Profitable Strategic Partnerships

The longest lasting and profitable strategic partnerships are those in which each company brings something to the table that the other company lacks. There are certain situations in which it simply makes sense to form a strategic partnership. For instance:

- Partner when one business lacks wide access to the market, and the other partner has a large customer base or access to the market, but needs more products or services to bring to its customers. A great example of this is the partnership between IBM and Microsoft. Microsoft offered a great product, but had no market reach; IBM had reach, but needed the innovative software that Microsoft had created.

- Partner when one business is highly specialized or has a strong niche skill. Large businesses often outsource to smaller businesses that specialize in certain areas.

- Partner when trying to break into a new market, while keeping costs contained. - Partner in government contracting situations in order to win the contract. A larger company may partner with a smaller enterprise in order to qualify for certain contracts that are reserved for minority-owned businesses or small businesses. Sometimes the smaller company will need the resources of the larger business in order to adequately fulfill the government contract requirements.

Also, consider partnerships when there is a need to get to the market rapidly. By focusing on your core competencies, weighing the option of creating a product or service versus finding someone who already offers the same thing, and thinking win-win, you can bring a potential opportunity for partnership to a company with whom you would like to work. Keep in mind that you need to think about how all the parties in a partnership benefit, not just your company. If you are only out for yourself, your partnership will fail.

A strategic partnership can also take the form of finding profit by cutting costs. For instance, two small businesses might find a way to reduce rent by sharing space in a warehouse or office complex. Or perhaps you can share the cost of a database subscription or business group membership with a strategic partner to help you both defray the costs. Small businesses can also lease space from larger businesses. One woman runs her small coffee shop out of a local gas station. Her lease monies were more than the retail profits that were being generated by the few items that were selling in the space. She had a steady stream of clientele. Both businesses found the arrangement profitable.

Think ahead when looking to develop profitable strategic partnerships. You can look to increase market share. You can reduce costs and keep more money in your pocket. You can partner with large or small firms. Whatever you decide, it's in your best interest to keep your potential partner's best interest first and foremost in your mind's eye. By thinking ahead, and seeing the world of opportunity, you'll be able to develop partnerships that create a better business environment for everyone involved.

Copyright (c) 2008 Christian Fea

Article Source: http://www.rightbiz.com

Christian Fea is CEO of Synertegic, Inc. A strategic Collaboration Marketing consulting firm. He empowers business owners to discover how to implement Integration, Alliance, and Joint Ventures marketing tactics to solve their specific business challenges. He demonstrates how you can create your own Collaboration Marketing Strategy to increase your new sales, conversation rates, and repeat business. He can be reached at christian@christianfea.com - www.christianfea.com

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