Strategic Partnerships: Building Successful Business Alliances
Strategic Partnerships and Business Alliances
Distribution Channel
A distribution channel is a set of interrelated intermediaries that bridge the gap between the supplier and the customer, adding value in terms of place, time, and possession.
Why Form Partnerships?
- The complexity of a global economy
- The speed of technological change
- A company’s limited resources
Objectives of Partnerships
- Provide greater customer value
- Respond quickly to diversity
- Respond quickly to technological change
- Gain market access
Assessing a Potential Alliance Partner
- What is the strategic reason for each party to collaborate?
- What is the cost/benefit ratio?
- To what extent is the relationship necessary?
- To what extent is it fair to both parties?
- Are there better candidates than the one being assessed?
Building Successful Alliances
- Identify opportunities for change
- Mobilize people and resources to create change
- Develop a long-term vision of change
- Build trust between partners
- Develop learning opportunities for members
Common Causes of Alliance Failures
The cause of alliance failures may be due to:
- Communication problems
- Misconceptions
- Greed
Requirements for Achieving Partnership Benefits
- Invest in collaboration
- All parties should make a valuable contribution
- Encourage good communication
- Foster trust and personal relationships
Cooperative Operations and Control
Cooperative Operations
A systematic, critical examination and impartial administration of an entity.
Objectives of Cooperative Operations
- Determine how well pre-defined objectives are achieved
- See how efficiently available resources are used
Deviation of Objectives
- Deviations occur between what is desired and what has been possible to achieve
- Deviations should be detected in time to attempt to solve them
- Consider the nature of each deviation, frequency, exact cause, and the extent to which it hinders the achievement of the objectives
Operational Characteristics
- Help to formulate policies and objectives of the organization
- Support senior management to evaluate and monitor the organization’s activities
- Help decision-makers to have a long-term vision, so they can plan better
Performance Objectives and Operational Control
- Optimize coordination and team’s human relations
- Monitor activities
- Review the program’s progress, solving difficulties when they arise
- Evaluate relevant situations, whether negative or positive
Internal Corrections
- Analyze the deviations to conclude the measures to counteract the effects
- The existence of a feedback process will enable timely decisions
- The implementation made by the manager to solve problems is one that has a greater advantage
Financial Investors and Partners
Financial Investor or Partner
Financial investors or partners are those who have money invested or to invest without taking control of the company. They may eventually provide business opportunities but do not manage the company.
Financial Assets
Financial assets are products, payments, letters, or actions that the issuer uses to finance itself. It is, therefore, the investor who acquires these assets.
Shares
Shares are titles of ownership of the company. Shareholders have the right to participate in the discussions of the administration, but only the dominant shareholder has the decision-making power.
Purpose of a Financial Partner
A financial partner seeks a financial operation and looks for companies with products and services that offer competitive advantages.
What Should a Financial Partner Provide Besides Money?
- Prestige
- Professionalization and discipline
- Global strategic vision
- Candidate companies for mergers or acquisitions