Can IKEA and Instant Pot Teach Us About Competition? MIT Sloan Thinks So
People purchase IKEA furniture because it’s easy to put together. They don’t want to have to buy a drill; they want holes and pieces that easily fit together like Legos. In fact, according to Harvard professor Theodore Levitt, when someone buys a drill, what they want is what the drill can do.
That’s just one reason why MIT Sloan professor Sanjay Sarma believes that IKEA is on the cutting edge of business. While other companies are trying to sell solutions to outdated problems, IKEA has figured out how to solve a core problem.
“That’s what I call inversion,” Sarma says. “You’ve got to wrap yourself around the need and think outwards, rather than limit yourself to your product.”
So, what can IKEA and other companies teach about competition? Sarma provides insight from three recognizable brands who are mastering the art of inversion, and one that failed.
Amazon
When Amazon first got its start, they only sold books. Then, in 2007 when they came out with the Kindle e-reader, they had to compete with both Apple and Google rolling out similar products. But Amazon stayed ahead of the competition by creating a Kindle reading app that could be used on any device. They also unveiled products such as Audible (for audiobooks and podcasts) and the Amazon Echo smart speaker.
They identified the need bigger than books—reading—and fulfilled it.
Instant Pot
In 2009, Robert Wang created the Instant Pot, a do-everything cooking appliance that connected to Bluetooth. It changed the cooking experience, allowing users to remotely monitor their cooking and do everything from slow cook to pressure cook to steam and bake. “It’s stunning,” Sarma says.
The increasingly popular Instant Pot is a relatively new product, created in 2009 by Robert Wang.
Nestlé
Unfortunately for Nestlé, they missed the mark with their smartphone-connected espresso machine. They had an idea that people were in the business of coffee, but instead, it’s actually about the morning experience and taking a few minutes to prepare for the day. They missed the point because they missed what people were after.
Ford Motor Company
Ford tried the inverted approach in 2016 with the purchase of Chariot, a van shuttle service. The idea was to compete with rideshare companies. And while it didn’t work out, it still was a smart move because it indicated that Ford recognized that a need for transportation outweighed the need for a car. Now, Ford has announced the purchase of Spin, a scooter company that uses cell phones to locate available rides—and it shows that they are learning.
You can read the full MIT Sloan story here.
This article has been edited and republished with permissions from its original source, Clear Admit.
Wharton Takes Over Top Spot on New U.S. News MBA Ranking
Harvard loses its crown, Wharton ranks first, and Purdue stumbles in new U.S. News & World Report “Best Business Schools” ranking.
The annual U.S. News & World Report Best Business Schools ranking, largely regarded as the most prominent MBA ranking system in the United States, debuted its newest annual listing, with The University of Pennsylvania’s Wharton School taking the top mantle.
The Philadelphia metro business school ascends past Harvard Business School and the University of Chicago Booth School of Business—both tying for first last year. Both schools took a minor tumble to the third overall spot, sitting in a three-way tie with the MIT Sloan School of Management. Stanford’s Graduate School of Business lept into the second overall spot, which comes just a few months after the Silicon Valley school maintained its status as the best in the world according to the Financial Times.
U.S. News & World Report Top 10 Business Schools
| School | This Year's Ranking | Last Year's Ranking |
|---|---|---|
| Wharton (University of Pennsylvania) | 1 | 3 |
| Stanford Graduate School of Business | 2 | 4 |
| Harvard Business School | 3 (tie) | 1 (tie) |
| Booth (University of Chicago) | 3 (tie) | 1 (tie) |
| Sloan (Massachusetts Institute of Technology) | 3 (tie) | 5 |
| Columbia Business School | 6 (tie) | 9 |
| Kellogg (Northwestern University) | 6 (tie) | 6 |
| Haas (UC Berkeley) | 6 (tie) | 7 (tie) |
| Yale School of Management | 9 | 11 (tie) |
| Fuqua (Duke University) | 10 | 11 (tie) |
Within the top 50 business schools, this year’s ranking largely resembles last year’s. In fact, only three business schools—the University of Pittsburgh Joseph M. Katz Graduate School of Business, the Iowa State University Ivy College of Business, and the The Manderson Graduate School of Business at the University of Alabama—moved into the top 50 since last year. The three business schools to fall out of the top 50 were Rutgers Business School, the Haslam College of Business at The University of Tennessee, Knoxville, and the University of Utah David Eccles School of Business. All three moved down the ranking by at least 10 spots each.
