Case | HBS Case Collection | 2011 (Revised from original 2004 version)

Opium and Entrepreneurship in the Nineteenth Century

by Geoffrey G. Jones, Elisabeth Koll and Alexis Lefort

Abstract

Concerns the growth of multinational trading companies in the first global economy. Examines two Scottish-owned merchant houses, Jardine Matheson and James Finlay, and shows their changing trade and investment strategies as well as their use of an organizational form later known as business groups. Also demonstrates the role of ethnic networks in globalization during this historical period. A rewritten version of an earlier case.

Keywords: History; Globalized Economies and Regions; Multinational Firms and Management; Ethnicity Characteristics; Groups and Teams; Social and Collaborative Networks; Trade; China;

Format: Print

21 pages

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Citation:

Jones, Geoffrey G., Elisabeth Koll, and Alexis Lefort. "Opium and Entrepreneurship in the Nineteenth Century." Harvard Business School Case 805-010, September 2011. (Revised from original July 2004 version.)

Considers the creation of the world's largest fragrance company by Bernd Beetz, appointed chief executive of Coty Inc. in 2001. In 1990 the German consumer goods company Benkiser began acquiring fragrance and cosmetics brands with the intent of developing a beauty business. These included the long-established, but relatively small, U.S. fragrance company Coty. In 1996 the beauty business was spun off under the name Coty. When Beetz was hired as chief executive, it was still a fragmented collection of recently acquired brands. The case describes how Beetz re-ignited the dormant celebrity fragrance business with the successful launch of a new Jennifer Lopez fragrance line. Fashioning a new entrepreneurial culture based on the principles of "faster, further, freer," Coty hired longstanding executives from other firms and liberated their entrepreneurial capabilities, refreshing brands which had been tarnished into a global mass color cosmetics brand. In 2005 the acquisition of Calvin Klein from Unilever, and its renewal, catapulted Coty into the position of the world's largest fragrance company. The case provides an opportunity to examine the entrepreneurial, cultural, and organizational factors which enable acquired brands and employees to be re-invigorated and molded into a dynamic new global business. It asks if the cultural and other factors behind its rapid growth can sustain the company as it seeks growth much further as a top-five beauty company.

The case describes the foundation of Christian Dior, the leading Parisian fashion house, in 1946 and its subsequent globalization strategy. After explaining the historical origins of France's preeminence in upscale fashion, the case explores the challenges to this position from New York after World War 2, and the importance of Christian Dior's New Look in restoring French fashion to world leadership. The case examines, in particular, Dior's innovative strategy to combine a high-fashion business in Paris with a ready-to-wear business in New York, and his subsequent pursuit of licensing opportunities in jewelry and other luxury products. The case provides an opportunity to explore the role of creativity in the luxury fashion industry, and the challenges and opportunities of globalizing such an industry.

The case describes the creation of Turkey's largest business group by Vehbi Koç. The foundation of this group in the interwar years, and its subsequent diversification into many industries, including automobiles, household goods, and services, is analysed. The case serves as a vehicle to explain why diversified business groups are so important in emerging markets such as Turkey. It explores the role of market imperfections, government policies and entrepreneurial ambition in their creation, as well as the organizational challenges posed by managing such diversified firms owned by a family. Much of the firm's growth came from licensing and joint venture agreements with multinational firms which were unable, or unwilling, to invest directly in Turkey because of political risk and government restrictions. The case ends in 1988, when the founder has received a report from the management consultancy Bain calling for the firm to reduce the range of activities it undertakes because of the competitive challenges resulting from the liberalization of the Turkish economy.

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