Strategic partnerships are a core element of growth for any startup or organization. Whether you are forming a limited liability company, joint venture business, or an alliance, the right strategic partnership will go a long way in establishing a solid brand, building the right network, and creating exponential growth for your business.
You can often see telecommunication companies partnering with financial institutions and sports brands partnering with athletes or local and international clubs.
Benefits of Strategic Partnerships
Here are some of the benefits of entering into a strategic partnership agreement.
Access to Rolodex of Business Resources
It can be really stressful getting the right vendors for your business. You need to check if the vendors can deliver on their promise, if they are trustworthy and if the products or services they are rendering is delivered at a good price point.
A strategic partnership allows both businesses to gain access to each other’s resources. In addition to that, working with each other vendors may also lower expenses through bulk discount, joint promotions, joint staff training packages, and infrastructure.
Leverage Brand Strength
You may think that you need to be a huge company doing millions in sales before you can nail a good partnership arrangement but nothing could be farther from the truth.
Small brands also have brand strength that huge brands can capitalize on. This is because as a huge brand or even a global brand, it can be hard to break into new markets. However, a small brand by size can get more personal with their target audience.
For example, a big brand may want to launch a new product within a given timeline. There are so many moving parts when it comes to launching a product so they decide to enter into a strategic partnership with a small research company to collect customer feedback. The big brand benefits because they save on time and staff resources while the smaller brand can benefit from the credibility of partnering with a bigger brand.
Due to a lot of competition, penetrating the international battle can be an uphill battle. However, by strategically partnering with an international company, the transition can be way easier.
First, you may be able to skip the various business processes due to doing business across borders because you will be coming under the wing of another company. Also, such a partner will have knowledge of the market and will be able to guide you to make the best business decisions.
Access to Marketing, Operational and Technical Resources
You can experience rapid growth by partnering with a company that lets you share marketing, operational, and technical resources. For instance, if you sell a physical product, you can partner with a company that has a huge web presence online to sell and distribute that product without additional cost on your part.
Grow your Customer Base
Companies with a mutually beneficial product can grow and strengthen their customer base through partnership. A perfect example of this is a partnership between banks and telecommunication companies. The banks provide the mobile banking services that customers can access conveniently on their mobile phones while
A constant challenge for many businesses is finding new ways to raise capital. This capital is usually directed to paying new staff, expanding product lines, or creating new distribution channels. Whatever the need may be to increase capital, forming a strategic partnership with another business can help you significantly save costs, and increase your chances of securing funding from investors and financial institutions so each business can meet their goals.
There are several other benefits of a strategic partnership from decision making, building a community of loyal fans, access to new technologies, invites to events, and even invites to new business opportunities.
Although, strategic partnership is very beneficial to both parties, it is important that there are laid down rules and a very clear legal agreement in order to avoid a clash of opinions, and a lack of trust, so take time to weigh the pros and cons before making a final decision.
We recently partnered with Livestock247. You can read all about it here.