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• Case | HBS Case Collection | April 2020 (Revised May 2020)

  TransDigm in 2017: The Beginning of the End or the End of the Beginning?

  Benjamin C. Esty and Daniel Fisher

  TransDigm was a highly acquisitive company that manufactured a wide range of highly engineered aerospace parts for both military and commercial customers. Over the ten years ending in 2016, its stock price had increase ten times, and both EBITDA and revenues had grown at compound annual rates in excess of 20%. But in early 2017, investors, customers, and government officials began to question the implementation, sustainability, and ethics of the firm’s unique value creation strategy. That strategy consisted of three parts: value-based pricing, cost reductions, and new product development. In the short term, CEO Nick Howley had to decide whether to respond to the barrage of criticism; in the longer term, he had to decide whether to change the firm’s highly successful strategy.

  Keywords: value capturing; Pricing strategy; supplier power; buyer power; Porter's Five Forces; bargaining power; monopoly; aerospace; acquisition strategy; value drivers; ethical behavior; regulation; growth strategy; Business ethics; defense; procurement; sustainability; Value-Based Business Strategy; Acquisition; Ethics; Private Equity; Financial Strategy; Growth Management; Performance Evaluation; Business Strategy; Competitive Strategy; Horizontal Integration; Value Creation; Competitive Advantage; Aerospace Industry; Air Transportation Industry; United States;

  Citation:

  Esty, Benjamin C., and Daniel Fisher. "TransDigm in 2017: The Beginning of the End or the End of the Beginning?" Harvard Business School Case 720-422, April 2020. (Revised May 2020.)  View Details

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• Supplement | HBS Case Collection | April 2020 (Revised May 2020)

  TransDigm in 2017: The Beginning of the End or the End of the Beginning?

  Benjamin C. Esty and Daniel Fisher

  TransDigm was a highly acquisitive company that manufactured a wide range of highly engineered aerospace parts for both military and commercial customers. Over the ten years ending in 2016, its stock price had increase ten times, and both EBITDA and revenues had grown at compound annual rates in excess of 20%. But in early 2017, investors, customers, and government officials began to question the implementation, sustainability, and ethics of the firm’s unique value creation strategy. That strategy consisted of three parts: value-based pricing, cost reductions, and new product development. In the short term, CEO Nick Howley had to decide whether to respond to the barrage of criticism; in the longer term, he had to decide whether to change the firm’s highly successful strategy.

  Keywords: Acquisition; Ethics; Private Equity; Financial Strategy; Growth Management; Performance Evaluation; Business Strategy; Competitive Strategy; Horizontal Integration; Value Creation; Competitive Advantage; Aerospace Industry; Air Transportation Industry; United States;

  Citation:

  Esty, Benjamin C., and Daniel Fisher. "TransDigm in 2017: The Beginning of the End or the End of the Beginning?" Harvard Business School Spreadsheet Supplement 720-855, April 2020. (Revised May 2020.)  View Details

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• Supplement | HBS Case Collection | January 2020

  MoviePass: The 'Get Big Fast' Strategy

  Benjamin C. Esty and Daniel Fisher

  In August 2017, MoviePass dramatically lowered its subscription price from $50 per month to just $10 for up to one movie per day. The idea was to rapidly scale the business to the point where they could generate incremental revenue streams form related businesses (e.g., a share of ticket and concession revenues from theaters, advertising revenue from movie studios; and revenue from ride-sharing companies). Within two days, Moviepass had gotten 150k new subscribers; within six months, they had more than 2 million. But as of February 2018, the company faced three challenges: theaters were resisting the concept, investors were shorting the stock in record numbers, and competitors were beginning to appear. Could CEO Lowe convince investors that they did, indeed, have a viable business model and could monetize their growing subscriber base? At the same time, Lowe had to decide whether to raise subscription prices to cover the growing losses or keep prices low to attract subscribers as quickly as possible.

  Keywords: Market entry; growth strategy; profit vs. growth; subscription business; cash burn; Data Analytics; get-big-fast; buyer power; strategy implementation; movie industry; Racing; Business Strategy; Value Creation; Consolidation; Cash Flow; Growth Management; Business Startups; Entrepreneurship; Disruptive Innovation; Mobile Technology; Motion Pictures and Video Industry; Entertainment and Recreation Industry; Advertising Industry; Information Industry; United States;

  Citation:

  Esty, Benjamin C., and Daniel Fisher. "MoviePass: The 'Get Big Fast' Strategy." Harvard Business School Spreadsheet Supplement 720-854, January 2020.  View Details

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