Launching a World-Class Joint Venture

James  Bamford; David  Ernst; David G. Fubini

Article | Harvard Business Review | February 2004

Launching a World-Class Joint Venture

by James Bamford, David Ernst and David G. Fubini

Abstract

More than 5,000 joint ventures, and many more contractual alliances, have been launched worldwide in the past five years. Companies are realizing that JVs and alliances can be lucrative vehicles for developing new products, moving into new markets, and increasing revenues. The problem is, the success rate for JVs and alliances is on a par with that for mergers and acquisitions--not very good. The authors, all McKinsey consultants, argue that JV success remains elusive for most companies because they don't pay enough attention to launch planning and execution. The launch phase begins with the parent companies' signing of a memorandum of understanding and continues through the first 100 days of the JV or alliance's operation. During this period, it's critical for the parents to convene a team dedicated to exposing inherent tensions early. Specifically, the launch team must tackle four basic challenges. First, build and maintain strategic alignment across the separate corporate entities, each of which has its own goals, market pressures, and shareholders. Second, create a shared governance system for the two parent companies. Third, manage the economic interdependencies between the corporate parents and the JV. And fourth, build a cohesive, high-performing organization (the JV or alliance). Using real-world examples, the authors offer their suggestions for meeting these challenges.

Keywords: joint ventures; Mergers ＆ Acquisitions; organizational structure; Strategic alliances; Joint Ventures; Alliances; Organizational Structure; Alignment; Mergers and Acquisitions;

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Citation:

Bamford, James, David Ernst, and David G. Fubini. "Launching a World-Class Joint Venture." Harvard Business Review 82, no. 2 (February 2004): 90–100.

By 2016, the Big Apple Circus has weathered many storms in its 38 seasons as one of the most well-known New York City nonprofits. Will Weiss, the executive director, has witnessed his share of chaos during four years at Big Apple. After a slight resurgence following the precipitous drop in ticket sales during the financial crisis, the operating health and finances of the Circus are growing more tenuous each year. Big Apple Circus is on the brink and Will Weiss must determine if there is a way forward.

Case | HBS Case Collection | December 2017

Armarium: Luxury Fashion Brands for Rent

Jill Avery, David Fubini, Natasha Dossa and Devon Stewart

Armarium, a two-sided online platform that offered consumers the opportunity to rent the most coveted, current season high fashion clothing and accessories from the top global luxury brands, had emerged from its first sales season with two distinct customer segments: the High Net Worth (HNW) woman and the High Earner, Not Rich Yet (HENRY) woman. As it began to scale its operations, it had to decide which customer segment was the more desirable target market and how to refine the company's value proposition to maximize value creation for both consumers and the luxury brands that supported the business model. The jury was still out on whether a rental model could attract higher income women who could afford to buy luxury brands and whether it could support the $400 rental price points Armarium would need to charge for its one-of-a-kind pieces with retail values that could reach as high as $15,000. The two founders faced significant scaling challenges, from how to establish guardrails around curation of the collection to go-to-market distribution channel strategy and customer acquisition strategy.

Keywords: marketing; marketing strategy; brands and branding; brand management; retailing; sharing economy; luxury; luxury brand; ecommerce; e-commerce; Startup; fashion; brand positioning; customer acquisition; Marketing; Marketing Channels; Marketing Strategy; Brands and Branding; Business Startups; Luxury; Growth and Development Strategy; Fashion Industry; Retail Industry; Apparel and Accessories Industry; United States; North America;

Citation:

Avery, Jill, David Fubini, Natasha Dossa, and Devon Stewart. "Armarium: Luxury Fashion Brands for Rent." Harvard Business School Case 518-047, December 2017. View Details

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In February 2013, US Airways announced that it would merge with American Airlines to create the world’s largest airline. Doug Parker, the CEO of US Airways, would become CEO of the new American Airlines Group (AAL). The case describes a number of critical decisions Parker made and actions that he took in the course of the acquisition integration process. All focused on how best to combine the two airlines’ core systems and operating processes as well as the appropriate scope and speed of strategic changes. Now, Parker must decide on the composition of AAL’s senior executive team. Should Parker select a team dominated by US Airways executives with whom he has successfully worked for decades? Or should he establish a new team with roughly equal representation from both airlines? Parker’s choice will send important signals to employees about the extent to which the transaction will be viewed as a merger of equals or as a takeover by US Airways.

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