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

Educators Purchase

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.)

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.

Case | HBS Case Collection | October 2018 (Revised August 2019)

Everybody Knows: Russia and the Election

Rawi Abdelal, Rafael Di Tella and Galit Goldstein

Following a contentious presidential race, Donald Trump’s 2016 election destabilized America’s status quo. Academics, journalists, politicians and the public at large examined why Trump had won. Many Americans, inside and outside the government, asserted that a state-led Russian disinformation campaign had influenced the election’s outcome. The leaders of major social media companies, including Twitter and Facebook, also conceded that state actors had gamed their platforms to influence American politics. Trump himself made conflicting statements, while Russian politicians asserted that American elites had rhetorically weaponized the issue of election interference to justify an unwillingness to work with their country internationally. It was hard to parse where reality ended and political rhetoric began. Post-election, the future of U.S.-Russia relations remained unclear, and the United States grappled with how to regulate cyberspace. Analyzing the 2016 election and its aftershocks helps students confront interrelated questions about business regulation, international relations, cultural identity, strategic communications, political will and the Internet. The case encourages students to consider the boundary between narrative and reality, and examine subjectivity, objectivity and power in the public and private sectors.

Keywords: Strategic industry; strategic alliances (business); Business and Government; business and public policy; business and society; Media Businesses; media content; media slant; media regulation; social media; internet of everything; government policy; politics; political campaigns; political strategy; political turmoil; government; Government Regulation; Security; international business; International Relations; National Security; Political Elections; News; Media; Internet; Rights; Problems and Challenges; Globalization; Business and Community Relations; Business and Government Relations; Government Legislation; Risk and Uncertainty; Cognition and Thinking; Conflict and Resolution; Identity; Civil Society or Community; Culture; Public Opinion; Social Issues; War; Online Technology; Public Administration Industry; United States; Russia;

Citation:

Abdelal, Rawi, Rafael Di Tella, and Galit Goldstein. "Everybody Knows: Russia and the Election." Harvard Business School Case 719-012, October 2018. (Revised August 2019.) View Details

Cite View Details Educators Purchase

Faculty & Research

Enel: Power, Russia, and Global Markets

Abstract

Citation:

About the Authors

More from these Authors