Nabil Al Najjar

Al-Najjar, Nabil, Sandeep Baliga and Chris Forman. 2004. Steel Wars: A Battle for the Future of American Steel. Case 5-204-256 (KEL002).

This case studies the impact of tariffs, subsidies, and quotas on the U.S. steel market. It pays particular attention to "winners" and "losers" from different policies. The impact of these policies is illustrated via applications to the events in the U.S. steel market in 2001.

Al-Najjar, Nabil, David Besanko and Amit Nag. 2004. California Power Crisis. Case 5-403-759 (KEL004).

Between May, 2000 and January, 2001 the recently deregulated electricity market in the state of California experienced what many commentators have characterized as a meltdown. Over that period wholesale electricity prices increased over 500 percent, power emergencies and the threat of rolling blackouts became daily occurrences, and the state’s largest investor-owned utility was thrust into bankruptcy. This case details California’s attempt to deregulate its wholesale and retail electricity markets and gives students the opportunity to diagnose the causes of California’s crisis. The case contains data that enables students to identify the drivers of increases in the wholesale price of electricity in California.

Al-Najjar, Nabil and Simone Galperti. 2010. Argentina Currency Peg and Fiscal Reforms (A). Case 5-110-004(A) (KEL569).

Case A starts by reviewing several attempts made by three consecutive Argentine governments between 1973 and 1989 to fight the three-digit inflation rates that had troubled the country since the end of World War II. Next, the implementation of the currency peg under the broad umbrella called the “convertibility plan” is discussed and its rationale is explained in connection with the Central Bank’s role in controlling inflation and market expectations. The case then outlines the fiscal reforms introduced in the early 1990s concerning public finance, market regulation, and social security. Finally, the outcomes of these policies are briefly summarized.

Al-Najjar, Nabil and Ali Malik. 2005. U.S. Credit Card Industry. Case 5-205-256 (KEL152).

The case studies the U.S. credit card industry in the late 1990s and early 2000s. After an industry background, a discussion of generic strategies follows in which strategies like product proliferation and cost improvements are achieved through superior IT. These strategies are exemplified using the leading players in the industry. On the other hand, these strategies are easily imitable, the basic product is standardized, and the industry is highly fragmented. What accounts then for the exceptional level of profitability enjoyed by this industry? Learning Objective: The goal is to introduce psychological biases as a force that can shape industry performance. Evidence is provided showing that consumers’ attitude towards credit is prone to “irrational” failure to exercise self-control and inability to fully anticipate future borrowing behavior. A simple model is provided showing that these peculiarities in consumer psychology enable an industry, with otherwise little inherent drivers of superior profitability, to achieve superior performance. Ethical and regulatory issues are then debated.

Al-Najjar, Nabil, Sandeep Baliga and Chris Forman. 2004. Sugar Daddy: Quotas and the U.S. Government. Case 5-204-255 (KEL001).

Since 1981, the U.S. federal government has operated a price support program to help sugar beet and sugar cane producers and processors. This complex program works through a combination of loans, import quotas, and duties. As a result, sugar prices in the United States are significantly higher than world prices. For example, in December 2001, U.S. consumers paid 22.9 cents per pound, while the world price was just 9 cents per pound. The General Accounting Office estimates that the total cost to consumers is $1.9 billion a year. This case uses a simple demand-and-supply framework, using real-world data, to assess the economic and political consequences of the U.S. sugar program. The case provides students with a vivid, fact-based illustration of welfare concepts such as consumer surplus, producer surplus, and dead-weight loss in a concrete, real-world market context.

Al-Najjar, Nabil and Neil Pardasani. 2006. U.S. Automotive Retailing: 1995–2002 (B). Case 5-106-003(B) (KEL201).

Demand in some markets displays a strong taste for variety. This means that the market consists of small niches, each with strong preference for a distinct version of the basic product. Examples include markets with strong local character (local video stores, dry cleaning, etc.), products appealing to specialized tastes (micro-brewed beer, specialty restaurants), and markets for entertainment content. Car retailing falls into this category because demand is fundamentally local in nature. A key strategy in such industry is consolidation. This case studies attempts at consolidating automobile retailing, emphasizing their pitfalls and showing that they were based on overly optimistic assessment of the potential economies of scale and creation of customer value. The learning objectives are to introduce the concept of demand with strong taste for variety, as well as economies of scale and consolidation strategies.

