What do you mean by strategic alliance .how do you implement successful alliance?
Strategic alliances are among my favorite topics to write about. They can add so much value and growth to a company. In this knowledge base I share what I have learned in my experiences with strategic alliances. Show
What is a strategic alliance?A strategic alliance is not just another partnership. It does not solely focus on collaboration, but per definition is focussed on the long term. Partners will contribute part of their resources to realize the success and will in exchange receive part of the control and benefits from the alliance. The definition of a strategic alliance is: Since strategic alliances are about joining forces for the long run, it is an ideal strategy to make your company future proof and resistant to fluctuations on the
market. Are they part of your strategy?When it comes to business strategy, alliances are often part of the execution approach. Rightfully so, establishing alliances is an essential way to grow the company more efficient and effectively. It is however essential to establish a clear alliance strategy. How about your organization, do you have a clear alliance strategy? How to stay clear from the high failure rate?If carried out thoroughly, strategic alliances are a great tool to grow your organization. Yet, we see a high failure rate when it comes to alliances. To stay clear from this disappointment, there are many things you can do. The most important thing to do is build your skills. Read about alliance success and failures and apply these lessons. There are some excellent books out there, but to start you can also look into the blogposts listed below.
Strategic alliances should are mutually beneficial relationships designed to help both parties reach growth objectives. For many companies growth is key to success. Strategic alliances can provide the means to create additional leverage in the market. Achieving growth on your own can be a Herculean task. There are a number of alternatives to going solo to achieve growth. Mergers and acquisitions are one route. An alternative option is to collaborate through a strategic alliance to grow. United States chief executives believe that the new years will be more critical for their industries than the past 50. These executive are pursuing growth strategies that call for increased partnerships and alliances. The challenge however is the high failure rate for strategic alliances, which can 40% or more. It’s important to be very deliberate in exploring strategic alliances. Yes, I Want My Growth Idea Strategic Alliances: An Alternative Path to GrowthStrategic alliances are not necessarily the same as a channel or partner relationship where a company contracts another firm to bring its products/services to market. A strategic alliance is a cooperative agreement between business firms for mutual benefit. A good strategic alliance is generally between two or more parties of equal position that provide complementary expertise to each other. Most strategic alliances are formed to increase access to a market or technology, to improve economies of scale, to bring a new product/service to market faster, and to spread the risk. Strategic alliances often take the form of licensing agreements, joint ventures, R&D agreements, etc. When a company wants to stay involved in a business but needs to gain scale to compete, a strategic alliance may be a better move than a merger or acquisition. Alliances are also a useful way to reduce exposure from or investment in non-core or commoditizing parts of the value chain. In some cases, these alliances will take the form of outsourcing and offshoring arrangements. Others will create new customer-supplier relationships by helping customers to shed non-core assets and suppliers to increase scale. As companies outsource their more complex activities, they will resort to more complex kinds of financing, to joint ventures with buyout options, and to other creative partnership structures that mitigate risk. Forming alliances with complementary businesses can expand your company’s scope and capabilities. In some cases, the alliances your form last the lifetime of the respective companies. Other times, you may establish an alliances for a short term outcome. Before jumping into a merger acquisition scenario, consider a strategic alliance as a path to growth. Considerations, Questions and Tips for Establishing Successful Strategic AlliancesThe right partner increases your chances of success. Be sure to identify the strategic and cultural similarities, review your prospective alliance partners financial fitness, systems and processes, and its research and development track record as a part of your due diligence. To key considerations for any alliance:
These four questions are a good starting point for your internal discussion:
Employ these 6 tips for successful strategic alliances:
Move Your Alliance from Concept to RealityWhere do you begin to look for a potential partner? One of the first sources for identifying a potential alliance partner is your ecosystem. You’re ready to form a strategic alliance and you have a partner identified. First stop. Do Your Due Diligence. Start with identifying the potential partner’s strategic behaviors and objectives.
Your prospective partner passes muster. Next stop. Make the alliance explicit. Put it in writing and try whenever possible to develop terms and conditions that anticipate change. Define and document what each partner is expected to contribute. Establish at the start how the partnership will end. Consider the exit strategies at the onset and establish a variety of options. Treat the exit as a normal business process. One stop further. Establish a measurement process. Determine quantifiable criteria for success and how this criteria will be measured. We suggest that you set specific measurable goals for both the short term and long term. Be sure to establish a review process so plans can be revised as needed and the early warning indicators that something is amiss. Keep talking. Jointly define communication, marketing and promotional process. Decide in advance how joint marketing and communication efforts will be measured and funded. Define processes to disseminate best-practice knowledge and experience internally. Develop a plan to communicate the alliances both internally and externally at the beginning and along the way, especially as key milestones are achieved. For a strategic alliance to success it needs to be a part of your company culture. Implement partnership training that is relevant to your particular situation/company. Mapping your ecosystem is a crucial part of identifying potential alliance partners. Learn how, contact us. What is the key to the successful implementation of strategic alliances?To build successful strategic alliances, first identify the right partners, do the research, and then set shared objectives that are achievable for your partners.
Is strategic alliance successful?Despite their popularity, 60 to 70 percent of alliances fail, according to Jonathan Hughes and Jeff Weiss. Many partnerships don't completely fail but struggle along the way, never realising the expected benefits. Very few companies build alliances consistently well and achieve their business plans.
What does the term strategic alliance mean?Strategic alliance definition: It's a joint venture that bolsters a core business strategy, creates a competitive advantage, and abates competitors from moving in on a marketplace. It allows individual companies to achieve more together than they would have on their own.
What is strategic alliance and why?Strategic alliances are when two or more businesses enter into an agreement to work together toward a common goal, while still remaining independent. This type of partnership enables you to pool resources, leverage your combined expertise, and go further as a team than either of you could go alone.
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