The definition of a strategic partnership is “a formal alliance between two commercial enterprises, usually formalized by one or more business contracts, but short of forming a legal partnership or, agency, or corporate affiliate relationship.”
Whew! Does it really have to be that hard? Absolutely not. You form strategic partnerships all the time without even realizing it. A strategic partnership simply takes the resources that a person or company has to offer and combines them with equally valuable, but differing resources in order to save time, money and energy.
The Easy Analogy of Strategic Partnerships
Have you ever borrowed something from someone? A power tool, a ladder, something you didn’t have, but didn’t necessarily want to spend your time and resources acquiring because you weren’t sure you would need to use it that often? Well, that’s a simplified form of a strategic alliance. The neighbor provided you with a resource you didn’t have or necessarily want to acquire based on the premise that you would reciprocate the favor in some fashion at a later time.
Typically, when two companies form a strategic partnership, each business has a particular asset the other company isn’t interested in spending time and energy developing. For example, manufacturing companies will form strategic alliances with designers and inventors. The manufacturer provides the raw materials, production costs, and distribution channels, while the inventor or designer provides creative and technical expertise. This is a win-win situation for both parties because it saves time and money, while allowing each party to focus on what they do best.
Finding a Strategic Partnership Balance
Strategic partnerships are often seen between companies who are in the same industry, but who are not in direct competition with one another. For instance, a small car dealership may develop a strategic alliance or partnership with a bank that offers auto financing. The dealer wins because he doesn’t need to be licensed for loans and the bank wins because they receive customers they did not have to actively solicit.
Think about service and product providers in your industry who are not in direct competition with your business. Who offers a product or service that could be beneficial to your business that you don’t have the time or resources to develop and what would be an area of your business that could be beneficial to their company?
In one example, a company that specialized in marketing strategies developed a strategic alliance with a design firm because they included collateral development as part of their service. The marketing company did not want to develop their own design department as they felt it wouldn’t be cost-effective given their strategic niche. The design firm on the other hand, often had customers looking for more comprehensive marketing strategies than what they offered. Obviously, this was a strategic partnership that worked well for both companies.
Take a look at your business and begin to think about areas that are not your focus, but for which you continually hear customer requests. Next, find a company that services that particular niche. You may need to “try out” a company or two before you find the right fit, but when you do, it will have been worth the time and effort.