Christian (Chris) Viatte, head of service experience and innovation at Swisscom, market leader in Switzerland’s telecommunications industry, strode into his office and dropped into his chair. Some of Swisscom’s top executives would soon be holding a meeting to discuss the company’s partnership with Mila, an on-demand home service marketplace start-up. Under Chris’s leadership, Swisscom and Mila had created Swisscom Friends, a service solution connecting Swisscom customers with vetted, tech-savvy people in their neighbourhood who could help them with small service requests. By 2015, Mila and Swisscom had built up a service crowd of more than 1,500 active “Friends” throughout Switzerland, and Swisscom now had to consider the future of what was still a purely contractual relationship. Should Swisscom partially or even fully acquire Mila? Should it withdraw from the partnership and offer the service on its own? Should it become more involved in Mila’s management?

This two-part case discusses the development and management of the partnership between Swisscom and Mila, particularly how Mila grew from being a contractual partner to a fully owned subsidiary of Swisscom.

The primary objective is to learn to evaluate the various ways a larger incumbent firm can collaborate and grow with a smaller company or start-up over time. Students will compare different interfirm governance modes (non-equity alliance, minority acquisition, control acquisition, full acquisition) and make recommendations at two separate points in time. Students will also make recommendations concerning the management of a start-up post-acquisition.

A secondary objective is to gain insights into the decision of an established firm to enter the platform economy and the key challenges and success factors for the (international) expansion of an on-demand services platform provider.

• Acquisitions
• Alliances