U.S. News Ranking Rising Business Schools
No school saw a better year-end turnaround than the aforementioned Iowa State University Ivy College of Business. The Midwest business school moves from the 79th spot last year to 47th this year; a 32-spot increase. On the news of the new ranking, Dean David Spalding says in a press release, “This significant rise in the ranking is a direct result of the quality work our faculty do every day in the classroom. At a time when some universities are dropping their full-time MBA programs, the Ivy MBA continues to excel. Our internationally known faculty provide a top-notch MBA experience that helps our MBA graduates advance their careers to the next level.”
Iowa State University’s Ivy College of Business earns the biggest ranking bump from U.S. News this year, moving up 32 spots from last year.
Ten schools in the top 100 saw double-digit rankings jumps, with Iowa State accruing the greatest increase. The University of Kentucky Gatton College of Business and Economics, the Oklahoma State University Spears School of Business, and the Babson College F.W. Olin Graduate School of Business all saw a rise of at least 20 spots this year as well.
Purdue, Case Western Stumble
On the opposite end of this year’s ranking is Purdue University’s Krannert School of Management, falling a total of 21 spots from 53rd last year to 74th this year. The University of Kansas School of Business and the Saunders College of Business at RIT join Krannert as this year’s three biggest falling schools, each dropping at least 20 spots respectively. Like most of the annual U.S. News rankings, the placement fluctuation is much more apparent the further and further down the list you go, with schools in the top 50 largely remaining stable.
U.S. News 2020 Ranking Methodology
To formulate its ranking, U.S. News & World Report analyzed “475 MBA programs accredited by the Association to Advance Collegiate Schools of Business International.” A total of 367 schools responded to its surveys, but only 131 schools made the final ranking “because they provided enough of the required data on their full-time MBA program that were needed to calculate the full-time MBA rankings, based on a weighted average of the indicators.” Those indicators, with the weighted values, are as follows:
Quality Assessment (0.40)
• Peer assessment score (0.25)
• Recruiter assessment score (0.15)
Placement Success (0.35)
• Mean starting salary and bonus (0.14)
• Employment rates for full-time MBA program graduates
Student Selectivity (0.25)
• Mean GMAT and GRE scores (0.1625)
• Mean undergraduate GPA (0.075)
• Acceptance rate (0.0125)
Did The Methodology Changes Affect This Year’s U.S. News Ranking?
Last September, calls for changes in the MBA ranking methodology seemed to be answered by several large publications, including U.S. News. The company’s Chief Data Strategist, Robert Morse, noted, “There is an active and ongoing debate about how to best measure quality in education, and we pay close attention to that debate. Over time, our ranking model has put more emphasis on outcomes measures … As part of this evolving process, we’ve wanted to measure whether schools were successful at serving all of their students, regardless of economic status.”
The overarching issue seemed to lie within a framework that continually rewarded students and business schools that actively enrolled more and more students from affluent families. In response, U.S. News decreased its ranking value of acceptance rates, which previously rewarded schools that were more selective. Now, as seen above, the weighted value of acceptance rates is less than 1 percent.
However, the changes in the formula did not seem to bare much tenable change in the outcomes. The top 50 schools were largely unchanged, with only minor variances. Several schools, such as Iowa State and Oklahoma State were handsomely rewarded in the new ranking, moving up at least 20 spots each. However, schools rising and falling by 10, 20, even 30 spots in a given year isn’t a new occurrence. In fact, last year, nine schools in the top 100 rose at least 10 rankings from the previous year.
