Getting it Right the First Time: The Intevep-Honeywell Alliance

INTEVEP, the R&D unit of Venezuela's national petroleum company, entered into a strategic alliance with Honeywell's industrial automation unit. The goal of the alliance was to jointly develop and commercialize new technology. The case describes how both companies executed a plan designed to ensure that the alliance succeeded. This case is used both to explore the basic foundational elements of successful alliances, as well as to look more broadly at the process of partnering. Excerpt UVA-OB-0690 Rev. Oct. 9, 2013 GETTING IT RIGHT THE FIRST TIME: THE INTEVEP–HONEYWELL ALLIANCE Silvana Cusati, INTEVEP's deputy manager for technology, was heading down to the reception area. She had just received a call from the security gatehouse that Phil Imbesi from Honeywell had arrived. In a few short moments, he would be at the entrance to the building. INTEVEP was the research and development unit of Venezuela's national oil company, Petroleos de Venezuela, S.A. (PDVSA). (See Exhibit 1.) INTEVEP and Honeywell, a large U.S.-based industrial automation firm (see Exhibit 2), had recently agreed to form a strategic alliance. The basic business proposition was to take specialized and proprietary process technology developed at INTEVEP and combine it with Honeywell's engineering, manufacturing and commercial expertise to create a marketable product for worldwide applications. Both companies would share the benefits. The product was a Water–Oil Content Analyzer, a piece of oil-field monitoring equipment, and was colloquially known as WOCA. As INTEVEP's leader for the alliance, Cusati had seen dozens of Honeywell executives and managers while both companies conducted their due diligence. Now Cusati was ready to get to work. Imbesi's arrival marked the point where the alliance had shifted from planning and coordinating to executing. It had taken some time to actually come to this point, and Cusati strongly believed that the alliance had every reason to succeed: . . .