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The McKinsey Quarterly Newsletter: December 2001 =09 If you would prefer to view this newsletter as a Web page, point your Web= browser to: http://www.mckinseyquarterly.com/newsletters/2001_12.htm [IM= AGE] Greetings from The McKinsey Quarterly! Why can two nearly identical = cars, with only minor differences in components and trim, end up with drama= tically different fates in the marketplace? The Toyota Corolla and the Chev= rolet Prizm are essentially twins, built side by side at the same plant in = California. But General Motors sells only one Prizm for every three Corolla= s sold by Toyota, though GM lays out nearly $750 more per car in buyer ince= ntives. This curious case shows how the Big Three automakers have fallen i= nto the classic trap of commoditizing industries. Carmakers underemphasize = the emotional relationships buyers have with their cars and the brand attac= hments forged thereby. As cars become more alike, price too often becomes t= he reason for choosing one nameplate over another. The remedy? Detroit mus= t quit squandering its marketing budgets on rebates and incentives and focu= s instead on all elements of brand affiliation. Steer your cursor toward "R= evving up auto branding " to read the new rules of the road. See you at th= e site! Lang Davison Editor, mckinseyquarterly.com [IMAGE] This month at= mckinseyquarterly.com Facing disconnection: Hard choices for Europe's te= lcos Can it be only two years since the fate of the Continent's telecom c= ompanies seemed to rest on how quickly they could enter new markets and buy= up expensive assets? Survival may now depend on the unpalatable task of sh= edding assets and stepping away from areas that telcos once regarded as cen= tral to their business. Chips off a new block The semiconductor industry= is already reeling from the technology slowdown, yet a new generation of p= lastic-based chips could soon make things worse. Although these ICs current= ly underperform silicon, as the gap narrows they may well take market share= from commodity chips produced by the likes of Hitachi, Rohm, and Toshiba. = The case for on-line communities Remember virtual communities-the busine= ss model that was supposed to make World Wide Web-based companies profitabl= e? Just another overhyped myth from the days of bubbledom, right? Not so fa= st: research from McKinsey and Jupiter Media Metrix shows that community fe= atures create substantial value for both content and retail sites. Portal= s for all platforms Nobody wants to own a narrowband portal these days. B= ut the future looks rosy for broadband portals, to judge by the many compan= ies jumping into that space. This piece sorts out the competitors and sugge= sts that they focus on their "native" broadband platforms-PCs, TVs, or mobi= le devices-while preparing for the multiplatform future. Power by the minu= te Can the electricity industry be deregulated without the threat of a Ca= lifornia-style meltdown? A nifty technique called "dynamic pricing" may pro= vide the answer-though it requires huge upfront expenditures to retrofit or= replace household meters. [IMAGE] New! The McKinsey Quarterly Reader T= his month we are pleased to announce the debut of The McKinsey Quarterly Re= ader, featuring selected articles from our archive. They are grouped togeth= er by theme and presented in convenient PDF format. The articles in our fi= rst Reader, "Strategy in an uncertain world ," present tools and techniques= that managers can use to reduce the risks involved in making strategic dec= isions. Note: Adobe Acrobat version 3.0 or higher is required. The large f= ile size (740K) may require a lengthy download time for users without a bro= adband connection to the Internet. [IMAGE] Share the wealth! If you know = colleagues who would be interested in The McKinsey Quarterly, please forwar= d this e-mail message to them . [IMAGE] You are receiving this monthly new= sletter because you are a registered member of mckinseyquarterly.com , the = on-line business and economics journal published by McKinsey & Company, and= have requested this information be sent to you. Visit your member profile= to change your subscription preferences. There, you may unsubscribe from = this newsletter, subscribe to other McKinsey Quarterly e-mail services, cha= nge your e-mail address, and make other revisions to your member account. = To unsubscribe from all McKinsey Quarterly mailing lists, click here to e-= mail us your request. YOU WILL RECEIVE NO FURTHER E-MAIL from The McKinsey = Quarterly if you take this action. PLEASE DO NOT REPLY TO THIS MESSAGE. A= ddress questions or comments to: quarterly_info@mckinsey.com =09 [IMAGE]
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