Intrapreneurship at DaVita HealthCare Partners

Joseph B.  Fuller; David J. Collis; Matthew G. Preble

Case | HBS Case Collection | February 2015 (Revised June 2017)

Intrapreneurship at DaVita HealthCare Partners

by Joseph B. Fuller, David J. Collis and Matthew G. Preble

Abstract

Josh Golomb, president and general manager of DaVita Rx (Rx), was about to meet with Kent Thiry, CEO of Rx's corporate parent, DaVita Healthcare Partners Inc. (DaVita), in August 2013. The two would discuss whether Golomb should lead a new DaVita venture, Paladina Health (Paladina), which operated a network of primary care clinics.
DaVita had launched Paladina in early 2011, and the startup was struggling to gain traction: Paladina had already used a significant amount of the $40 million in funding committed by DaVita; the company's primary care clinics had not yet reached the number of patients necessary to sustain a profitable business; and it was in the midst of trying to integrate with another primary care clinic operator that it had acquired years earlier but was just now merging into Paladina.
Although the startup was young and still finding its way in an emerging industry, Thiry believed that Paladina would benefit from Golomb's experiences at Rx, which had also struggled in its early years. The situation at Rx became so precarious at one point that many of DaVita's senior leaders wanted to shut it down entirely. Rx made it through those challenging early years though, and was expected to exceed $600 million in revenues for 2013.
However, Golomb wondered how relevant his Rx experience was to Paladina. Rx was closely tied to its parent company—DaVita provided dialysis services to patients with end-stage renal disease (ESRD) and Rx supplied medications to ESRD patients—while Paladina's connection to DaVita was less obvious. If Golomb took the job, what could he do to make Paladina's clinics as efficient as possible in terms of service and its economics, without compromising on its value proposition? Was Paladina just too different of a business to be part of the DaVita family?
This case offers an example of "intrapreneurship"—i.e. entrepreneurial ventures launched within large companies—at a Fortune 500 company. DaVita has already had a successful experience launching Rx (after some difficult early years), and the company is now even serving patients from some of DaVita's leading competitors. However, Paladina is the company's first intrapreneurial venture outside of its core focus of serving end-stage renal disease (ESRD) patients—DaVita's main function is to provide dialysis services to ESRD patients and Rx provides medication to ESRD patients. Can Paladina succeed simply by following Rx's example, or will it face different challenges?

Keywords: Intrapreneurship; entrepreneurial organizations; startup management; Startup; strategic planning; strategic positioning; corporate strategy; corporate entrepreneurship; Corporate Entrepreneurship; Corporate Strategy; Business Startups; Strategic Planning; Competitive Strategy; Health Industry; United States;

Language: English

Format: Print

28 pages

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Citation:

Fuller, Joseph B., David J. Collis, and Matthew G. Preble. "Intrapreneurship at DaVita HealthCare Partners." Harvard Business School Case 315-046, February 2015. (Revised June 2017.)

WeWork co-founder Miguel McKelvey was concerned about the culture of his rapidly expanding global venture, as the scale and complexity of the organization increased. In particular, he wanted to ensure that WeWork continued to be a great place to work, both because he cared about WeWork's people and because a better experience of work was core to the company’s brand. In the summer of 2017, he had made a presentation to the company at an all-hands meeting. In it, he proposed the creation of a culture operations team, and that he announced that he would take the title of chief culture officer to lead it. In this case, which describes the founding and growth of WeWork from 2010, we encounter Miguel planning for his new role with co-founder Adam Neumann and envisioning a “culture OS” that he and Adam would use to lead the organization internally -- and to offer as a “product” to scaled enterprise externally.

Case | HBS Case Collection | March 2018 (Revised March 2018)

Chewy.com (A)

Jeffrey F. Rayport and Matthew G. Preble

In late 2013, Ryan Cohen, cofounder and CEO of online pet products retailer Chewy.com, faces a “bet the company decision”—whether to stay with a third-party logistics provider (3PL) for all of its e-commerce fulfillment or to take the function in-house. Cohen worries that the existing 3PL may not be able to scale with Chewy’s projected growth or maintain the company’s performance standards for service quality and fulfillment. While Cohen is convinced that achieving scale is essential to making the business work, he is also keenly aware that neither he nor his cofounders have any experience in managing logistics. In addition, any move they might make to in-source fulfillment would likely destabilize the existing 3PL relationship, on which the viability of the fast-growing business depends. Cohen’s board members are concerned enough about the situation to pressure him to throttle back growth and maintain the 3PL. Cohen sees four possible options: stay with the current 3PL; add another 3PL to handle additional volume; stay with the 3PL and add a company-owned fulfillment center in a new region; or fully in-source fulfilment as quickly as possible. In light of Cohen’s goal of reaching $500 million in sales by 2018, the board is divided about what to do, and the CEO is left with what appears to be a choice between two risky options as he attempts to move Chewy forward.

Keywords: Pet Food; Pet Products; retail; e-commerce; Growth and Development Strategy; Service Operations; Decision Choices and Conditions; Retail Industry; Service Industry; Florida; United States;

Citation:

Rayport, Jeffrey F., and Matthew G. Preble. "Chewy.com (A)." Harvard Business School Case 818-079, March 2018. (Revised March 2018.) View Details

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Cohen and Chewy’s other board members decided to fully insource order fulfilment, and commenced building an order fulfilment center near its 3PL partner’s facility. As soon as the 3PL learned that Chewy would be managing its own order fulfilment, however, it decided to triple what it charged Chewy to fulfill each order. What should Chewy do?

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