Stay tuned to MetroMBA for more information and analysis of this year’s MBA rankings.
Top Deferred Enrollment MBA Programs Geared Toward Younger Candidates
Most of the time, full-time MBA programs require work experience and, overall, class averages of professional experience are close to five years. Rarely are programs open to younger candidates who are still pursuing their undergraduate degrees. However, that all changes when it comes to deferred enrollment programs.
These programs guarantee senior undergraduate students a spot at some of the top MBA programs in the world, two to five years after they graduate. This means that you graduate with a plan for the future and the time to figure out the details.
Recently, MIT Sloan announced a new deferred enrollment program, joining the ranks of other top b-schools including Chicago Booth, Columbia Business School, Harvard Business School, Stanford GSB, UVA Darden, The Wharton School, and Yale School of Management. Each of these programs is set up similarly and vies for top talent at undergraduate schools around the world.
How Deferred Enrollment Programs Work
“This type of program is for those who know that an MBA program is something they want to pursue, in the future. Not directly after their undergraduate degree (in most cases), but a couple of years later,” explains Alex Brown, an MBA admissions expert at Clear Admit.
Ambitious undergraduate students apply to b-school during their senior year and then receive a promise of a seat in a future cohort. Typically, students gain two to five years of work experience between acceptance and starting the MBA. Then, after their deferral, they join the same MBA cohort as the traditional full-time MBA.
“By applying and gaining admission, it helps reduce the uncertainty of their plan, going forward. So rather than entering an analyst program at a consulting firm, for example, with the hope of gaining admissions to a top MBA program after a few years, they can enter the analyst program knowing they have an MBA option already,” Brown says. “Of course, it doesn’t stop them from changing their mind, or pursuing other MBA options, and forgoing the early admission.”
These deferred enrollment programs are ideal for future leaders. Typically candidates have outstanding internships, strong academic credentials, and high test scores when they apply. “Also, these candidates are still typically early in their career arch when they do attend their MBA program. But, it makes sense if they are focused and really understand how the MBA program will help develop their career further,” explains Brown. “It’s good for candidates with focused career goals.”
Additionally, it’s important to note that deferred admissions MBA programs are designed to attract different types of students. They want candidates who might not typically have business school on their radar, but come from a STEM or humanities background. The key for applicants is to have a solid plan for the future and knowledge of how the MBA fits into that plan.
So, what are some of the top deferred enrollment programs and how are they unique?
Deferred Enrollment at a Glance
At a glance, most of the top b-schools offer very similar MBA programs geared toward younger candidates. All but Yale SOM are two years in length and place students in the same cohort as the full-time MBA. On the other hand, the Yale Silver Scholars program is three years in length with the first and third year being the same as the standard MBA and the second year in an extended internship. The reason behind this difference is that the program accepts candidates directly after their undergraduate career without any work experience.
The Yale Silver Scholars is one of the many MBA deferment programs offered at some of the best business schools in the world.
The rest of the programs encourage students to take two to five years off to gain work experience before they start their MBA. However, in some cases, work experience is not necessary if acceptance is during their final year (fifth year) of graduate school, such as is the case for Stanford’s deferral program.
“Generally, the students co-exist in the same program,” explains Brown. “Younger students might have more energy and enthusiasm, older candidates might have more experience and insights. It can become a great blend for an academic experience.”
Other stand-out differences include the fact that the Wharton Moelis program is only for University of Pennsylvania students. Sloan allows MIT students with an undergraduate GPA of 4.25 to avoid the GMAT, and Darden and Wharton both include scholarships for their deferred programs.
Finally, you can expect to apply to each of these programs in April, around the Round Three MBA application deadline, though Darden uniquely offers three application deadlines.
