No man is an island —
While you may be bravely striding down the path of managing and growing your businesses, there may come a time when you need to form strategic alliances for your business.
Given the current state of business today, competitive pressures are forcing companies to come-up with imaginative ways to enhance brand identity, connect with customers and attract top-notch employees. Companies, both big and small, are teaming up more today than ever before to enhance their competitiveness in the marketplace and keep pace with the rapid changes of technological innovation. More than 20,000 corporate alliances have been formed worldwide over the past two years. According to studies by Booz, Allen & Hamilton, the number of alliances in the United States has grown by 25 percent each year since 1987.
A strategic alliance is an arrangement between two companies that combine resources to gain additional business. Strategic alliances are formed when one company alone cannot fill the gap in serving the needs of the marketplace. It involves two companies that pool together expertise and resources to enter new markets, share financial risks and get products and services to market faster.
Some strategic alliances are formal written agreements; others are informal as a handshake. With the Internet, some alliances are entered into after several email exchanges, even without the physical meeting of the parties concerned. Some alliances involve sharing of resources and an exchange of funds; or sharing of traffic between two dot.coms; others are as simple as a cooperative marketing arrangement. Whatever their structure, one goal prevails: strategic alliances are opportunities for small businesses to accomplish things that would otherwise take much more money or staff time.
Small business owners, with their limited resources and marketing reach, could benefit from cooperative arrangements with other organization and business entities. Joining forces with another organization can allow your business to finance certain services or production functions by sharing expertise, assets, expenses, and risk without necessarily incurring cash debt or trading equity. For small businesses, strategic alliances often consist of simple “bartering” with customers, suppliers, and even competitors.
Here are several ways that you can collaborate with another person or company to bring added value, revenue, traffic and/or expertise into your business.
