Enel: Power, Russia, and Global Markets

Rawi E. Abdelal; Richard H.K. Vietor; Sogomon  Tarontsi

Case | HBS Case Collection | May 2009 (Revised January 2011)

Enel: Power, Russia, and Global Markets

by Rawi E. Abdelal, Richard H.K. Vietor and Sogomon Tarontsi

Abstract

Although the global trend toward liberalization of electric utilities forced Enel, the largest power company in Italy, to give up some of its assets in its home base, it also opened up many opportunities abroad, including in Russia, one of the largest electricity markets in the world. The case outlines Enel's internationalization strategy and then focuses on one piece of the company's strategic puzzle of global expansion: acquisition of major power-generation assets in the course of the break-up of RAO UES, the Russian electricity monopoly. The case highlights the decision-making process by the company executives in the context of possible political risks to foreign investment in Russian strategic industries and economic risks to investment in the yet-to-be-formed liberalized and deregulated electricity market in Russia.

Keywords: Mergers and Acquisitions; Energy Generation; Foreign Direct Investment; Global Strategy; Globalized Firms and Management; Globalized Markets and Industries; Business and Government Relations; Utilities Industry; Russia; Italy;

Format: Print

35 pages

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Citation:

Abdelal, Rawi E., Richard H.K. Vietor, and Sogomon Tarontsi. "Enel: Power, Russia, and Global Markets." Harvard Business School Case 709-046, May 2009. (Revised January 2011.)

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Article | Marketing Science | Forthcoming

Price Bargaining and Competition in Online Platforms: An Empirical Analysis of the Daily Deal Market

Lingling Zhang and Doug J. Chung

The prevalence of online platforms opens new doors to traditional businesses for customer reach and revenue growth. This research investigates platform choice in a setting where prices are determined by negotiations between platforms and businesses. We compile a unique and comprehensive dataset from the U.S. daily deal market, where merchants offer deals to generate revenues and attract new customers. We specify and estimate a two-stage supply-side model in which platforms and merchants bargain on the wholesale price of deals. Based on Nash bargaining solutions, our model generates insights into how bargaining and competition jointly determine the price and firm profits. Our results show that there is systematic variation in bargaining power between platforms and merchants with different characteristics. By working with a bigger platform, merchants enjoy a larger customer base, but they are subject to lower margins due to less bargaining power during negotiations. Our counterfactual results quantify the value of platforms for merchants and show that merchants with lower bargaining power benefit more by working with a smaller platform. Regarding the impact of price negotiations on platform competition, we estimate that roughly 11% of the deals on a smaller platform are attributable to the platform’s lower level of revenue sharing.

Keywords: business-to-business marketing; platform competition; Two-Sided Markets; price bargaining; daily deals; structural model; Two-Sided Platforms; Competition; Price; Negotiation;

Citation:

Zhang, Lingling, and Doug J. Chung. "Price Bargaining and Competition in Online Platforms: An Empirical Analysis of the Daily Deal Market." Marketing Science (forthcoming). View Details

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Enel: Power, Russia, and Global Markets

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