Co-Opetition - Adam M. Brandenburger [139]
18. BusinessWeek, August 1, 1994, pp. 28–29.
19. BusinessWeek, February 13, 1995, p. 40.
20. The program saves marketing costs and lowers credit-card churn and its associated costs. It may also get people to buy cards sooner, which would raise GM’s added value somewhat.
21. Telephone interview, December 16, 1994.
22. For an interesting discussion of the U.S. antitrust stance toward so-called facilitating practices (in particular, some of the rules we’ve been looking at), see Michael Weiner, “Distinguishing the Legitimate from the Unlawful,” Antitrust, Summer 1993, pp. 22–25. See also the pioneering analysis of Georgetown University professor Steven Salop, “Practices That (Credibly) Facilitate Oligopoly Co-ordination,” in New Developments in the Analysis of Market Structure, J. Stiglitz and G. Mathewson, eds. (Cambridge: MIT Press, 1986).
23. Federal Trade Commission Decision, January 1, 1983, to June 30, 1983, vol. 101, pp. 657, 683.
24. In a larger sense, it was all a moot decision. The product in question, lead-based fuel additives, was headed for extinction with the end of leaded gas. By the end of 1985 Ethyl had exited the business, and Du Pont was down to one plant in New Jersey.
25. For example, companies can give volume discounts only to the extent that it is less expensive to serve large customers. The law itself is anticonsumer. It was designed to protect small corner grocery stores from the large supermarkets.
26. Sec. 2(b) of the Clayton Act, 38 Stat. 730 (1914), as amended, 15 USCA sees. 12–27 (1977).
7. Tactics
1. Fortune, June 13, 1994, p. 84. Also see R. Garda and M. Marn, “Price Wars,” McKinsey Quarterly, no. 3, 1993, pp. 87–100.
2. Actually, convincing the publisher that the book will come in on time may well be impossible. This is because authors almost always underestimate how long it will take to write a book: if they were more realistic about the time needed, they would never agree to do it. (As we write this, our book is one month late. Well, really two months late, but who’s counting?)
3. Richard Dawkins, The Selfish Gene (New York: Oxford University Press, 1976), p. 171.
4. Ibid., p. 172.
5. New York Times, July 4, 1994, p. 39.
6. Financial Times, August 23, 1995.
7. Peter Robinson, Snapshots from Hell: The Making of an MBA (New York: Warner Books, 1994).
8. The standard royalty rate is 10 percent on the first five thousand copies, 12.5 percent on the next five thousand copies, and 15 percent thereafter.
9. This is why you’d rather not be hired by a committee. If no one person is on the line for how you perform, it’s harder to find a guardian angel.
10. An interesting question is to whom should the guarantee be paid, the sender or the receiver? Sometimes it’s the sender who suffers a large cost if the package doesn’t make it, while other times it’s the receiver. While the two parties could in principle figure out how to split any award that is made, that might just add to the tension at the time of failure. To keep things simple, why not just pay each of the two parties $100 and leave it at that?
11. See, for example, Christopher Hart, “The Power of Unconditional Service Guarantees,” Harvard Business Review, July/August 1988, pp. 54–62.
12. For details, see “Gillette’s Launch of the Sensor,” Harvard Business School Publishing, 9-792-028, 1991.
13. Arthur Conan Doyle, The Complete Sherlock Holmes Short Stories (London: John Murray, 1928), pp. 326–27.
14. There was a small silver lining. When a studio sells a movie in “turnaround,” it typically sells the script for its cost (plus interest) and retains the rights to five percent of the net profits. In the case of E.T., five percent of the net was probably worth more than all the profits from Starman.
15. See David Scharfstein and Jeremy Stein, “Herd Behavior and Investment,” American Economic Review, June 1990, pp. 465–79.
16. “Cracks in the Crystal Ball,” Financial Times, September 30, 1995, p. 19.
17. Robert H. Gertner and Geoffrey P. Miller, “Settlement Escrows” Journal of Legal Studies, vol.