Al-Najjar, Nabil, Ichiro Aoyagi, Guy Goldstein, Ted Korupp, Bin Liu and Suchet Singh. 2006. Boeing and Airbus: Competitive Strategy in the Very Large Aircraft Market. Case 5-404-759 (KEL022).

Boeing and Airbus are contemplating entry into Very Large Aircraft (VLA) market. Both firms are convinced the market cannot support two players due the extremely high R&D costs and the limited (and highly uncertain) state of demand. The key strategic issue is the uncertainty surrounding Boeing’s development cost: To what extent would Boeing’s experience with the 747 help it reduce the R&D cost of a new VLA prototype? The main point of the case is that Boeing’s strategic moves signal its private information, and that this eliminates any first mover advantage Boeing might have had in this market.

Al-Najjar, Nabil and Neil Pardasani. 2006. U.S. Automotive Retailing: 1995–2002 (A). Case 5-106-003(A) (KEL200).

Demand in some markets displays a strong taste for variety. This means that the market consists of small niches, each with strong preference for a distinct version of the basic product. Examples include markets with strong local character (local video stores, dry cleaning, etc.), products appealing to specialized tastes (micro-brewed beer, specialty restaurants), and markets for entertainment content. Car retailing falls into this category because demand is fundamentally local in nature. A key strategy in such industry is consolidation. This case studies attempts at consolidating automobile retailing, emphasizing their pitfalls and showing that they were based on overly optimistic assessment of the potential economies of scale and creation of customer value. The learning objectives are to introduce the concept of demand with strong taste for variety, as well as economies of scale and consolidation strategies.

Al-Najjar, Nabil and David Besanko. 2004. Motorola in the Wireless Handset Market. Case 5-204-261 (KEL023).

Motorola invented mobile telephones and by the end of the 1980s came to dominate the mobile handset market with more than 80 percent market share. A few years later, Motorola faced a key strategic choice of whether to focus its considerable resources on consolidating its dominance of the analogue handset market, or to shift these resources to the emerging digital handset technologies. This decision shaped the handset industry and the role Motorola played in it for the next decade. The case provides a vivid illustration of incumbents’ puzzling inertia towards initiating and participating in disruptive technologies.

Al-Najjar, Nabil, David Besanko and Robert Uchoa. 2004. Credit Solicitations as Market Experiments in the U.S. Credit Card Industry. Case 5-204-252 (KEL005).

The case describes market experiments conducted by a major credit card issuer. In a typical experiment, the issuer sends out hundreds of thousands of solicitations based on information received from credit reporting agencies (e.g. credit score, past delinquencies, etc.). Selection bias is striking: the average risk profile of those responding to higher interest rates is significantly worse than that of respondents to lower rates. Tracking respondents for 27 months after the experiment, respondents to higher rates displayed significantly higher delinquency and bankruptcy rates. This short case is based on an excellent research paper by Larry Ausubel who obtained proprietary data on the condition of not revealing the name of the issuer. Contact Professor Al-Najjar for teaching methods, slides, and classroom exhibits.

Al-Najjar, Nabil and Neil Pardasani. 2006. U.S. Automotive Retailing: 1995–2002 (C). Case 5-106-003(C) (KEL202).

Demand in some markets displays a strong taste for variety. This means that the market consists of small niches, each with strong preference for a distinct version of the basic product. Examples include markets with strong local character (local video stores, dry cleaning, etc.), products appealing to specialized tastes (micro-brewed beer, specialty restaurants), and markets for entertainment content. Car retailing falls into this category because demand is fundamentally local in nature. A key strategy in such industry is consolidation. This case studies attempts at consolidating automobile retailing, emphasizing their pitfalls and showing that they were based on overly optimistic assessment of the potential economies of scale and creation of customer value. The learning objectives are to introduce the concept of demand with strong taste for variety, as well as economies of scale and consolidation strategies.

Al-Najjar, Nabil, Dershan Desai and Steven Hallaway. 2006. Satellite Radio: An Industry Case Study. Case 5-206-255 (KEL203).

Radio broadcasting is characterized by diffused taste for programming and highly fragmented supply of content. Satellite radio is a major technological breakthrough that promises to reshape this industry by, among other things, satisfying a greater diversity in tastes and promoting greater variety in content provision. A major issue is that the economies of scale are such that it is unlikely for more than a few (currently, just two) providers to operate in this market due to the considerable infrastructure and content costs.

