Building Complete Business and Marketing Solutions with Strategic Alliances

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In a blitz-paced technological marketplace going it alone, even for the most established company, is no longer a strategy for optimal success. Strategic alliances are gaining favor around the business world for both small and mega-sized companies who are finding that not all business solutions are born and reared in-house. Successful partnerships are proving that going it alone in a diverse and dynamic business environment may not be the best path to expanding reach in marketing, distribution, or human resources.  Benefits for organizations that join forces include increasing brand strength, attracting new demographics and improving a company’s credibility with new and untapped market segments.

More than 85 percent of companies say that partnerships are essential to their business growth, and more than half say mutually beneficial agreements have helped them acquire new customers and strengthen their brand. A strategic alliance or partnership between two companies comes in the form of a joint contractual relationship. Unlike a merger or joint venture, the partnership allows the participants to maintain their individual identities. Each partner agrees to share proprietary technology, intellectual resources, physical attributes or marketing collateral in order to advance shared goals without losing unique identities. 

According to Booz-Allen & Hamilton, “strategic alliances are sweeping through nearly every industry and are becoming an essential driver of superior growth. Companies participating in alliances report that at much as 18 percent of their revenues are derived from their alliances.” The relationship can produce advantages in scaling up the scope of an emerging business, increase new market penetration, allow for smaller organizations to initiate entry into global market space and reduce operating costs. Larger players can improve inroads into unique and diverse market segments and improve their brand’s reputation with these segments. Other unified ventures are extending the life of some marketers disrupted by the advance of technology on operations.

Barnes & Noble, a once powerful brick and mortar book retailer, found their very dominance and existence threatened by digital formatting of all things readable. Focusing on selling the reading experience, Barnes & Noble formed a strategic alliance with Starbucks, the popular coffee shop retailer. The move provides an opportunity for the book retailer to offer coffee kiosks or small coffee shops within their space, and gives Starbucks the opportunity to efficiently expand local community presence. Such an alliance can work for localized, small coffee shops as well.

To be successful, an alliance between two entities must be mutually beneficial to the goals and objectives of each participant. Clearly defined responsibilities and goals of each partner must be defined at the agreement’s outset. Each organization must be flexible in order to adapt to the impact of the alliance on the differences in each organization’s culture and operating methods. It is necessary in advance to identify what strengths each partner can bring to the new relationship and how each can build trust and respect for one another and their individual objectives   Most importantly, as with any strategic alliance or partnership, there must be benefit and value for both parties.