Primary File

Theranos, Inc.: Managing Risk in a High-Flying Biotech Start-Up

Kelley, C., Lee, S., Shields, V., O’Rourke, J. S. (editor)
January 22, 2018
North America
Strategy & General Management, Human Resources & Organizational Behavior
15 pages
Brand Management, corporate cluture, crisis management, customer communication, entrepreneurship, healthcare, investor relations, media relations, reputation management
Student Price: 
$4.00 (€3.62)
Average rating: 
Theranos became one of the most exciting start-ups in Silicon Valley when it introduced a simplified blood testing method that had the potential to help countless people. However, a 2015 Wall Street Journal article changed everything. Suddenly, Theranos went from being viewed with praise to suspicion.



First, this company is the subject of two forthcoming documentaries, and Jennifer Lawrence has signed on to play the CEO Elizabeth Holmes in the movie adaptation of the best selling book Bad Blood. This is all to say: we have the students' attention on this one!!!

An incredible story that is only going to become more prominent in cultural conscience over the next few years, so it makes sense to adopt this case now in our teaching. There are several viable themes, but as a marketing prof I'll say the most likely candidates for me personally would be creating and delivering value (or not...), public relations, entrepreneurship, and ethics.

I ended up wanted to go an even more specific direction for the MBA decision making elective I am currently teaching, but I would certainly come back to this case for a more general overview of Theranos next time I teach my core course. In particular, I recommend pairing this with a discussion on the WSJ article "Craving Growth, Walgreens Dismissed Its Doubts About Theranos." I plan to use that supplement to illustrate bounded awareness and further probe the decision making process why Walgreen's was so desperate for this cobranding opportunity they failed to conduct due diligence. I also recommend integrating documentary video clips as they come out--Nightline has released a short excerpt of their upcoming documentary and I am thinking that priming students with that clip (~12 minutes) will get them super interested to read this case.