Al-Najjar, Nabil, Sandeep Baliga and Chris Forman. 2004. Steel Wars: A Battle for the Future of American Steel. Case 5-204-256 (KEL002).

This case studies the impact of tariffs, subsidies, and quotas on the U.S. steel market. It pays particular attention to "winners" and "losers" from different policies. The impact of these policies is illustrated via applications to the events in the U.S. steel market in 2001.

Al-Najjar, Nabil, David Besanko and Amit Nag. 2004. California Power Crisis. Case 5-403-759 (KEL004).

Between May, 2000 and January, 2001 the recently deregulated electricity market in the state of California experienced what many commentators have characterized as a meltdown. Over that period wholesale electricity prices increased over 500 percent, power emergencies and the threat of rolling blackouts became daily occurrences, and the state’s largest investor-owned utility was thrust into bankruptcy. This case details California’s attempt to deregulate its wholesale and retail electricity markets and gives students the opportunity to diagnose the causes of California’s crisis. The case contains data that enables students to identify the drivers of increases in the wholesale price of electricity in California.

Al-Najjar, Nabil and Simone Galperti. 2010. Argentina Currency Peg and Fiscal Reforms (A). Case 5-110-004(A) (KEL569).

Case A starts by reviewing several attempts made by three consecutive Argentine governments between 1973 and 1989 to fight the three-digit inflation rates that had troubled the country since the end of World War II. Next, the implementation of the currency peg under the broad umbrella called the “convertibility plan” is discussed and its rationale is explained in connection with the Central Bank’s role in controlling inflation and market expectations. The case then outlines the fiscal reforms introduced in the early 1990s concerning public finance, market regulation, and social security. Finally, the outcomes of these policies are briefly summarized.

Al-Najjar, Nabil and Ali Malik. 2005. U.S. Credit Card Industry. Case 5-205-256 (KEL152).

The case studies the U.S. credit card industry in the late 1990s and early 2000s. After an industry background, a discussion of generic strategies follows in which strategies like product proliferation and cost improvements are achieved through superior IT. These strategies are exemplified using the leading players in the industry. On the other hand, these strategies are easily imitable, the basic product is standardized, and the industry is highly fragmented. What accounts then for the exceptional level of profitability enjoyed by this industry? Learning Objective: The goal is to introduce psychological biases as a force that can shape industry performance. Evidence is provided showing that consumers’ attitude towards credit is prone to “irrational” failure to exercise self-control and inability to fully anticipate future borrowing behavior. A simple model is provided showing that these peculiarities in consumer psychology enable an industry, with otherwise little inherent drivers of superior profitability, to achieve superior performance. Ethical and regulatory issues are then debated.

Al-Najjar, Nabil, Sandeep Baliga and Chris Forman. 2004. Sugar Daddy: Quotas and the U.S. Government. Case 5-204-255 (KEL001).

Since 1981, the U.S. federal government has operated a price support program to help sugar beet and sugar cane producers and processors. This complex program works through a combination of loans, import quotas, and duties. As a result, sugar prices in the United States are significantly higher than world prices. For example, in December 2001, U.S. consumers paid 22.9 cents per pound, while the world price was just 9 cents per pound. The General Accounting Office estimates that the total cost to consumers is $1.9 billion a year. This case uses a simple demand-and-supply framework, using real-world data, to assess the economic and political consequences of the U.S. sugar program. The case provides students with a vivid, fact-based illustration of welfare concepts such as consumer surplus, producer surplus, and dead-weight loss in a concrete, real-world market context.

Al-Najjar, Nabil and Neil Pardasani. 2006. U.S. Automotive Retailing: 1995–2002 (B). Case 5-106-003(B) (KEL201).

Demand in some markets displays a strong taste for variety. This means that the market consists of small niches, each with strong preference for a distinct version of the basic product. Examples include markets with strong local character (local video stores, dry cleaning, etc.), products appealing to specialized tastes (micro-brewed beer, specialty restaurants), and markets for entertainment content. Car retailing falls into this category because demand is fundamentally local in nature. A key strategy in such industry is consolidation. This case studies attempts at consolidating automobile retailing, emphasizing their pitfalls and showing that they were based on overly optimistic assessment of the potential economies of scale and creation of customer value. The learning objectives are to introduce the concept of demand with strong taste for variety, as well as economies of scale and consolidation strategies.

