Undoubtedly, the power of a successful strategic alliance is exponential for both parties involved. The key word here is successful. Utilized properly, a strategic alliance takes revenues to the next level, but if the underlying fundamentals of a strategic alliance are not in line, then neither party will benefit.
Underlying fundamentals of a successful Strategic Alliance:
- Generating Value: To make a strategic alliance prosperous, it is important that what you “bring to the table” is valuable. Your partnership offer should be valuable to both you and your potential partner. The second underlying value factor of the offer should be your partner’s clients. This will generate sales from the partner’s customer base, which translates to profits for both of you.
- Appropriate Attitude: Remember, you deliver significant value to the strategic alliance. Without having to increase their production or staffing, your potential partner stands to gain a significant increase in revenues from your partnership. Thus, instead of approaching the proposal with trepidation, arrive with confidence and power.
- Cohesive Partnership: Even if the two companies have potential synergies, the commitment behind the strategic alliance must be present to reap the full rewards. It is important to ensure that the personal and management dynamics can create a cohesive partnership, where both businesses fully support the joint venture efforts. If there are conflicts in the beginning, or you sense reluctance, then the partnership may not be worth pursuing.
- Targeted Clients: It is ideal for your partnership to have client synergies, but not all of their customers will be perfectly in line with your target audience. Therefore, it’s important to develop lists that are specifically targeted to your clientele, whether it’s the discount shopping mom or high-tech bachelor. Specify the demographic details of your client base and work with your partner to target those specifics.
- Strategic Management: Like any business relationship, a strategic alliance must be managed and maintained properly. Left alone, the partnership will not reach its highest profitability potential. You should maintain regular communication with your partner, continuously re-evaluating the power of your offer. The more effort you place into partnership management, the more rewards you will receive from the relationship.
Remember, your strategic alliance is a relationship, and thus, you should expect negotiation, compromise, and maintenance. However, once the underlying characteristics are in place, reaping the benefits of a strategic alliance is certainly worth the effort.