The McKinsey Quarterly Newsletter: December 2001 	
  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   [IMAGE]  Greetings from The McKinsey Quarterly!  Why can two nearly identical cars, with only minor differences in components and trim, end up with dramatically different fates in the marketplace? The Toyota Corolla and the Chevrolet Prizm are essentially twins, built side by side at the same plant in California. But General Motors sells only one Prizm for every three Corollas sold by Toyota, though GM lays out nearly $750 more per car in buyer incentives.  This curious case shows how the Big Three automakers have fallen into the classic trap of commoditizing industries. Carmakers underemphasize the emotional relationships buyers have with their cars and the brand attachments forged thereby. As cars become more alike, price too often becomes the reason for choosing one nameplate over another.  The remedy? Detroit must quit squandering its marketing budgets on rebates and incentives and focus instead on all elements of brand affiliation. Steer your cursor toward "Revving up auto branding " to read the new rules of the road.  See you at the site!  Lang Davison Editor, mckinseyquarterly.com  [IMAGE]  This month at mckinseyquarterly.com   Facing disconnection: Hard choices for Europe's telcos   Can it be only two years since the fate of the Continent's telecom companies 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 shedding assets and stepping away from areas that telcos once regarded as central to their business.  Chips off a new block   The semiconductor industry is already reeling from the technology slowdown, yet a new generation of plastic-based chips could soon make things worse. Although these ICs currently 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 business model that was supposed to make World Wide Web-based companies profitable? Just another overhyped myth from the days of bubbledom, right? Not so fast: research from McKinsey and Jupiter Media Metrix shows that community features create substantial value for both content and retail sites.   Portals for all platforms   Nobody wants to own a narrowband portal these days. But the future looks rosy for broadband portals, to judge by the many companies jumping into that space. This piece sorts out the competitors and suggests that they focus on their "native" broadband platforms-PCs, TVs, or mobile devices-while preparing for the multiplatform future.  Power by the minute   Can the electricity industry be deregulated without the threat of a California-style meltdown? A nifty technique called "dynamic pricing" may provide the answer-though it requires huge upfront expenditures to retrofit or replace household meters.  [IMAGE]  New! The McKinsey Quarterly Reader   This month we are pleased to announce the debut of The McKinsey Quarterly Reader, featuring selected articles from our archive. They are grouped together by theme and presented in convenient PDF format.  The articles in our first Reader, "Strategy in an uncertain world ," present tools and techniques that managers can use to reduce the risks involved in making strategic decisions.  Note: Adobe Acrobat version 3.0 or higher is required. The large file size (740K) may require a lengthy download time for users without a broadband connection to the Internet. [IMAGE]  Share the wealth!  If you know colleagues who would be interested in The McKinsey Quarterly, please forward this e-mail message to them . [IMAGE]  You are receiving this monthly newsletter 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, change 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. Address questions or comments to: quarterly_info@mckinsey.com   	

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