A strategic alliance for your business can be a difficult bridge to cross, but when done correctly they can be a considerably beneficial method to expand 

But of course, not all alliances can be classed as strategic! Before pursuing a business partnership, organisations should put considerable research and identify businesses that offer different yet complementary services to their own. Without this foundation, an alliance can seem overwhelming and rather than building a business, damage it considerably. 

So, in today’s blog, I’ll be taking you through how to identify the right kind of business to partner with, alongside highlighting the benefits of a strategic alliance. 

What is a strategic alliance for your business?

A strategic alliance is an arrangement between two companies to form a mutually beneficial relationship whilst each retains its independence. One would not dissolve into the other as might be expected with a joint venture where the two parties create one business entity. 

Instead, the focus is on each value adding value to the other over what may be a long or short term commitment, which could be formal or informal depending on the complexity of the arrangement. As a result of a strategic alliance, those involved can expect to expand into a new market, improve product lines or gain an edge over competitors. 

The benefits of forming a business relationship

So, what exactly are the benefits of forming a strategic alliance? It goes a step beyond a general business relationship and allows both parties involved to achieve far more than they would have independently. Strategic partnerships require careful consideration and thorough research, without this they may struggle to get off the ground. 

#1 A new client base and competitive skills

When seeking a partner to form an alliance with, the key is to search for one with a strong speciality reputation to further the firm’s skill set and create a force that offers the total package. Your business will quickly gain new skills, resulting in a competitive edge without the difficulties of recruiting, paying nor training new staff. 

#2 Expand to new territories

Forming a strategic alliance for your business with an organisation outside your geographic marketplace allows you to enter a new territory with far less risk and uncertainty. Expansion is a serious learning curve and therefore, partnering with those with a well-established reputation in a particular area can quickly advance your business too. Instead of fear and concern being your priority, you can focus on delivering a compelling, complete package for this new territory. 

#3 Additional income

Rather than outsourcing or duplicating workloads, the business can grow as you gain additional resources and have access to another perspective. Ultimately, you can improve your business with relative ease as you concentrate on internal improvements rather than stretching yourself thin. 

#4 Reduce risk

Perhaps the most important! You can keep doing what you do best – it’s impossible to be everything for everyone yet this is what many businesses hope to achieve. But, by creating a strategic alliance we can come far closer to this, offering clients a fully rounded experience with additional services and resources on hand. 

You can significantly lower the risk of trying to offer more to your target audience, utilising expertise and experience in another business area. As a result, you’ll be able to deliver a high-quality service or product to a new demographic without incurring potentially business-threatening consequences. 

#5 Gain a competitive edge

A new alliance is an exciting venture and should certainly be utilised in your marketing! By forming a partnership, you’ll have an opportunity to entice customers with this news – fascinating your clients with what the future holds. Competitors will see you as a formidable force as you leap ahead – however, it’s important to remember this partnership needs to last into the future so should have the potential to develop over time to remain relevant. 

#6 Build a new perception

If you are a long-established business, many external observers may have built a perception of your offerings – perhaps that you specialise in a narrow field. By entering into a successful alliance with a well-established firm in another field, you can expand your offerings and thereby change the perception of your business. Of course, it’s crucial you remain true to your brand but, development requires you to change how you portray your organisation. 

strategic alliance for your business

Mutually beneficial

Both parties involved should mutually benefit from a strategic alliance for your business. When identifying whether or not to partner with a business, it is the most important consideration. Ask yourself, where do you add value to each other? Without this knowledge, only one of you may be seen to be reaping the benefits listed above. Remember, it’s also a team effort so both parties involved should be actively engaged in assisting one another. 

Who should you partner with? 

First and foremost, one of the most important things to keep in mind is not what your strategic partner can do for you but what you can do for the partnership. Remember, if both parties aren’t benefiting from the relationship, it’s likely to diminish over time resulting in a damaged business reputation. 

They should therefore be approached with caution; it’s human nature to focus on self-interest and both parties need to overcome this to form a strategic alliance that can last the test of time. So, you should be on the lookout for a similar organisation that serves a different market allowing you to successfully benefit together in the long term – consider asking yourself:

  • Is the alliance critical to a core business goal?
  • Will it provide a competitive edge and block a threat?
  • Is it mitigating significant risk to the business?

Whilst it’s impossible to say exactly who you should partner with, if you can focus on the unique aspects of your business and recognise potential opportunities, you can stand out from your competitors in the market. Of course, there will always be certain challenges to overcome. These tend to include:

  • The ability to meet performance expectations: Is your partner able to produce at the time and speed you are expecting, at a cost and efficacy that is attractive to you? 
  • Maintaining clear goals: Costs, deadlines, roadmaps and responsibilities should be clearly laid out prior to an agreement to ensure both parties have their needs fulfilled and the strategic alliance is serving. 
  • Compatibility and commitment: Ultimately the most crucial aspect is how the relationship will continue to develop in the future. Both parties should feel they are benefiting from the partnership and can maintain this. 

Are there challenges in a strategic alliance for your business?

As we’ve already touched upon, there will always be challenges to overcome when building an alliance that serves both parties involved. And, even more so as the partnership develops and grows – it can be difficult maintaining a solid relationship should your visions run off course. Communication is crucial to the overall success of a strategic partnership and should be prioritized to ensure both of you understand where the other is currently at. Plus, regularly scheduling meetings and catch-ups will open up the floor to new ideas and opportunities. There may come a point when the alliance no longer serves either party involved and then, this should be carefully handled to ensure neither business suffers from a damaged reputation should the partnership no longer be viable. 

It’s clear to see that strategic alliances can be highly beneficial for those involved. It’s an opportunity few businesses choose to explore and as a result, they may be missing out on gaining a crucial competitive advantage. However, should a business take the time to conduct thorough research into a business relationship, they can reap significant rewards. The key is to focus on what it is you as an organisation can offer rather than only considering what the other potential party can do for you. Remember, it’s a two way street! If you fail to showcase the value you can add, you may find yourself in a non-serving partnership or short-term alliance. 

Are you looking to build a partnership with another business but aren’t sure where to begin? Growing your organisation can be a difficult process, particularly if you lack the know-how, experience or even time to do so! With over 30 years in sales and marketing, I can transform your business into one that is thriving and successfully growing – whether you choose to expand with an alliance or not. Click here to discover more about what I do, or click here to get in touch today and discuss how I can help you and your business grow.

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