Incumbent Responses to an Entrant with a New Business Model: Resource Co-Deployment and Resource Re-Deployment Strategies

The constructs of re-deployment and co-deployment have been central to discussions of scope economies in diversified firms. We argue however that these constructs are also significant in the context of single business firms. Increasingly, changes in technology and demand preferences have provided opportunities for entrants to attack incumbents with a different business model, one that may neutralize the incumbent’s advantage for at least some set of customers (e.g. Netflix versus Blockbuster). In such a context incumbents often respond by modifying their business model. We note that several of the business model-altering responses of the incumbent can be characterized in terms of co-deployment and re-deployment benefits and costs, where co-deployment benefits/cost apply to the scope economies/diseconomies in running multiple business-models within the same firm and re-deployment benefits/costs apply to the implications of moving assets from one business model to another. We then examine the set of strategic choices faced by the incumbent in competing with an entrant with a different business model. We identify five set of factors that are likely to influence the decision to choose between these alternatives – uncertainty spawned by the new business model, market segment targeted by the new model, the within-business-across-business-model co-deployment and re-deployment benefits and costs, the across-business co-deployment and re-deployment benefits and costs, and the incumbent’s prior performance history. Although some of these choices have seen some work, most remain relatively underexplored in the strategy literature. We highlight the potential for research in this area with a set of propositions that identify key conditions that should hold true for a particular strategic choice to be picked by an incumbent

Extensive rewiring of the EGFR network in colorectal cancer cells expressing transforming levels of KRASG13D

Protein-protein-interaction networks (PPINs) organize fundamental biological processes, but how oncogenic mutations impact these interactions and their functions at a network-level scale is poorly understood. Here, we analyze how a common oncogenic KRAS mutation (KRASG13D) affects PPIN structure and function of the Epidermal Growth Factor Receptor (EGFR) network in colorectal cancer (CRC) cells. Mapping >6000 PPIs shows that this network is extensively rewired in cells expressing transforming levels of KRASG13D (mtKRAS). The factors driving PPIN rewiring are multifactorial including changes in protein expression and phosphorylation. Mathematical modelling also suggests that the binding dynamics of low and high affinity KRAS interactors contribute to rewiring. PPIN rewiring substantially alters the composition of protein complexes, signal flow, transcriptional regulation, and cellular phenotype. These changes are validated by targeted and global experimental analysis. Importantly, genetic alterations in the most extensively rewired PPIN nodes occur frequently in CRC and are prognostic of poor patient outcomes.This work was supported by European Union FP7 Grant No. 278568 “PRIMES” and Science Foundation Ireland Investigator Program Grant 14/IA/2395 to W.K. B.K. is supported by SmartNanoTox (Grant no. 686098), NanoCommons (Grant no. 731032), O.R. by MSCA-IF-2016 SAMNets (Grant no. 750688). D.M. is supported by Science Foundation Ireland Career Development award 15-CDA-3495. I.J. is supported by the Canada Research Chair Program (CRC #225404), Krembil Foundation, Ontario Research Fund (GL2-01-030 and #34876), Natural Sciences Research Council (NSERC #203475), Canada Foundation for Innovation (CFI #225404, #30865), and IBM. O.S. is supported by ERC investigator Award ColonCan 311301 and CRUK. I.S. is supported by the Canadian Cancer Society Research Institute (#703889), Genome Canada via Ontario Genomics (#9427 & #9428), Ontario Research fund (ORF/ DIG-501411 & RE08-009), Consortium Québécois sur la Découverte du Médicament (CQDM Quantum Leap) & Brain Canada (Quantum Leap), and CQDM Explore and OCE (#23929). T.C. was supported by a Teagasc Walsh Fellowshi

Boards, Ownership Structure and Involuntary Delisting from the New York Stock Exchange

This study examines whether the likelihood of becoming involuntarily delisted from NYSE is associated with a firm’s board of directors and ownership characteristics. To this end we compare 161 firms that were delisted from NYSE between 1998 and 2004 to a set of industry and size-matched control firms. Consistent with our expectations, we find that the likelihood of delisting is related to a firm’s governance characteristics. Our results on the importance of the board of directors are new to this setting and add to a large body of evidence linking corporate boards and ownership characteristics to corporate performanc

Cross Listing, Bonding Hypothesis and Corporate Governance

This paper examines the relationship between cross-listing and corporate governance for Canadian firms, that were cross-listed on US stock exchanges during the period 1997–2003. We find that cross-listed firms have more independent boards and audit committees after the listing relative to a non-cross-listed matched sample of firms and relative to the pre-listing period. Moreover, cross-listed firms experience changes in their ownership structure after the listing. Finally, we provide evidence that the sensitivity of the relation between cross-listed firm valuation with audit committee independence and ownership structure becomes more important after the listing. The results are robust after adjusting for various firm risk characteristics. Overall, the results are consistent with the literature on the bonding role of cross-listings on US stock exchanges

The determinants and valuation effects of classification choice on the statement of cash flows

In this paper we exploit the choice allowed by IFRS regarding the presentation of interest payments on the cash flow statement to answer two related questions: First, whether the classification choice is explained by firm reporting incentives and second, whether it is value relevant. Using a UK sample, we find that firms reporting losses, with a greater proportion of their debt stemming from public sources, with CFO-based covenants and greater increases in leverage in the year of adoption are less likely to report interest payments in cash flows from operating activities (CFOA). Results also suggest that the incentive to meet or beat analyst CFO forecasts decreases, but strong corporate governance increases the probability of including interest payments in CFOA. Based on the assumption that the decision not to classify interest payments in CFOA captures lower disclosure quality or poor future expected performance, we posit that these firms should also exhibit lower valuations. Results obtained after correcting for self-selection bias confirm this assertion. We conclude that managers’ decision not to classify interest payments in CFOA is consistent with the opportunistic use of the choice allowed by IFRS

Comparison of sport achievement orientation of male professional, amateur, and wheelchair basketball athletes

To examine the differences in sport achievement orientation among 35 professional, 36 amateur, and 35 wheelchair basketball athletes, these men completed three subscales of Competitiveness, Win orientation, and Goal orientation of the 25-item Sport Orientation Questionnaire. A multivariate analysis of variance indicated significant differences among groups. Win orientation was the factor, through discriminant function analysis, that significantly separated the athletes into the three groups. The highest win score was obtained by the professional, followed by the amateur and wheelchair groups. Replication study is necessary to confirm the present findings