STRATEGIES FOR SUPERIOR PERFORMANCE IN RECESSIONS: PRO OR COUNTER-CYCLICAL?

Recessions are recurring events in which most firms suffer severe impacts while others are less affected or may even prosper. Strategic management has made little progress in understanding such performance differences. In a scenario of decreased demand, intensified competition, and higher uncertainty, most firms try to survive by pro-cyclically cutting costs and investments. But firms could take advantage of undervalued resources in the market to counter-cyclically invest in new business opportunities to overtake competitors. We survey Brazilian firms in various industries about the 2008-2009 recession and analyze data using PLS-SEM. We find that while most firms pro-cyclically reduce costs and investments in recessions, a counter-cyclical strategy of investing in opportunities created by changes in the market enables superior performance. Most successful are firms with a propensity to recognize opportunities, an entrepreneurial orientation to invest, and the flexibility to efficiently implement investments.

Investigation on the development of bidding strategies for a wind farm owner

In this paper, the development of bidding strategies is investigated for a wind farm owner. The optimization model is characterized by making the analysis of scenarios. The proposed approach allows evaluating alternative production strategies in order to submit bids to the electricity market with the goal of maximizing profits. The problem is formulated as a linear programming problem. An application to a case study is presented

Evidence of portuguese stock market abnormal returns

According to the stock market efficiency theory, it is not possible to consistently beat the market. However, technical analysis is more and more spread as an efficient way to achieve abnormal returns. In fact there is evidence that momentum investing strategies provide abnormal returns in different stock markets, Jegadeesh, N. and Titman, S. (1993), George, T. and Hwang, C. (2004) and Du, D. (2009). In this work we study if like other markets, the Portuguese stock market also allows to obtain abnormal returns, using a strategy that consists in picking stocks according to their past performance. Our work confirms the results of Soares, J. and Serra, A. (2005) and Pereira, P. (2009), showing that an investor can get abnormal returns investing in momentum portfolios. The Portuguese stock market evidences momentum returns in short term, exhibiting reversal in long term.

A risk-averse optimization model for trading wind energy in a market environment under uncertainty

In this paper, a stochastic programming approach is proposed for trading wind energy in a market environment under uncertainty. Uncertainty in the energy market prices is the main cause of high volatility of profits achieved by power producers. The volatile and intermittent nature of wind energy represents another source of uncertainty. Hence, each uncertain parameter is modeled by scenarios, where each scenario represents a plausible realization of the uncertain parameters with an associated occurrence probability. Also, an appropriate risk measurement is considered. The proposed approach is applied on a realistic case study, based on a wind farm in Portugal. Finally, conclusions are duly drawn. (C) 2011 Elsevier Ltd. All rights reserved.

Mergers and acquisitions as strategies of business expansion in the pharmaceutical industry

Introduction: The present paper deals with the issue of the increasing usage of corporation mergers and acquisitions strategies within pharmaceutical industry environment. The aim is to identify the triggers of such business phenomenon and the immediate impact on the financial outcome of two powerful biopharmaceutical corporations: Pfizer and GlaxoSmithKline, which have been sampled due to their successful approach of the tactics in question. Materials and Methods: In order to create an overview of the development steps through mergers and acquisitions, the historical data of the two corporations has been consulted, from their official websites. The most relevant events were then associated with adequate information from the financial reports and statements of the two corporations indulged by web-based financial data providers. Results and Discussions: In the past few decades Pfizer and GlaxoSmithKline have purchased or merged with various companies in order to monopolize new markets, diversify products and services portfolios, survive and surpass competitors. The consequences proved to be positive although this approach implies certain capital availability. Conclusions: Results reveal the fact that, as far as the two sampled companies are concerned, acquisitions and mergers are reactions at the pressure of the highly competitive environment. Moreover, the continuous diversification of the market’s needs is also a consistent motive. However, the prevalence and the eminence of mergers and acquisition strategies are conditioned by the tender offer, the announcer’s caliber, research and development status and further other factors determined by the internal and external actors of the market.

