Strategic Alliances - The Art and Opportunity of Creating Them

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The Art and Opportunity of Building Strategic Alliances

Presenter: Anita Campbell

How to grow your business faster and save your sanity with business

partnerships


Today’s Partnering Agenda

What is a strategic alliance? Criteria for successful partnerships Who should you partner with? How to establish partner relationships 7 Good Reasons to Partner 3 reasons NOT to partner


The Power of Partnerships

In 1980, upstart Microsoft partnered with then-giant IBM. The Microsoft DOS operating system

was distributed with IBM’s new personal

computers.

$53,000,000,000


What is a strategic alliance?

Means many things to different people Can describe:

• Cross referrals • Outsourcing to 3rd parties• Co-marketing• Online affiliate arrangements• “Business partnership” arrangements• Joint venture companies• Legal partnerships


Formal Tech Partner Programs


Definition: Business Partnership

Today we will focus mainly on “Business Partnerships”

Criteria:• Each side brings something to the table the other

doesn't have • Each made strategic decision not to spend the

time or money to do it alone, or can’t do it alone• Together, you are better equipped to meet a

market opportunity


Do You Need A Partnership?

ASSESS YOUR NEEDS Evaluate your situation – do a SWOT

analysis if necessary Walk in your customer’s shoes

• What do they need? Versus what you offer Observe competitors

• If they are ahead, how do you catch up fast? Evaluate market opportunities

• Do you have everything you need to capture a market opportunity?


Do a Cost Benefit Analysis

Evaluate partnering against not partnering Speed Focus Make vs buy Sometimes partnering is the ONLY option


Do You … REALLY … Need A Partnership?

75% OF ALL PARTNERSHIPS AND ALLIANCES FAIL


Establishing Partnerships - You Us Me

YUM Method: Broach a partnership with another party in this order:

You – what’s in it for the other party Us – what can we achieve together Me – what I get out of it comes last


PESD to A Partnership

P = Paint a picture of the partnership opportunity and potential • Example: “There is an opportunity for you to

extend your reach into XYZ market by ….” E = Explain the mechanics of how you see it

working • Example: “If you can advance more inventory

without requiring up-front terms, our company can accept more big orders. Require a 20 deposit, and allow the remainder to be paid out over time. In return we will ….”


PESD to A Partnership (cont’d)

S = Sell the benefits • Be prepared to demonstrate with hard numbers,

such as “… this deal would double sales on your XYZ line.” Remember to focus on the benefits to them, not you.

D = Document the relationship • Partnerships may involve formal arrangements

such as contracts, or in other cases something less formal. At the very least there should be an email or letter outlining the arrangement. – Tip: document it fast. Deal momentum can die.


7 Good Reasons to Partner

Partner with suppliers to finance the growth of your business

Open up new markets Get access to valuable training and tools Establish credibility Strategically add specialty expertise Round out your product or service offering Meet governmental contracting requirements


“All man's miseries derive from not being able to sit quietly in a

room alone.”

Be Choosy When Partnering

-- Warren Buffett, the world’s second richest man, adapted from Blaise Pascal, 17th century mathematician


3 Warning Signs NOT to Partner

No compelling goal: You don’t have a specific business goal to pursue jointly • Use the “revenue measure”

Vagueness: Your partnership is vague• Small businesses don’t get much out of vague

“marketing” partnerships – better off selling instead

No Commitment: Your partner (or some faction within it) is not committed • The “kiss of death”


Anita Campbell

[email protected]

330.242.1893

www.smallbiztrends.com

Thank you!

Credits: Slide # 9, various industry studies including Vantage Partners

Slide #10, Kare Anderson, www.sayitbetter.com, as stated in a Small Business Trends Radio program

© October 2006, Small Business Trends LLC

Strategic Alliances - The Art and Opportunity of Creating Them

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Transcript of Strategic Alliances - The Art and Opportunity of Creating Them