Al-Najjar, Nabil, Ichiro Aoyagi, Guy Goldstein, Ted Korupp, Bin Liu and Suchet Singh. 2006. Boeing and Airbus: Competitive Strategy in the Very Large Aircraft Market. Case 5-404-759 (KEL022).

Boeing and Airbus are contemplating entry into Very Large Aircraft (VLA) market. Both firms are convinced the market cannot support two players due the extremely high R&D costs and the limited (and highly uncertain) state of demand. The key strategic issue is the uncertainty surrounding Boeing’s development cost: To what extent would Boeing’s experience with the 747 help it reduce the R&D cost of a new VLA prototype? The main point of the case is that Boeing’s strategic moves signal its private information, and that this eliminates any first mover advantage Boeing might have had in this market.

Al-Najjar, Nabil and Neil Pardasani. 2006. U.S. Automotive Retailing: 1995–2002 (A). Case 5-106-003(A) (KEL200).

Demand in some markets displays a strong taste for variety. This means that the market consists of small niches, each with strong preference for a distinct version of the basic product. Examples include markets with strong local character (local video stores, dry cleaning, etc.), products appealing to specialized tastes (micro-brewed beer, specialty restaurants), and markets for entertainment content. Car retailing falls into this category because demand is fundamentally local in nature. A key strategy in such industry is consolidation. This case studies attempts at consolidating automobile retailing, emphasizing their pitfalls and showing that they were based on overly optimistic assessment of the potential economies of scale and creation of customer value. The learning objectives are to introduce the concept of demand with strong taste for variety, as well as economies of scale and consolidation strategies.

Al-Najjar, Nabil and David Besanko. 2004. Motorola in the Wireless Handset Market. Case 5-204-261 (KEL023).

Motorola invented mobile telephones and by the end of the 1980s came to dominate the mobile handset market with more than 80 percent market share. A few years later, Motorola faced a key strategic choice of whether to focus its considerable resources on consolidating its dominance of the analogue handset market, or to shift these resources to the emerging digital handset technologies. This decision shaped the handset industry and the role Motorola played in it for the next decade. The case provides a vivid illustration of incumbents’ puzzling inertia towards initiating and participating in disruptive technologies.

Al-Najjar, Nabil, David Besanko and Robert Uchoa. 2004. Credit Solicitations as Market Experiments in the U.S. Credit Card Industry. Case 5-204-252 (KEL005).

The case describes market experiments conducted by a major credit card issuer. In a typical experiment, the issuer sends out hundreds of thousands of solicitations based on information received from credit reporting agencies (e.g. credit score, past delinquencies, etc.). Selection bias is striking: the average risk profile of those responding to higher interest rates is significantly worse than that of respondents to lower rates. Tracking respondents for 27 months after the experiment, respondents to higher rates displayed significantly higher delinquency and bankruptcy rates. This short case is based on an excellent research paper by Larry Ausubel who obtained proprietary data on the condition of not revealing the name of the issuer. Contact Professor Al-Najjar for teaching methods, slides, and classroom exhibits.

Al-Najjar, Nabil and Neil Pardasani. 2006. U.S. Automotive Retailing: 1995–2002 (C). Case 5-106-003(C) (KEL202).

Demand in some markets displays a strong taste for variety. This means that the market consists of small niches, each with strong preference for a distinct version of the basic product. Examples include markets with strong local character (local video stores, dry cleaning, etc.), products appealing to specialized tastes (micro-brewed beer, specialty restaurants), and markets for entertainment content. Car retailing falls into this category because demand is fundamentally local in nature. A key strategy in such industry is consolidation. This case studies attempts at consolidating automobile retailing, emphasizing their pitfalls and showing that they were based on overly optimistic assessment of the potential economies of scale and creation of customer value. The learning objectives are to introduce the concept of demand with strong taste for variety, as well as economies of scale and consolidation strategies.

Al-Najjar, Nabil, Dershan Desai and Steven Hallaway. 2006. Satellite Radio: An Industry Case Study. Case 5-206-255 (KEL203).

Radio broadcasting is characterized by diffused taste for programming and highly fragmented supply of content. Satellite radio is a major technological breakthrough that promises to reshape this industry by, among other things, satisfying a greater diversity in tastes and promoting greater variety in content provision. A major issue is that the economies of scale are such that it is unlikely for more than a few (currently, just two) providers to operate in this market due to the considerable infrastructure and content costs.