White brands: heroes or villains?

White brands: heroes or villains?

IE Focus | By Carmen Abril, Professor at IE Business School

Things are not often black or white, but rather tend to come in varying shades of gray. The world of white brands is no exception. They are no better or worse than other products, but they are certainly competitive.We are currently witnessing a controversial debate on white brands in Spain owing to the rapid growth they have enjoyed in recent months, where they have reached 38% of the sales of packaged large-consumption products.

As a result of this situation, which, on the other hand, is nothing new, many manufacturers, such as Danone, Nabisco and Kellogg´s, among others, have launched a massive advertising campaign to clarify certain concepts that consumers supposedly confuse regarding the manufacture of white brands in the hope that the message hampers their growth.

The importance of the issue and the controversy it has caused is worth taking a look at. First of all, we should start by giving this type of brand its correct name: if, by white brands, we understand undistinguished products based purely on their composition and ingredients and directly comparable with others, such as generic drugs, the name given to these products is incorrect.

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International experts in Social Entrepreneurship meet at IE University

On July  9, 10 and 11 IE University, in collaboration with the Social Entrepreneurship and Education Consortium (SEEC), hosted a conference for international experts in Social Entrepreneurship in Segovia.  This event, organized by IE professor Rachida Justo, was the first international workshop in Spain on Social Entrepreneurship. The conference was joined by experts from over 20…

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Free Competition and Good Strife

IE Focus: Free Competition and Good StrifeIE Focus | By Miguel Herrero de Jáuregui. Professor. IE School of Arts & Humanities
In the light of recent events the dogmas of economic theory have been brought into question, with perhaps one exception: free competition, as defended by the Ancient Greeks.
Many dogmas of classical economical theory have been hastily reviewed in recent times. But I am led to believe that there is one which resists criticism from almost all sides, apart from a few nostalgic diehards. Free competition seems to stand today as a pillar of new and revised models much as it always has from the times of Adam Smith. The first theories on the benefits of competition are, however, much older. In Greece, more than 2,700 years ago, Hesiod began his Works and Days with these lines (see this previous post on translation of ancient poetry).
So there was not only one race of Strifes, but all over the earth
there are two. A man would praise the first one after understanding her.
The other is blameworthy: and their spirit is wholly different.
For one fosters evil war and battle,
being cruel. No man loves her, but men, forced
by the will of the inmortals, pay honour to harsh Strife.
But the other was born the first from dark Night,
and the son of Cronos, who sits above and dwells in the aether, set her
in the roots of the earth: and she is much better for men.
She wakes up even the shiftless to work;
for a man grows eager to work when he sees another
rich man who hastens to plough and plant
and put his house in good order; and neighbour vies with his neighbour
as he hurries after wealth. This Strife is good for mortals
And potter is angry with potter, and craftsman with craftsman,
and beggar is jealous of beggar, and bard of bard.
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Subprime mortgages in Spain: do they exist?

IE Focus - Subprime mortgages in SpainIE Focus | By Antonio Rivela and Ignacio de la Torre. Professors. IE Business School
In spite of the real estate bubble, Spain has suffered relatively little fallout from subprime mortgages. Is that because they don’t exist? They exist alright, but they are well controlled.
When commenting on how a high-risk mortgage (subprime) was turned into a fantastic AAA-rated bond backed by prestigious rating agencies through the magical art of financial engineering, the prestigious North American investor, Warren Buffett, said “you can´t make a silk purse out of sow’s ear”. A subprime mortgage is a mortgage loan awarded by banks to customers that have no credit record and, in many cases, no proven income. This process for converting “sow’s ears into silk purses” (the mutation of subprime mortgages into bonds with the highest possible credit rating) was implemented through securitisations and it is of key importance for understanding the financial debacle facing the West.

However, many foreign analysts are asking why the subprime hurricane has had hardly any effect on the Spanish market in comparison with its impact on the North American or British banking market if, in theory, Spain was on a similar track (housing price bubble, high credit penetration and runaway foreign deficit). Although many have responded to this question with apocalyptic visions, it is our opinion that the actual situation is much less dramatic. In this article, we will make a detailed analysis of this opinion as objectively as possible.

As was pointed out by Alfredo Sáenz, CEO of Banco Santander, subprime mortgages do exist in Spain. However, his statement needs to be explained: yes, they do exist, but to a much lesser extent than in other markets. Where do they come from? There are two basic ways in which the subprime disease can be caught: by awarding subprime mortgages or by buying securitisations linked to subprime risk. If we analyse the first of the phenomena, there are four very good reasons why hardly any subprime mortgages have been awarded in Spain:

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Liquid technology

1739IE Focus | By Enrique Dans, Professor at IE Business School
Politicians, entrepreneurs, and even some governments are trying to hamper the advance of technology. But technology is like liquid in that it can seep through into every aspect of our lives.
Liquids are known for their ability to always adapt to the cavity that contains them and for penetrating permeable surfaces. Modern-day technology is like a solid: it exists in watertight, well-defined compartments. It is associated with specific devices, specific functions and specific sectors of the public. There are generations that are impervious to technology, that refuse to soak it up as if it were trying to replace or detract from rather than complement their activities.

There are politicians who try to stop it, as if that were possible, as if those who oppose technological progress had ever won a battle against it. There are companies who confine it to specific functional areas or restrict it to specific personnel and there are even countries who try to block it so that citizens cannot gain access to it. We constantly come up against situations in which our options for using technology as we would like are scant or even non-existent due to not having access to a certain device, not having connectivity or a power supply, or to pure and simple ignorance.

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IE Business School becomes inaugural CFA Program Partner in Spain

CFA Institute, the global association for investment professionals that awards the prestigious Chartered Financial Analyst® (CFA) designation, is pleased to announce a CFA Program Partnership with IE Business School in Spain. In 2009, the Financial Times Global MBA Rankings ranked IE Business School 3rd in Europe and 6th in the world. IE Business School has…

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