Daily, more organizations are looking toward partnering strategies to assist in global competitiveness. Business executives are realizing that their companies can no longer go it alone. Many are achieving business success and growth through methodical and strategic planning. Three important reasons for you to consider adopting the development of strategic alliances in your strategic plan are:
1. Increase in Technological Sophistication
2. Improvement in Training
3. Accelerate Your Innovation Process
An exchange of technology to compliment your core strengths shores up your core weakness and improves production capabilities to better serve customers. An example of this type of alliance is the alliance of Kinko’s Service Corp. (copy centers) and Xerox Engineering Systems to establish a nationwide network for faxing large-format documents. This service was especially valuable to architects, contractors and advertising agencies before file transfer protocol became practical. Kinko’s gets a revenue boost and Xerox gets additional placement and unit sales.
Technical hotlines and on-site technical support are regularly available from suppliers with whom you’ve developed alliances. While much of this has been outsourced to India over the years, this type of alliance can overcome the cost benefit in outsourcing offshore.
To receive a technological contribution or possibly a technological edge in your industry like the alliance between IBM and Apple to develop a new computer operating system that allows both hardware formats to communicate, or like Nynex Corp. and Philips Electronics who joined to develop screen telephones for residential use.
Learning curve commitment. Cost savings are passed along as experience is gained in producing a new product, and discounts are available on start-up products to encourage early sales.
Better sales and technical training for your employees is an important benefit in partnering with your suppliers. More manufacturers and distributors are developing training programs for dealers.
Guggenheim Dental, a dental supply distributor in Southern California is now regularly offering training programs for their top customers. Recently, at a seminar I delivered for the National Nutritional Foods Association, I suggested to the retailers that they only buy their nutritional supplements from suppliers that offer training DVDs. This is an added benefit in the seller/buyer relationship.
The computer and electronics industries have profited greatly from alliance relationships. Innovation has become commonplace for firms that have chosen to work together. The University of Toronto’s Innovations Foundation signed an agreement with Northway Explorations Ltd. and Polyphalt, a private Ontario, Canada company, to deliver polymer-modified asphalt materials technology for longer lasting roads to the commercial market.
To differentiate oneself from the competition. Steelcase’s alliance with Peerless Lighting, located in Berkeley, California, offers state-of-the-art office lighting. The relationship has brought Steelcase an additional $15 to $35 million in annual furniture sales. Also, they received additional dollars from the light fixture billings.
A term that is appearing in some business publications, Open Innovation really means innovation through partnering. Open innovation refers to companies admitting they do not have all the answers and are now considering strategic alliances with other companies to access their proprietorial or intellectual properties to use in new ideas for their own company. While this is simply a new name for strategic alliance, the system has been proven successful for decades. Finally, more organizations are getting on-board with the idea.
Technological sophistication, training and innovation are three of many reasons that you will want to have strategic alliances in your future strategic plans.
Ed Rigsbee, CSP, for over two decades has frequently been referred to as the Renaissance Man. He helps business individuals and organizations of all sizes to grow their market through smart alliance relationships. He is the founder and executive director of a non-profit public charity. He frequently publishes articles and blogs on personal relationship development. He administers a Facebook group; Relationship Glue and a Linkedin group; Member ROI for Associations & Societies.
Ed has served as adjunct professor for two California universities and is the author of Developing Strategic Alliances, PartnerShift-How to Profit from the Partnering Trend, and The Art of Partnering. He has over 1,500 hard-copy published articles to his credit and is a regular keynote speaker at corporate and trade association conferences teaching North America how to access their Collaborative Advantage.
He shares his proprietary Member Value Process globally with trade associations and professional societies-the corner stone for grass roots member recruitment and retention campaigns.