Partnering With Promise

Partnering With Promise

Leadership | Posted by - June 21, 2016 at 12:30 am

Have you ever thought about partnering with another business to accomplish something you might not be able to do on your own? If you join forces with a partner to achieve a common goal, such as blocking a competitive threat or even helping each other with a specific set of skills or resources, you have formed a strategic alliance.

For example, you might run a start-up that has ample manufacturing facilities, but have not yet established a distribution network in your area. Another local business may have a strong distribution network, but is looking to expand their product line and needs more manufacturing space. Because you are not direct competitors, you decide to team up and share these resources with each other, thereby saving time and effort.

There are a number of reasons you might consider a strategic alliance; it depends on your current goals and capabilities. When it comes to business ventures, a true strategic alliance should give both you and your partner a competitive edge, by allowing you to:

  • Enter new markets
  • Access new technology
  • Share the costs of R&D, equipment, or operations
  • Increase your range of products and services
  • Improve productivity (economies of scale)

The potential gains of an alliance are great; however, you may face certain challenges when working with another business, particularly if no official partnership is established. You want to choose a partner that is a good fit for your business, and vice-versa. To avoid potential conflicts, consider discussing the following:

  • What are we trying to accomplish? Look at your motivations and expectations.
  • Will this alliance help us both, or is one of us risking a negative effect on our market position?
  • What kind of an agreement do we want, and how formal should it be?
  • How long do we want the partnership to last?

By doing your due diligence, you ensure that the objectives of the alliance are clearly laid out and potential conflicts are minimized. You might even consider a trial period, and make adjustments as needed.

For more on business partnerships, see our blogs "Achieving success through collaboration" and "Coopetition: The better-together approach".

Tags: access market potential, business finances, business partnerships, common goals, important skills, partnership

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