The Value of Strategic Business Partnerships
As With Any Business Partnership: The Goal is Growth
In a business and personal world that is constantly dynamic, partnerships have gained popularity over the last couple of years. However, a
The strategic agreements can include partnerships with other entities to help contribute towards the overall growth of the joint project. This benefit is the fundamental reason that has encouraged more businesses to explore
Evaluating the Value of Business Partnerships
Any partnership that meets the following guide points should be considered strategic and should be managed accordingly for the purposes of guiding the company forward. Some of the checkpoints that should be considered include:
- The projected value added should be essential to the overall success of the goals and objectives that have been set by the company. This should be treated as an intellectual property that should guide the firm onwards and upwards.
- The partnership needs to offer a competitive advantage to the firm.
- The partnership should be in a position to block competitive threats that are brought by other firms offering similar products or services.
- The partnership should create an environment of collaboration and creative problem-solving. This will help you find the best solutions.
- The partnership should have the ability to mitigate risks in a manner that is in the best interest of all parties involved.
It is important to consider the major issues that are most essential to a business when developing the partnership between the companies or other existing joint ventures. In the event that either of the partners has a wrong understanding of the expectation of the other partner for the partnership, then this will be a huge source of concern. This is especially the case when there are legal consequences for the aspects that cannot be solved amicably by the parties outside of the legal framework. For instance, if one of the partners has a belief that all the others are only looking to generate revenues from the partnership to their exclusion, then obviously this will lead to the fall and collapse of such a partnership.
You Want a Market Advantage
The most common types of partnerships have the primary objective of offering a market advantage. The initial value of this relationship may not be obvious, but the participants will soon see that such an alliance would have a great and negative toll if it were to be terminated. The greatest value can come from a partnership where all the parties that are concerned are allowed to put in their thoughts and propose their idea of moving forward both on a short term and long term basis. For competitive advantage, the objectives that are core to the business have to be shared with all the other firms that seek the partnership. This is especially the case when it comes to learning partnerships. The company is required to come up with skills that are essential to its operations and ones that will offer little or completely no chance for future competition from other firms. This means that the cultures that are shared between the companies seeking the merged partnership need to be as closely similar as practically possible. This does not, however, mean that they have to produce the same products.
Block Your Competition
You should ensure that the partnership that has been formed is one that has the ability of blocking competitive threats on a long term basis. This can be well demonstrated when a volume partner is sourced from a market that is adjacent to the existing firm. This will have the effect of ensuring that there is no threat from the competitors on some of the most sought after factors. This has been clearly demonstrated by the partnership reached by airlines whereby routes are shared by the carriers. Through this strategy, the airlines have ensured that they remain competitive while at the same time making the desire profits. The management should be highly involved in how the partnerships are reached. This is because the executive sponsorship has been identified as one of the core and essential factors in making the partnerships that have been formed successful. A major reason that has often been cited for the lack of take-off by most alliances is the lack or minimal involvement of the management. The decision to create an partnership should not be left to a select few. Rather, all stakeholders should be involved in the entire process.