Inside the Top B-Schools with MBAs Geared Toward Younger Candidates
The differences between the programs lie in the characteristics and incentives offered by each. Here’s a deeper look at some of the top offers, who can apply, and how it works.
• Chicago Booth Scholars Program
The Chicago Booth Scholars program is for candidates with three or fewer years of full-time post-undergraduate work experience. It’s open to undergraduates from any institution in their senior year, granting applicants a two to four-year deferment before starting the MBA program. While working full time, students have the opportunity to engage with Booth, explore the community, travel, and whatever else is of interest. Applications are due in April and are similar to the full-time MBA application.
• Columbia Business School Deferred Enrollment Program
The Columbia Business School Deferred Enrollment program is open to undergraduate and graduate students who apply during their final year of schooling. Once accepted, you can take two to five years to enter the workforce and start the full-time MBA program when it’s right for you. Applications are similar to the full-time MBA program with slightly different short answer questions and are due in April. Once you decide to matriculate, you join the full-time MBA program.
• Harvard Business School 2+2 Program
Harvard’s 2+2 program is the best-known deferred MBA of its kind. Candidates apply in their final year of undergraduate or graduate school, then spend a minimum of two years (maximum of four) working full-time before they begin their full-time, two-year MBA program. This program is specifically for students working in the public, private, or nonprofit sector with an emphasis on STEM and humanities disciplines. The application is essentially the same online application for the MBA program; the application fee is simply lower. The admissions deadline is in April. Candidates enter the full-time MBA program once they have met work experience requirements.
• MIT Sloan MBA Early Admission
The MIT Sloan MBA Early Admission program is open to any exceptional undergraduate student. However, MIT students can avoid the GMAT with a GPA above 4.25. You can apply your senior year or directly after graduation in either your undergraduate or graduate academic career. Applications are due in April, and between acceptance and starting the program, candidates may seek two to five years of full-time work experience. Once matriculating, students enter the same MBA full-time program.
• Stanford GSB Deferred Enrollment
The Stanford GSB Deferred Enrollment program is open to undergraduate students who want to begin their MBA immediately after their senior year. However, students can defer for one to three years to gain work experience. You can apply during any of GSB’s three application rounds and can choose which year’s MBA program you’d like to enter. If you decide to defer for one to two years, you can apply for specific fellowships the year before starting your full-time MBA.
• UVA Darden FYSP
The UVA Darden FYSP program is open to undergraduate students in their final year and fifth-year master’s students. Candidates can apply in March, May, and August, and once admitted begin their professional journey. They ear two to four years of work experience and gain access to the Darden alumni community for mentorship, networking, and individualized career support. Then, once ready, candidates join the regular full-time MBA program with a guaranteed scholarship in hand.
• Wharton Moelis Advance Access Program
The Wharton Moelis program is a feeder program only for University of Pennsylvania undergrads. Students accepted into the program receive special professional development, career services, and access to the Wharton community such as annual retreats, mentoring, and a potential $10,000 a year fellowship. You apply senior year during Round 3 MBA admissions, and with evaluation similar to the overall MBA pool. You defer for two to four years of work experience and then join the regular two-year, full-time MBA program when you’re ready.
• Yale SOM Silver Scholars
The Yale Silver Scholars program was initially created just for Yale undergrads, but now recruits from an international talent pool. The difference with this program is that students start their MBA immediately after college graduation. You spend one year taking core curriculum before your full-time extended internship in year two. Then, your third year, you return to Yale SOM to complete your degree. Students integrate into the Yale SOM MBA, but have special programming and career development tailored to them. Candidates apply their senior year and fill out the same full-time MBA application.
This article has been edited and republished with permissions from its original source, Clear Admit.
MIT’s New Free Online Sloan Course, and More – Boston News
Let’s explore the most interesting stories to emerge from Boston business schools this week.
