In today’s society is there really a secret formula to building a successful company? Nowadays companies have to be transparent and there is no such thing as secrets in the business world. Therefore, a huge amount of the “secret formula” in today’s business is in collaboration! This in many situations means for companies to invite and be invited as a strategic partner.
You might ask what is so beneficial about business partnerships. Strategic business partnerships provide businesses with the opportunity to increase their customer base, and or use partnerships to strengthen weak aspects of their business. In both cases the plan should be to identify consumer’s wants and needs and find partners that can resolve them. Such opportunities are developed by identifying what your customers want from products and services and making strategic partners play a “thought leadership” role within your business, effectively adding the missing piece to the puzzle. Thus, partnerships for businesses create and give access to new products, reach of new markets, surpass competitors, and even increase customer loyalty.
So, what is it that makes an alliance truly strategic to a particular company? Here are five general criteria that differentiate strategic partnerships:
- Critical to the success of a core business goal or objective.
- Critical to the development or maintenance of a core competency or other source of competitive advantage.
- Blocks a competitive threat.
- Creates or maintains strategic choices for the firm.
- Mitigates a significant risk to the business.
The essential issue when developing a strategic partnership is to understand which of these criteria the other party views as strategic. If either partner misunderstands the other’s expectation of the alliance, it is likely to fall apart.
Regardless of the industry in which your business operates, having an ally on your side in the form of a strategic partner will benefit your company. A strategic partnership or an alliance will give you a competitive advantage and an opportunity to access a broader range of resources and expertise. This means that the partnership can offer clients distinctive skill sets and product lines that are different from the competition. Successful partnerships and alliances rely on the principle that the work involved in maintaining a partnership, and the benefits from the alliance are equally spread, rather than one partner carrying the load whilst the other reaps the benefits.
When entering into a strategic partnership or alliance, there is a lot to consider, however keeping the following tips in mind will help you on your journey:
- Focus on Outcomes. It is important to know what you can, and are prepared to deliver, and what you would like in return from your potential partner. Approaching a partner without a clear plan can cause them to lose interest.
- Commitment. The level of commitment required from each party needs to be considered. The nature of your business and that of the partnership or alliance will determine how much each party needs to give in order to keep the partnership or alliance healthy.
- Collaboration. The extent to which you will be happy to share resources with partners will need to be considered. Generally, the more collaborative the partnership or alliance, the more successful the endeavor is. However, it is also important to keep in mind that you are not merging with the partner organization, rather you are forming an alliance and so total sharing of resources is not necessary.
- Communication. An emphasis on effective communication between partners is essential. Open and effective channels of communication between members of the partnership or alliance will ensure that there are no misaligned expectations between the parties.
One thing that is imperative in creating successful partnerships is a shared vision and enthusiasm. Remember, that not every detail of operations can be planned for, and the success of the endeavor will depend on the amount of trust and communication between the parties.
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