Strategic Alliances | how they work and benefits | grow your business | Safaraz Ali

How Strategic Alliances work and how can a Strategic Alliance help you grow your business by Safaraz Ali

#strategy #strategicgrowth #strategicplanning #strategicpartnership #strategicpartners #jointventures #ukbusiness

Has teaming up with another business ever crossed your mind?

A strategic alliance with another business is a great way for businesses of all size and types to expand their reach.

Strategic Alliance is an agreement between businesses in which each commits resources to achieve a common set of objectives.
It’s an opportunity for like-minded businesses to help each other by offering or recommending services to customers who you know would benefit from the help of another business.

When done correctly it's great for both businesses involved in the strategic alliance, as it helps grow revenue and increase customer base. It really is a 'win-win' situation and having this viewpoint towards it is what really defines the success of a strategic alliance.

So, what can a strategic alliance do for your business?

Your business may use a strategic alliance to:
• Share resources and information. Your businesses may be in the same
field but you are likely to have expertise in different areas. Both
businesses will grow stronger through sharing knowledge and learning
from one another.
• Increase access to innovation and new technology. Another business may
introduce you to a tool that totally changes how your business functions,
which you may never have discovered without them.
• Reduce competition. By joining forces with a like-minded business, you
will not only immediately lose them as a direct competitor, but you will also be creating a competitive advantage over other similar businesses by the pooling of both businesses’ resources and skills.
In other words, companies use Strategic Alliances to:

• Reduce costs through economies of scale or increased knowledge
• Increase access to new technology
• Inhibit competitors
• Enter new markets
• Reduce cycle times and increase efficiencies
• Improve research and development efforts
• Improve quality

How Strategic Alliances work?

To form a Strategic Alliance, businesses should:

• Define their business vision and strategy in order to understand how an alliance fits their objectives
• Evaluate and select potential partners based on the level of synergy and the ability of the firms to work together
• Develop a working relationship and mutual recognition of opportunities with the prospective partner
• Negotiate and implement a formal agreement that includes systems to monitor performance

How do you know who to form a strategic alliance with, and how can you ensure success?

It can be difficult to let new people into your business world after doing things in a certain way for however long.

How do you know whom to trust? If you are thinking about linking up with another business, then:

Select your partners carefully:
Look for peers who are like-minded and share your ethics. You can make contacts in many places; at networking events, online groups or social networking, and even with or via your Advisers: Business Coach, Bank Manager, Solicitor, or Accountant.
Be clear about your expectations and desired outcome:
Identify the kind of alliance you want and of course it needs to be a win-win.

Can you both commit equally to the project? It would be wise to negotiate a formal contractual arrangement for further peace of mind.

Keep communicating:
You will need to stay in regular contact to maintain a strong and successful alliance. Many business relationships fail because of faulty assumptions and poor communication. Make sure all communications are documented and don’t just assume your partner understands everything without explanation and rationale.

Set specific timelines:
Set trial timeframes to get an idea of your partner’s work ethic, management style, attention to detail, and true commitment. It’s important to test the waters before fully committing.

And if things do go wrong…:
Be sure to establish an exit clause when setting up an alliance. Decide upfront on an exit strategy that will suit you both should the alliance fail. Don’t be afraid to brainstorm possible best and worst case scenarios. Do your research to make sure it’s the right strategy for your business, and target a strategic and motivated alliance partner. It may be tough but the benefits for your business, and your partner’s business, could be endless. By sharing resources, costs and risks, your strategic alliance may catapult your growth in a way you might never achieve on your own.

So, If you’re considering a strategic alliance or you’re an expert on refining and further developing and sourcing Strategic Alliances then please contact SafarazAli to discuss further.

As we say, everything starts with a conversation. So Let’s talk.

Safaraz Ali
www.safaraz.co.uk
https://uk.linkedin.com/in/safaraz
https://twitter.com/SafarazAli

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