Free Online MIT Sloan Course Explores the Future of Work – MIT Sloan Ideas That Matter
Automation, globalization, and new technologies can drastically change the future of the working world. In response to the growing sense of uncertainty about work’s future, a free online course created by a group of MIT Sloan experts explores how we can exert influence over the shape and form our future work will take.
Entitled “Shaping Work of the Future,” the course will focus on how technology is disrupting work and how we can adapt technology to augment rather than replace human work.
Professor of Work and Organization Studies at Sloan, Thomas Kochan asserts, “There’s no iron law of technology and no iron law of globalization. We can influence how these things play out and manage them better. But we’ve got to understand what the choices are, and we’ve got to get people really energized and taking actions to shape these forces.”
The course is open to the public and was designed to accommodate the global scope of the topic. Kochan adds:
“We need to get a message out to people around the world, young workers, but even more to experienced workers and leaders of business and government, that we can influence the future of work. We don’t see enough people understanding that they really can have an influence over these issues and have an impact.”
You can read more from the recent article here.
HBS Research Addresses Innovation Problem in Frontier Markets – Harvard Business Review
New Harvard Business School research on emerging markets reveals how market-creating innovation not only generates growth for companies but also galvanizes infrastructure, cultivates institutions, and mitigates corruption.
Contrary to popular opinion hat a society must “fix” its structures and institutions in order to foster innovation, authors Clayton M. Christensen, Efosa Ojomo, and Karen Dillon present the argument that innovation is the process by which a society develops. Thus when a country encounters roadblocks to prosperity despite activity within its borders, the country may not have a development problem—they might have an innovation problem.
“Market-creating innovations don’t wait for such obstacles to be removed by resources that are pushed in. They essentially pull in the necessary resources—creating workarounds or funding the infrastructure and institutions needed to deliver their products—even if those efforts are not initially supported by the local government.”
MicroEnsure’s Richard Leftley remarks on the power of innovation, “It’s difficult to run a ruler over things you can’t see. But when you strip away the layers of conventional thinking about what’s not possible and start to re-imagine what is, you can begin to create something really powerful. And that, in turn, has the potential to change the world.”
Check out the rest of the HBR article here.
BC Alum Takes Home Cox Conserves Heroes Award – Carroll School of Management News
BC Carroll alum Shavel’le Olivier, ’14, is the new co-chair of the Mattapan Food and Fitness Coalition’s Vigorous Youth program. In her role, Olivier coordinates volunteers, research, writing grants, planning events, and handles administration. This past fall, Olivier was awarded the Cox Conserves Heroes Award, presented by Boston 25 News in partnership with Cox Enterprises and the Trust for Public Land. The award recognizes a local environmental volunteer for work improving outdoor spaces. Along with the honor, Olivier received $10,000 to donate to MFFC.
Olivier credits her Boston College experience with boosting her leadership skills in unexpected ways.
“Those classes gave me a foundation that helped me explore how I am a leader—and that leaders are not [shaped by] cookie cutters, with shared characteristics, like being outgoing or able to talk a lot. You can be a leader by focusing on your strengths.”
Olivier also credits mentors such as Vivien Morris, the founder and co-chair of MFFC and community engagement manager for the Carroll School’s Joseph E. Corcoran Center for Real Estate and Urban Action. “These women in different leadership positions were inspirational to me. They encouraged me and made me more comfortable taking on more leadership roles.”
You can find out more about Olivier’s work here.
The Future Time Slack Phenomenon, and More – Boston News
Let’s review the most interesting stories to emerge from Boston business schools this week, including a Harvard professor’s explanation of what exactly “future time slack” is and why you may be dealing with it on a regular basis.
Time For Happiness: Why the Pursuit of Money Isn’t Bringing You Joy—And What Will – Harvard Business Review
New research shows that even if an employee receives a promotion or raise they covet, they may feel just as discontented. Regardless of the outcome of our efforts, we all feel increasingly strapped for time, and often the things that we believe will make us happy—and that we work so hard for—don’t.
