7 Facts You Need to Know about Strategic Alliances

October 26, 2012

Strategic alliances aren’t just for professionals.

They occur in naturally and successfully by those least concerned about their professional image:

  1. Kids unite to get a parent (or both parents) to do something they want done (go to a movie, eat dessert first, stay up late, etc.); parents unite to guide their children to become responsible adults
  2. Animals and insects work together (ants and aphids; pets who want to go out, get food, etc.)
  3. Plants do it (clover-like plants and fungi barter nutrients)
  4. Plants and animals help each other (bees and hummingbirds work with flowers and everyone wins)

Look around and you’ll see alliances everywhere.

Strategic alliances between humans aren't new.

Just look at history:

  1. Wars involve more than the two combatants because those combatants form alliances with other countries or individuals
  2. Constitutions ditto (think Continental Congress)
  3. Bibles and books (including alliances between those who write, those who duplicate, and those who disseminate)
  4. Community improvements (programs such as Habitat for Humanity)
  5. Discoveries and inventions (vaccines, Airbus, telephones, Space X’s Dragon)

They have been around forever. Thousands are formed by businesses every year. Companies that use them report that 18% of their revenue is due specifically to their alliances.

Strategic alliances between businesses aren’t just about making sales.

They are about having a goal. That goal could be sales. But it also could be:

  1. Marketing
  2. Operations
  3. Funding
  4. Combination of any of the above (including sales)

Check to see if you’re making the most of your alliances.

Strategic alliances aren’t just about business.

They can be about business. But they are used probably more often for:

  1. Personal reasons (career advancement, friendship, personal gain, recognition, etc.)
  2. Political power
  3. Combination of reasons

Then, there are the strategic alliances that don’t happen during business hours that are formed around the water cooler or via the grapevine and social media.

Strategic alliances aren’t just for large businesses.

Governments create them internally and externally. Non-profits do, too. Small businesses use them to leverage opportunities to go after bigger customers, cost reductions, meet threats, or make their money go further. They can have a large return (sometimes as much as 18%). The successful ones:

  1. Create new assets; the key is to decide ahead of time how any new assets will be divided and protected.
  2. Have commonalities between the allies; too much difference in size or resources usually isn’t good

They can have a large cost:

  1. Company grapevine stirring up trouble; lost productivity
  2. 30-60% fail
  3. 1/3 have major problems that threaten the success of the alliance

Choose allies wisely and know when to say No if you’re chosen.

Strategic alliances don’t have to be forever and they don’t have to have a formal agreement.

They are better when there is a clear management plan that is spelled out. These can take different forms. Some of these are very structured and legally based; many are unstructured and based sometimes on a handshake or an implied agreement:

  1. Network (associations, memberships, affiliations)
  2. Partnerships and joint ventures
  3. Trading Partners
  4. Spider or serial entrepreneurships where like businesses are joined together
  5. Mergers and acquisitions
  6. Social media (especially Linkedin and now Facebook)

They are more successful when there’s an agreed upon exit strategy between all parties to the alliance.

Strategic alliances aren’t about mentoring or prospecting.

But, they share elements of both:

  1. They are about learning from each other.
  2. They are sometimes about cross-selling to each other’s customers
  3. They are about sharing all kinds of resources, experience, and history

What are strategic alliances?

They are actions taken by two or more entities (adults or kids, or animals or plants or a combination) that come together to accomplish a common goal.

So, don’t just sit there! Get out there and find the strategic alliances that are right for you. If you’re not sure how, the Business Success Center’s Handshake Strategy™, can help you choose the right goal, find the right people, and manage the alliance to save you time and improve your success rate.

Dr. Triplett will present a free webinar on Handshake Strategy™ on November 15th from 2:00 - 3:00pm CST.

Click here for more information and to register.

Topics: Business Operations, Management, Content Type

Jan Triplett

Business Success Center

Jan Triplett, Ph.D. is the CEO of the Business Success Center (BSC), a City of Austin certified green business, that provides sales and financial growth strategies, planning, and implementation. She is also a professor in Business and Professional Skills for the online MBA program at Mary Baldwin University. Triplett is a national and international speaker, author of A Networker’s Guide to Success and co-author of Thinking Big, Staying Small and Easy to be Green. She published The Networker ” magazine for over ten years and moderated KUT radio’s nationally syndicated program, “The Next 200 Years”. She was co-creator of the award-winning “City Management Academy” and the “Owners MBA” and co-founded the Entrepreneurs’ Association Hatchery incubator and accelerator. She is a small business activist. She served as a White House Conference on Small Business and Congressional Summit delegate, served on the Mayor’s Task Force on International Infrastructure, initiated the Northcross IBIZ District and recommended portions of Austin’s Big Box Ordinance. She was a founder of the Women’s Chamber of Commerce of Texas and the Greater Austin International Coalition. The SBA honored her as Texas’ Small Business Advocate. She has also earned her CBTAC and Director credentials. Her company received a Small Business Administration (SBA) five-star national award and the Austin Business Journal named it a top 20 management consulting firm.
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