Although the ride-share app, Uber, has experienced some poor press lately, the company definitely has the right idea when it comes to spotting a fantastic collaboration opportunity. Spotify, a music streaming app, and Uber have recently dialed into a working strategic alliance. Uber riders who use the Spotify app can now control the music played in the vehicle they are a passenger in while in transit via the mobile app. This is a great example of a strategic alliance. It’s no doubt that an Uber rider learning of this new feature is more likely to download the Spotify application and vice versa.
A 2016 study found that nearly 60% of CEOs in the United States were in the planning stages of establishing a strategic alliance. This number sky-rocketed up from a mere 19% on the previous year. What is so beneficial in these alliances that have companies, corporations, and small businesses flocking to the idea of partnering up? How are partnerships identified and in what ways can you ensure they are successful? If you’re looking for the answer to these questions and more, look no further!
THE BENEFITS OF STRATEGIC ALLIANCES
By identifying the appropriate business collaboration which reflects your brand values and objectives, your business can benefit significantly from strategic alliances.
• Customer base can immediately expand
• Overall business networks can immediately expand
• Marketing efforts and costs can be shared
• Strengthen your expert credibility
• Develop thought collaboration with trusted outside advisors
• Save money on expenses by splitting costs
• Gain an expertise in an area you may not be proficient in
• Leverage on assets you don’t own
THE WEAKNESSES OF STRATEGIC ALLIANCES
With the many benefits that come with strategic alliances, it is no surprise that your company may experience potential downfalls from such collaborations. These weaknesses can be avoided if your company is able to prepare for them in advance by being transparent and addressing potential weaknesses with the partnering company before the official alliance is formed.
• One party may invest more time and energy into the partnership than the other
• Loss of control due to personality conflicts or changing values
• Lack of proper preparation and planning and/or written agreements can result in false expectations which weaken ability to succeed as a joint venture
• Their negative PR can become yours
• Evaluation tools are not put in place, so win/in balance is not met
HOW TO GET STARTED
If you are new to the idea of implementing a strategic alliance into your business and are not sure where to start, there are easy ways to get your feet wet while not committing to anything too formal at first. Here’s a few examples of how joint collaborations, no matter how big or small, can leverage from each other.
• Co-brand promotional items
• Co-author presentations
• Share booth space at events/trade shows; travel to events together
• Share ad and marketing space
• Re-direct web traffic to each other’s websites and social media
• Work together on sharing referrals
• Develop “preferred supplier” relations
IDENTIFYING POTENTIAL STRATEGIC ALLIANCES
Strategic alliances aren’t limited to big box and large corporations, small business and sole proprietors alike can partake in this age-old business practice of joining forces for mutual gain. Forming strategic alliances is no doubt a complex process. Here are some tips for sourcing them:
Tip 1: Network
Unless you are already very well known in your industry and in touch with the various demographics of your community and other industries, you need to continue networking to better understand potential opportunities for partnerships. Go the extra step by asking people in your networks for ways in which you can support them. In fact, this gesture can go a long way. For example, perhaps you meet someone who is hosting an upcoming event and your company just so happens to be able to help promote it because it fits in with one of your core objectives. Or even simpler, perhaps you can help source an event speaker due to someone pulling out at the last minute. No matter the value you can provide, it’s a great gesture to show you care about creating genuine relationships.
Tip 2: Understand Your Options for Prospective Partners
Those you already know and trust: The first type of prospective partners are those that you already know and trust. By proposing a win-win partnership to someone you already have a professional relationship or collaboration with, you can avoid the various risks involved when developing a brand new relationship.
Those who you are acquainted with: Prospective partners who don’t know you, but who are acquainted with you, may take a bit more effort but will require less risk than starting a partnership from the ground-up. Consider people you have met or connected with or perhaps even someone who you were introduced to.
Those who have no knowledge of you: The last type of prospective partners is those who do not know you at all or perhaps are not familiar with your company. Maybe you found them through an internet search and believe you could both provide value and serve a perfect fit. These type of partnerships are just as worthwhile as the other two, however just be aware that they are often the most difficult partner to secure.
Tip 3: Identify the characteristics of your ‘dream’ partner
Think back to ‘Tip 2’ and when thinking back to potential partners that you already know and trust, go a step further by identifying the exact characteristics and qualities that make you feel positive emotions toward them. Do they have a track record of practicing good ethics and integrity? Will they likely offer you the highest probability of success? Do your research and understand your perspective partner inside and out. For the characteristics you don’t know, ask questions so you can determine a “score card” for evaluating what qualifies as an ideal fit.
TIPS FOR SUCCESS
Partake in a strategic planning process. First and foremost, you can only set up a successful partnership if you and the partner understand each other’s vision, strategies, and goals. This can be done through a strategic planning process. While it may be that each partner does not have a mere identical business goal, it is vital for both parties to be committed to a common outcome. In order to avoid one partner living up to the expectations, and the other falling short, it’s important to be honest about your specific goals from the get-go. Be open about what you can provide to the relationship and what you hope to gain from it. One of the most common mistakes of any joint business venture, big or small, is the failure to clearly articulate the value proposition of the alliance.
Open and ongoing communication. Develop a project plan for ongoing communication processes. Consider factors such as, who is responsible for what tasks? Understand agreed on priorities and plans. Keep all lines of communication open and tailor your communication process based on your type of partnership. For example, weekly or monthly phone or in-person meetings may be beneficial to stay on track of identified goals.
Ensure all activities provide a win/win for both parties. As basic as this sounds, it is vital to only continue a partnership if you are receiving benefits from it while also providing benefits to your partner. The goals you identified at the beginning of your partnership should be re-evaluated regularly in order to measure the success of the partnership.
Develop deep contacts with more than one contact at the company. In other words, what would happen if your go-to guy at “x company” unexpectedly left? How would you pick up the pieces? If you have more of an informal partnership, it is still important that you have deep connections with more than one individual in that partnership.
One size doesn’t fit all
Maybe you have an informal partnership and you’re ‘winning’ and so is your ‘partner’! Congratulations, you are reaping the benefits and value that is to be delivered in a successful alliance. This is great news and is an indicator that perhaps your partnership has what it takes to flourish on a long-term or more formal basis. This could be due to the fact that you took it slow in the first place and didn’t jump into a formal joint venture. Perhaps you’d prefer to keep it this way or maybe you would like to discuss bigger plans for partnership? Remember that there is no one-size-fits-all in successful strategic alliances. Some start just as informal collaborations, while others hit the ground running with a formal alliance. It’s all comes down to tailoring your needs and desired outcomes with that of the company you are collaborating with.
Strategic alliances have the capability of catapulting your business to new heights if executed with diligent care, preparation, execution, and evaluation. The application of a well-developed strategic alliance strategy can stand the test of time and allow you and your partner to reap benefits that can last a lifetime.
Still not sure if business collaborations are successful for your company? Contact 10twelve today for a brief consultation.