One of the fastest growing trends for business today is the increasing number of strategic alliances. According to Booz-Allen & Hamilton, strategic alliances are sweeping through nearly every industry and are becoming an essential driver of superior growth. Alliances range in scope from an informal business relationship based on a simple contract to a joint venture agreement.
For us small businesses, strategic alliances are a way to work together with others towards a common goal while not losing individuality. Alliances are a way of reaping the rewards of team effort - and the gains from forming strategic alliances appear to be substantial. Companies participating in alliances report that at much as 18 percent of their revenues comes from their alliances.
But it isn't just profit that is motivating this increase in alliances. Other factors include
an increasing intensity of competition and saving hundreds if not thousands of dollars in marketing captial. Why? Because your alliance is referring you business.
A strategic alliance is essentially a partnership (verbal or affiliated agreement) in which you combine efforts in projects ranging from getting a better price on services to building better products/services together with each of you providing part of its production. The goal of alliances is to minimize risk while maximizing your marketing position and profits.
An alliance is simply a business-to-business collaboration. Another term that is frequently used in conjunction with alliances is establishing a business network, a Community! Alliances are formed for joint marketing, joint sales or distribution, joint production, design collaboration, technology licensing, and research and development. Relationships can be vertical between a vendor and a customer, horizontal between vendors, local, or global.
Businesses use strategic alliances to:
- achieve advantages of sales, scope of work and relationships that are trusted, reliable
- increase market penetration
- enhance competitiveness
- enhance product & service development
- develop new business opportunities through new products and services
- expand market development
- create new businesses
- reduce cost
Strategic alliances are becoming a more and more common tool for expanding the reach of your company without committing yourself to expensive internal expansions beyond your core business.
