More from these Authors

• Teaching Note | HBS Case Collection | December 2019

  Under Armour

  Rory McDonald and Matt Higgins

  Citation:

  McDonald, Rory, and Matt Higgins. "Under Armour." Harvard Business School Teaching Note 620-070, December 2019.  View Details

  CiteView DetailsPurchase

  Related

• Case | HBS Case Collection | November 2019 (Revised December 2019)

  Marcus by Goldman Sachs

  Rory McDonald, Samir Junnarkar and David Lane

  Five years on from the 2008 financial crisis, Goldman Sachs remained wounded. Revenues at the global investment bank had stagnated below pre-crisis levels, and the firm had yet to rebound from a substantial decline in securities-trading revenues. Marcus by Goldman Sachs was one response—an effort that operated as a start-up but was sponsored by senior Goldman executives—to grow the firm’s revenues by entering consumer banking with digital-only offerings. The moved marked a dramatic cultural as well as product shift: the 150 year-old institution historically served only businesses and the wealthiest of individuals. In 2016, Marcus launched unsecured personal loans for the mass market; it rolled out high-yield deposits in 2017 and a credit card in partnership with Apple in 2019. By autumn of that year, Marcus had $5 billion in loans outstanding and $55 billion in deposits. It also faced a dilemma—ceaseless and rapid expansion had strained its people and infrastructure, yet Goldman expected Marcus to generate $1 billion in revenues in 2020. What now was the better bet, to pause to allow performance to catch up with growth, or to seize the additional opportunities that beckoned for Marcus to diversify into consumer finance products?

  Keywords: Corporate Entrepreneurship; Banks and Banking; Innovation Leadership; Growth and Development Strategy; Growth Management; Organizational Culture; Financial Services Industry; United Kingdom;

  Citation:

  McDonald, Rory, Samir Junnarkar, and David Lane. "Marcus by Goldman Sachs." Harvard Business School Case 620-005, November 2019. (Revised December 2019.)  View Details

  CiteView DetailsEducators

  Related

• Article | Organization Science | November–December 2019

  Pivoting Isn't Enough? Managing Strategic Reorientation in New Ventures

  Rory McDonald and Cheng Gao

  New ventures often experience deviations from their plans that oblige them to reorient in pursuit of better fit between their evolving products and their target customers. Yet research is largely silent on how managers explain such changes and justify their ventures in the wake of fundamental redirections in strategy. Ventures initially attain legitimacy and amass resources on the strength of aims that audiences find compelling; later, those early claims can complicate course corrections. To shed light on how ventures manage strategic reorientations, we conducted an inductive, comparative-case of software-based financial advisors. The ventures pursued parallel reorientations and produced comparable end products, but diverged conspicuously in managing audiences during transitions. Our process model, inspired by these differences, proposes a sequence of stratagems that may enable entrepreneurs to alter strategy while portraying faithfulness to enduring aims. Our theoretical framework posits that for ventures, reorientation without penalty may depend on how they anticipate, justify, and stage changes to various audiences.

  Keywords: strategic reorientation; technology entrepreneurship; innovation; product development processes; organizational adaptation; qualitative methods (general); Entrepreneurship; Technology; Organizational Change and Adaptation; Strategy; Innovation and Invention; Product Development; Communication Strategy;

  Citation:

  McDonald, Rory, and Cheng Gao. "Pivoting Isn't Enough? Managing Strategic Reorientation in New Ventures." Organization Science 30, no. 6 (November–December 2019): 1289–1318.  View Details

  CiteView DetailsFind at Harvard

  Related