Seller, buyer and VPP agents behavior on a simulated electricity market

Competitive electricity markets are complex environments, involving a large number of different entities, playing in a dynamic scene to obtain the best advantages and profits. MASCEM is an electricity market simulator able to model market players and simulate their operation in the market. As market players are complex entities, having their characteristics and objectives, making their decisions and interacting with other players, a multi-agent architecture is used and proved to be adequate. MASCEM players have learning capabilities and different risk preferences. They are able to refine their strategies according to their past experience (both real and simulated) and considering other agents’ behavior. Agents’ behavior is also subject to its risk preferences.

ANN based day-ahead ancillary services forecast for electricity market simulation

Adequate decision support tools are required by electricity market players operating in a liberalized environment, allowing them to consider all the business opportunities and take strategic decisions. Ancillary services (AS) represent a good negotiation opportunity that must be considered by market players. Based on the ancillary services forecasting, market participants can use strategic bidding for day-ahead ancillary services markets. For this reason, ancillary services market simulation is being included in MASCEM, a multi-agent based electricity market simulator that can be used by market players to test and enhance their bidding strategies. The paper presents the methodology used to undertake ancillary services forecasting, based on an Artificial Neural Network (ANN) approach. ANNs are used to day-ahead prediction of non-spinning reserve (NS), regulation-up (RU), and regulation down (RD). Spinning reserve (SR) is mentioned as past work for comparative analysis. A case study based on California ISO (CAISO) data is included; the forecasted results are presented and compared with CAISO published forecast.

Optimal strategies for marine wildlife tourism in small islands

Tese de Doutoramento, Ciências Económicas e Empresariais (especialidade de Economia), 18 de Junho de 2015, Universidade dos Açores

Stochastic short-term maintenance scheduling of GENCOs in an oligopolistic electricity market

In the proposed model, the independent system operator (ISO) provides the opportunity for maintenance outage rescheduling of generating units before each short-term (ST) time interval. Long-term (LT) scheduling for 1 or 2 years in advance is essential for the ISO and the generation companies (GENCOs) to decide their LT strategies; however, it is not possible to be exactly followed and requires slight adjustments. The Cournot-Nash equilibrium is used to characterize the decision-making procedure of an individual GENCO for ST intervals considering the effective coordination with LT plans. Random inputs, such as parameters of the demand function of loads, hourly demand during the following ST time interval and the expected generation pattern of the rivals, are included as scenarios in the stochastic mixed integer program defined to model the payoff-maximizing objective of a GENCO. Scenario reduction algorithms are used to deal with the computational burden. Two reliability test systems were chosen to illustrate the effectiveness of the proposed model for the ST decision-making process for future planned outages from the point of view of a GENCO.

Regional governance: strategies and disputes in health region management

OBJECTIVE To analyze the regional governance of the health systemin relation to management strategies and disputes.METHODOLOGICAL PROCEDURES A qualitative study with health managers from 19 municipalities in the health region of Bahia, Northeastern Brazil. Data were drawn from 17 semi-structured interviews of state, regional, and municipal health policymakers and managers; a focus group; observations of the regional interagency committee; and documents in 2012. The political-institutional and the organizational components were analyzed in the light of dialectical hermeneutics.RESULTS The regional interagency committee is the chief regional governance strategy/component and functions as a strategic tool for strengthening governance. It brings together a diversity of members responsible for decision making in the healthcare territories, who need to negotiate the allocation of funding and the distribution of facilities for common use in the region. The high turnover of health secretaries, their lack of autonomy from the local executive decisions, inadequate technical training to exercise their function, and the influence of party politics on decision making stand as obstacles to the regional interagency committee’s permeability to social demands. Funding is insufficient to enable the fulfillment of the officially integrated agreed-upon program or to boost public supply by the system, requiring that public managers procure services from the private market at values higher than the national health service price schedule (Brazilian Unified Health System Table). The study determined that “facilitators” under contract to health departments accelerated access to specialized (diagnostic, therapeutic and/or surgical) services in other municipalities by direct payment to physicians for procedure costs already covered by the Brazilian Unified Health System.CONCLUSIONS The characteristics identified a regionalized system with a conflictive pattern of governance and intermediate institutionalism. The regional interagency committee’s managerial routine needs to incorporate more democratic devices for connecting with educational institutions, devices that are more permeable to social demands relating to regional policy making.