Evidence shows that “time affluence” i.e. the feeling of having enough time is at a record low in the United States. Ironically, despite the perception that people today work longer and harder, data shows that most of us have more discretionary hours than ever before. Yet we still feel starved for time.
Harvard Business School Assistant Professor Ashley Whillans writes, “In a study of nearly 40,000 Americans, when people made time-saving purchases on Saturday or Sunday (versus those who did not), they spent about 30 minutes more socializing with friends and family. That in turn promoted greater end-of-day happiness. The people who made those purchases were happier not only because they socialized more but because they derived greater joy from doing it.”
Whillans notes the behavioral factors that affect our decisions to choose money or time. “We suffer from something called future time slack—the belief that we’ll have more time in the future than we do in the present. So, we decide to make some sacrifices now with the promise of enjoying more time later. Of course, when the future comes, we don’t have more time. We just repeat the same mistake.”
You can read more about Whillans’ research here.
Expert Witnesses: Accounting and MBA Students Testify in Court – Sawyer Business School
In the Suffolk Law School Moot Courtroom, lawyers deposed Accounting and MBA students in a simulated embezzlement case. This marked the culmination of a semester of students interviewing a plaintiff and a defendant, gathering evidence, writing memos and reports and crunching numbers to determine how much money had been stolen from a fictional company.
As one student after another took the witness stand, the plaintiff’s attorney, Accounting Professor Martino Coviello, BSBA ’97, MSCJ ’04, and the defense attorney, Walter Nelepa, JD ’12, put them through lines of questioning.
Professor Coviello described the reasoning behind this simulation:
“A forensic accountant needs to keep a mindset that everything he or she does will, at some point, be scrutinized in a courtroom. So students need to understand not only courtroom procedures, but also withstand the scrutiny of a defense attorney. It never really clicks until you’re actually in a courtroom.”
Coviello notes how the courtroom simulation has a recognizable impact on the students abilities to recall and stand by their investigation. “You might have missed a date on a memo or you might have misplaced your notes, and that doesn’t seem like a problem until you’re in a courtroom and a defense attorney makes a big deal out of it.”
“He’s trying to instill doubt in the minds of the jurors by asserting that if you made a mistake on that stuff, then you must have made a mistake elsewhere in your investigation,” Coviello says.
You can read more from the article here.
Why AirAsia Boosts Marketing During a Crisis – MIT Sloan Ideas That Matter
Tony Fernandes, CEO of AirAsia recently spoke at MIT Sloan to share lessons learned about finding opportunity in adversity and building a culture around people.
Fernandes purchased AirAsia back in 2001 when the airline was $11 million in debt, turning it around to become the world’s best low-cost airline. AirAsia has weathered a range of disasters since Fernandes took charge, from 9/11 to the severe acute respiratory syndrome (SARS) outbreak, bird flu, high oil prices, and a currency crisis. Instead of panicking, Fernandes pays a visit to his advertising department. In fact, during the SARS outbreak, Fernandes tripled AirAsia’s advertising.
Tony Fernandes, CEO of AirAsia, bucked traditional trends, increasing spending during times of financial crisis, often to the company benefit.
Fernandes remarked, “Most companies cut marketing during a crisis, which is actually a huge mistake. Adversity is a great time to build a business.”
Fernandes adds that it’s important to remember that it’s always people who are the key to a company’s success, and that he is working to create a culture that reflects that.
“I probably spend 50 percent of my time walking around the office, because I think management by walking around is critical. Never lose sight that your biggest asset is the people in your organization. It’s not all about you—it’s about the whole team.”
You can read more about Fernandes and his visit to MIT here.
UVA, Oxford, CEIBS Rise in All-New Financial Times 2019 Ranking
The latest Financial Times MBA ranking is officially out, with several international schools rising closer and closer to the top in 2019.
