offering point-to-point service often on adjacent routes. However, events of the past 10–15 years, including the terrorist attacks of 9/11, rising fuel prices, and economic recessions, have led to a shift in the operations of these airlines. The legacy carriers have unbundled many of their services, most notably through baggage fees, seeking to improve efficiency. Low-cost carriers have expanded services into major airports and have shifted to more direct route level competition with the legacy carriers as they use their cost efficiency advantages to their advantage. In this chapter, we examine airport and route choice decision to serve by legacy and low-cost carriers over time. Our descriptive and econometric models point to convergence of operations in terms of the airports and routes that low-cost and legacy carriers serve, with the implication that the current competitive atmosphere improves efficiency as the distinctions between legacy and low-cost carriers have become less obvious.

Details

Airline Efficiency
Type: Book
ISBN: 978-1-78560-940-4

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Article

Byron Sharp

In this article which is based on a marketing analysis of MichaelPorter′s definition of competitive strategies, the confusion present inmarketing and strategic management…

Abstract

In this article which is based on a marketing analysis of Michael Porter′s definition of competitive strategies, the confusion present in marketing and strategic management texts as to the definitions of the three strategies of low cost, differentiation and focus is noted. The idea that using price to differentiate means a firm is using a low cost strategy is dismissed and the value of a definition of focus strategy as merely some degree of extreme differentiation is questioned. New definitions of the three strategies are proposed which are based upon the idea that firms react to, and take actions which influence, the structure of the market in which they operate. They influence market structure through determining the market′s proximity level ‐the minimum level of marketplace performance which a firm must reach in order to compete across the broad marketplace. If a firm has the ability to reach this level and go further to excel in the provision of one or more benefits, it can implement a differentiation strategy. Alternatively, it can attempt to lift the market′s proximity level or partake in imitative activity, which reduces the potential bases for differentiation in the market, a low cost strategy (only sensible for the firm with the lowest costs of production). If a firm lacks the ability to reach the proximity level, it must seek segments which do not require reaching proximity in order to serve them, a focus strategy.

Details

Marketing Intelligence & Planning, vol. 9 no. 1
Type: Research Article
ISSN: 0263-4503

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Article

Agnieszka Zalejska‐Jonsson, Hans Lind and Staffan Hintze

The purpose of this paper is to investigate the commercial aspect of “green” building construction and whether increased investment costs are profitable taking the…

Abstract

Purpose

The purpose of this paper is to investigate the commercial aspect of “green” building construction and whether increased investment costs are profitable taking the reduction in operating costs into account. The investment viability is approached by comparing investment in conventional and “green” residential building, particularly passive houses, using real construction and post‐occupancy conditions.

Design/methodology/approach

The key data were obtained by surveys and personal interviews. The first survey was directed to the companies which had experience of building low‐energy housing and the second survey to housing companies that actively manage operation of low‐energy houses.

Findings

Findings indicate that low‐energy buildings are considered an interesting and sound business opportunity, and investment analysis indicates that low‐energy houses (particularly passive houses) can be more attractive investments than conventional residential buildings. The long‐term strategy of building low‐energy buildings can give competitive advantages. The government initiative and the construction regulations are found to be necessary in eliminating the initial barrier to energy‐efficient projects and achieving long‐term environmental goals.

Originality/value

This paper provides insights into the investment decisions and contributes to the understanding of the construction, operation and profitability of energy‐efficient residential buildings.

Details

Journal of European Real Estate Research, vol. 5 no. 3
Type: Research Article
ISSN: 1753-9269

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Article

Nikolaos Kehayas

The purpose of this paper is to attempt an aerospaceplane design with the objective of Low-Earth-Orbit-and-Return-to-Earth (LEOARTE) under the constraints of safety, low

Abstract

Purpose

The purpose of this paper is to attempt an aerospaceplane design with the objective of Low-Earth-Orbit-and-Return-to-Earth (LEOARTE) under the constraints of safety, low cost, reliability, low maintenance, aircraft-like operation and environmental compatibility. Along the same lines, a “sister” point-to-point flight on Earth Suborbital Aerospaceplane is proposed.

Design/methodology/approach

The LEOARTE aerospaceplane is based on a simple design, proven low risk technology, a small payload, an aerodynamic solution to re-entry heating, the high-speed phase of the outgoing flight taking place outside the atmosphere, a propulsion system comprising turbojet and rocket engines, an Air Collection and Enrichment System (ACES) and an appropriate mission profile.

Findings

It was found that a LEOARTE aerospaceplane design subject to the specified constraints with a cost as low as 950 United States Dollars (US$) per kilogram into Low Earth Orbit (LEO) might be feasible. As indicated by a case study, a LEOARTE aerospaceplane could lead, among other activities in space, to economically viable Space-Based Solar Power (SBSP). Its “sister” Suborbital aerospaceplane design could provide high-speed, point-to-point flights on the Earth.

Practical implications

The proposed LEOARTE aerospaceplane design renders space exploitation affordable and is much safer than ever before.

Originality/value

This paper provides an alternative approach to aerospaceplane design as a result of a new aerodynamically oriented Thermal Protection System (TPS) and a, perhaps, improved ACES. This approach might initiate widespread exploitation of space and offer a solution to the high-speed “air” transportation issue.

Details

Aircraft Engineering and Aerospace Technology, vol. 91 no. 2
Type: Research Article
ISSN: 1748-8842

Keywords

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