Strategic alliances are partnerships in which two or more companies work together to achieve objectives that are mutually beneficial. Gaining access to new markets; accelerating the pace of entry into new markets; sharing of research and development, manufacturing, and/or marketing costs; broadening the product line or filling product line gaps; and learning new skills are among the motives underlying the entry into strategic alliances. Companies may share resources, information, capabilities and risks to achieve this. While companies have used acquisition to accomplish some of these goals in the past, forming a strategic alliance is more cost-effective.
Before entering into a strategic alliance, enought thought is to be placed behind the structure of the relationship and the details of how it will be managed. Consider the following in your planning process:
1. Define expected outcomes from the relationship for all the parties in the strategic alliance.
2. Define and document the elements provided by each party, and the benefits a successful alliance brings to each.
3. Identify the results that will cause the alliance to be most beneficial for your business and define the structure and operating issues that need to be addressed to achieve these results.
4. Protect your companies intellectual property rights through legal agreements and restrictions when transferring proprietary information.
5. Be certain that the company cultures are compatible, and the parties can operate with an acceptable level of trust.
Companies of all shapes and sizes have effectively developed strategic alliances to build their brand. Starbucks partnered with Barnes and Nobles bookstores in 1993 to provide in-house coffee shops, benefiting both retailers. In 1996, Starbucks partnered with Pepsico to bottle, distribute and sell their coffee-based drink, Frappacino. In addition to product based alliances, in 2006, Starbucks formed a strategic alliance with the NCAAP, with a mutual goal of expanding their brands with cultural positioning relative to social and economic justice.
Developing the right strategic alliances could take your brand to a path of limitless possibilities.