A strategic business partnership is an alliance between two firms or companies, with an arrangement between the companies to pool their resources for obtaining more business. Strategic partnerships are established when one company is unable to fill the void in catering to the needs of its specific market. Such a partnership involves two companies which decide to team up their ability and resources to enter new markets, share financial risks, and have their products and services released in the market.
How can my small business benefit from a strategic partnership?
There are many benefits in partnerships for companies of all sizes. It is a proven fact that for many small businesses, the strategy of identifying the perfect partner has turned out to be the best proposition that ever happened to sustain and accelerate growth. Most small businesses find it difficult to implement their sales strategies to reach their targeted demographic segments due to lack of staff. A partner with the infrastructure and work team will do a great job of finding new customers and retaining existing ones. Joining hands with another organization can allow your business to finance certain services or manufacturing functions by sharing marketing, advertising, product development, branding, sales, human resources, and technology as well as their expertise, assets, expenses and risks without necessarily incurring debt. For small businesses, strategic alliances often consist of simple exchange of services or products with customers, suppliers, and at certain junctures, even with their competitors.
The major benefits can be classified as follows:
Small companies will be able get funds they need to grow
The most prominent advantage to small companies in an alliance with a larger company is the access to the co-marketing capital which may be established. The larger company, in turn, will look for its return on investment through funding and through marketing and popularizing the business and products of its smaller partner in a manner which the small business could not have afforded otherwise. In acquiring the alliance of such a partner, who is able to offer these benefits to the small company, the owner of the small business is able to fulfill the aims of his market strategy and extend their reach to new customers in a more cost-effective way than trying to capture business from new customers on their own.
The small business will be able to make use of a large sales force
A small business which comprises of few people will certainly not be able to market a product or service, even though it may use its full potential, to a large customer base. If the small business teams up with a company that possesses a marketing sales team which functions solely to promote the products or services of the partner, it can concentrate on creating innovative and quality products. The larger partner will take care of the marketing and sales of the products to the customers. Both companies should ensure, however, that the operations are well-coordinated and seamless, in offering the product to the client. The benefit here is a virtual boost in the arm to the small business.
Small businesses need to have a need and objective to build the alliance
It is obvious that a small business owner cannot enter a joint venture without an objective of achieving greater benefits and also offering the larger company a return for the investment. The small entrepreneur should evaluate what he is seeking in partnering with the larger firm. When a firm decision is reached and a goal is set, then one can go about searching for the appropriate partner who would help reach the goal. A very significant role of a strategic partnership is to increase the exposure of each partner in the market. Whether it is marketing support, or assistance in creating a brand identity, both partners will make their contributions to the general overall growth and progress. The rapport which these partners are able to maintain and mutually benefit from the alliance will determine the success of the partnership.
It is evident that almost every small business stands to gain something definitely positive impact with a larger company and a good partner. Hence such businesses would do well in keeping an open mind when larger companies approach them for business deals that can help the company grow and prosper beyond expectations.
A strategic business partnership is an alliance between two firms or companies, with an arrangement between them to pool their resources for obtaining more business. Strategic partnerships are established when one company is unable to fill the void in catering to the needs of its specific market. Such a partnership involves two companies which decide to team up their ability and resources to enter new markets, share financial risks, and have their products and services released in the market.