Investment focused strategies in electricity markets using the ITEM-game simulator

This paper presents a methodology to establish investment and trading strategies of a power generation company. These strategies are integrated in the ITEM-Game simulator in order to test their results when played against defined strategies used by other players. The developed strategies are focused on investment decisions, although trading strategies are also implemented to obtain base case results. Two cases are studied considering three players with the same trading strategy. In case 1, all players also have the same investment strategy driven by a market target share. In case 2, player 1 has an improved investment strategy with a target share twice of the target of players 2 and 3. Results put in evidence the influence of the CO2 and fuel prices in the company investment decision. It is also observed the influence of the budget constraint which might prevent the player to take the desired investment decision.

A stochastic programming approach for the development of offering strategies for a wind power producer

A stochastic programming approach is proposed in this paper for the development of offering strategies for a wind power producer. The optimization model is characterized by making the analysis of several scenarios and treating simultaneously two kinds of uncertainty: wind power and electricity market prices. The approach developed allows evaluating alternative production and offers strategies to submit to the electricity market with the ultimate goal of maximizing profits. An innovative comparative study is provided, where the imbalances are treated differently. Also, an application to two new realistic case studies is presented. Finally, conclusions are duly drawn.

How market power affects the behaviour of a pumped storage hydro unit in the day-ahead electricity market?

The integration of large amounts of wind energy in power systems raises important operation issues such as the balance between power demand and generation. The pumped storage hydro (PSH) units are seen as one solution for this issue, avoiding the need for wind power curtailments. However, the behavior of a PSH unit might differ considerably when it operates in a liberalized market with some degree of market power. In this regard, a new approach for the optimal daily scheduling of a PSH unit in the day-ahead electricity market was developed and presented in this paper, in which the market power is modeled by a residual inverse demand function with a variable elasticity. The results obtained show that increasing degrees of market power of the PSH unit correspond to decreasing levels of storage and, therefore, the capacity to integrate wind power is considerably reduced under these circumstances.

Optimal offering strategies for wind power producers considering uncertainty and risk

This paper provides a two-stage stochastic programming approach for the development of optimal offering strategies for wind power producers. Uncertainty is related to electricity market prices and wind power production. A hybrid intelligent approach, combining wavelet transform, particle swarm optimization and adaptive-network-based fuzzy inference system, is used in this paper to generate plausible scenarios. Also, risk aversion is explicitly modeled using the conditional value-at-risk methodology. Results from a realistic case study, based on a wind farm in Portugal, are provided and analyzed. Finally, conclusions are duly drawn.

Self-scheduling and bidding strategies of thermal units with stochastic emission constraints

This paper is on the self-scheduling problem for a thermal power producer taking part in a pool-based electricity market as a price-taker, having bilateral contracts and emission-constrained. An approach based on stochastic mixed-integer linear programming approach is proposed for solving the self-scheduling problem. Uncertainty regarding electricity price is considered through a set of scenarios computed by simulation and scenario-reduction. Thermal units are modelled by variable costs, start-up costs and technical operating constraints, such as: forbidden operating zones, ramp up/down limits and minimum up/down time limits. A requirement on emission allowances to mitigate carbon footprint is modelled by a stochastic constraint. Supply functions for different emission allowance levels are accessed in order to establish the optimal bidding strategy. A case study is presented to illustrate the usefulness and the proficiency of the proposed approach in supporting biding strategies. (C) 2014 Elsevier Ltd. All rights reserved.