Resumen
J. C. Penney, one of Americas largest department stores, and Sephora U.S.A. Inc., an affiliate of the French cosmetics chain, entered into a partnership in 2006. The agreement allowed Sephora to exclusively operate cosmetics stores within J. C. Penney stores and to service J. C. Penney online customers through a link from J. C. Penney web-site to Sephora web-site. The purpose of this case study is to stimulate a critical evaluation of the decision by these companies to enter into a partnership instead of a merger or an acquisition. The case can be used as a tool to facilitate broader discussion of various corporate strategies and their relative merits and demerits. The accompanying teaching note refers the reader to an analytical framework that can be used to determine when to go for corporate partnerships instead of mergers or acquisitions and applies that framework to this case.