Alliances can be a great way to encourage some customer habits, get more customers, or keep them – but there will always be disadvantages and gains.
Product partnerships are where two companies partner together to enhance the product or service and they both win by gaining new customers and promoting the brand and generating revenues.
Shared vision
Strategic alliances can enable your business to reach new heights unmet on its own. They can exist for various reasons, such as sharing risks and pooling resources; creating brand awareness by reaching a larger audience. Yet collaborations need to be strategically developed and stewarded to be productive.
A common purpose is the cornerstone of any successful partnership. This is when two leaders align their personal objectives with a unified, grandiose end point like an idealistic future state or vision and the whole organization is working on this for realizing it.
During negotiations, negotiators should be transparent about objectives and definitions of success, otherwise areas of disagreement such as conflict over funds or decision-making powers could sour the deal. Also, it’s better to avoid misunderstanding that will cost partnership advantages on both sides.
Shared goals
A good business relationship can bring opportunities to access markets and gain a competitive advantage, develop customer relationships and generate higher sales/revenue. But it’s vital that when they choose partners, they establish clear targets so that you don’t lose time and money in ineffective relationships.
As you are scaling up, you must find the right partners and analyze them on the basis of potentials. You can do this by taking into account factors such as their small business reputation, history in providing value-added services to similar clients, technology abilities, and cultural values fit.
In order to keep your partnership effective, check it relationship and performance often. It will allow you to pinpoint where you can improve and make adjustments accordingly. Also ensure sharing of knowledge by making channels for communication readily accessible and promoting an atmosphere of openness and confidence among the partners.
Shared resources
Every company has business partnerships and strategically buy tools, resources and expertise they do not have themselves. It will save money and give you some productive competition in your niche market, but those things should work for both parties if they’re to be effective – otherwise they’ll leave both partners forever damaged, even destroyed, from a reputation perspective.
Good governance is crucial for thriving strategic collaborations. Leaders of both partners’ line companies must be involved early on in the negotiation process; this will give operational leaders and alliance managers an umbrella across which to look for information regarding the purpose, scope, and leadership model of the partnership.
This will also reduce chance of miscommunications between parties; other companies’ language and culture can inhibit a good alignment between the organizations so they need to assign a deal sponsor to serve as a mediator between both.
Shared expertise
Strategic alliances allow businesses to acquire the new technologies and expertise without the cost of establishing in-house R&D teams. The firms who do reap the rewards of growing products and client base. They may be joint ventures or long-term supply agreements.
The challenge of cooperation is that it is not static – it changes with market need, new competitors, geographical or regulatory barriers. Partner should therefore be aware of this dynamic and plan accordingly.
One of the strategies involves a good partnership management team. Such a team could manage conversations and work across partners, uncover problems early, and drive priority objectives – this might include building responsibility maps or process diagrams or tightening reporting standards; businesses could also adopt project-stage gates to more accurately set expectations and timelines; such systems could deal with barriers of proprietary knowledge isolation, multidirectional knowledge streams and adaptive governance frameworks.