Partnering Up For Business Success?
Posted - 08 February 2012 by Escape Currency
In all walks of life, business included, people have partnered with other people to form successful liaisons. Think of Laurel & Hardy, Lennon and McCartney, Tony & Guy, Torvill & Dean.....the list is endless and timeless. Some business partnerships are obvious, but some less so, one partner being more a”background” or sleeping partner. Let’s have a look at a few of the more well known business hook-ups....
Chanel – “Her kiss, her smile, her perfume – No5” In 1924, three years after creating her now-iconic fragrance Chanel No. 5, Coco Chanel tapped up Pierre Wertheimer, a successful French businessman, to help her establish Parfums Chanel.
While Chanel had the name and the fame, she lacked the capital, marketing prowess, and connections that Wertheimer possessed. (His family owned Bourjois, then the largest cosmetics and fragrance firm in France.)
Wertheimer took a 70% stake in the new company and Chanel received 10%. Theodile Bader, the founder of the Galeries Lafayette department store, who had introduced the pair, was rewarded a 20% slice of the new outfit.
Although the deal made Chanel a wealthy woman, she soured on the business partnership with Wertheimer and unsuccessfully attempted to restructure the terms more favourably. Today, the Wertheimer family owns 100% of the company, including worldwide rights to the Chanel name.
Chanel No. 5 remains one of the best-selling perfumes in history.
McDonalds – “I’m Lovin’ It!!”The New Hampshire-born brothers Richard & Maurice,moved to southern California in the late 1920s with the goal of opening their own business and earning $1 million before they hit 50.
After an unsuccessful attempt to break into the movie business, they opened and ran a hot dog stand and a barbecue restaurant, gaining experience they would later use to pioneer the fast-food industry. In 1948 the brothers reinvented their McDonald's Famous BBQ, firing their car hops, slashing the number of items on the menu, getting rid of utensils and plates, and turning the kitchen into a mechanized assembly line.
By the time Ray Kroc, a paper cup salesman from Illinois discovered McDonald's in 1954, the brothers had already sold 21 McDonald’s franchises. Kroc struck a deal with the brothers for national franchise rights in 1955. In 1961 he purchased the entire business and the rights to the McDonald’s name for $2.7 million.
Today, there are 31,000 Golden Arches around the globe, taking in $22.7 billion a year.
Marks & Spencer – “Don’t ask the price, it’s a penny!” This was the slogan of the original firm, a chain of "penny bazaars", founded by Thomas Spencer and a Jewish immigrant, Michael Marks in Wigan.
It became a household name thanks to the efforts of Marks' son, Simon Marks, and his friend, Israel Seiff. M&S have expanded to 28 countries around the globe. They are mostly present in former British colonies and Eastern Europe; the attempt to expand into Western Europe and the United States failed due to their high prices and the particularly British vision of the company.
The expansion into France was particularly unsuccessful, and eventually they were forced to close all their French stores, though because of the legislation set in place by the French government to protect their labour force, this was a costlier exercise than the Marks and Spencer management anticipated.
The first Marks and Spencer store in central Asia was built in Kabul, Afghanistan in the 1960s. The store was later shut down as the mood of the city turned conservative. Marks and Spencer made their reputation in the 20th century on a policy of only selling British-made goods, relying on quality rather than price to encourage custom.
During the 1980s and 1990s, they went back on this policy. Financial troubles and their inability to appeal to younger customers did not alter the general trend. However, in 2001, with changes in their business focus such as the introduction of the "Per Una" clothing range designed by George Davies, accompanied by a redesign of their underlying business model, profits rose sharply and M&S recovered much of its market share.
Other changes to tradition included accepting credit cards and opening their stores on Sunday occasionally. They traditionally sold clothes from 2 or 3 large British clothing manufactures, using labels such as "St. Michael". However, the St. Michael brand has now been discontinued in favour of Marks & Spencer.
Hewlett Packard – “ Invent!”After graduating with degrees in electrical engineering from Stanford in 1934, Bill Hewlett and David Packard forged a friendship during a two-week camping and fishing trip in Colorado.
Four years later the pair began working part-time on a product based on Hewlett's study of negative feedback in a rented Palo Alto garage with $538 in cash and a used drill press. The result: the HP200A, an audio oscillator designed to test sound equipment.
One of their first customers was Walt Disney Studios (DIS), which purchased eight of the devices to test a new sound system for the movie Fantasia.
In 1939 the men formalized their partnership, flipping a coin to decide their start-up’s name. Hewlett-Packard continued to create innovative tech products throughout the 1940s.
It also became known for its equally innovative open corporate culture and management style. By 1942, HP had eight employees and $522,803 in yearly revenue. In 1961, the company was earning $87.9 million and was listed on the New York Stock Exchange. Today the company that introduced laser jet printers, touch screens, and personal computers is a global behemoth with $104.3 billion in annual sales.
Tags: business, partnerships, Hewlett-Packart, Chanel, Marks and Spencer, McDonalds, Stock Exchange, success
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