Strategic Alliances and Partnerships
No matter what business you are in, strategic alliances and partnerships are important to the survival of your business. In a retail operation the most basic of these choices are the brands and lines you carry as inventory. It’s also a decision for the supplier to ensure your business has the proper reputation and market for their products, that’s why there are very few Ferrari dealers which also sell KIA’s. Both are great vehicles at their price points but both are focused at different market segments. You and the partner make the choice based on what you believe your and their, customers want. In a service industry where you are offering products and services as a reseller or under via a private label, you also make these decisions. Making the right choice of alliance can directly effect the success of your business.
How to choose?
Easy choices for a retailer are to repeat existing purchase patterns for immediate needs. I.E. Customers always buy this product and we are running low, so we will order more. Selecting new product lines or having to place an order a year or more ahead increases the difficulty. Will your choices meet market trends and expectations? A service industry based business presents equally easy and difficult choices. It’s easy to pick up a new line, test it and keep it or drop it based on results, but sorting out which services to recommend can be more difficult. The easy part is to identify the categories required. For example, if your target market is in need of live content for their web site, some providers offer streaming news from the major news wires, others Financial updates, weather, sports, streaming video or audio.
How do you choose the right offering(s) from this myriad?
The key is knowing what your customers need. Build an list of essentials. What are the minimum tools you will need to reach your
target? Now think of what your target audience will need. This is the most important part; Ask yourself – What will my customer want and need? You can then start making informed choices about strategic alliances and partnerships. Identify the categories of needs first, then look to see which prospective partners fill those very specific requirements.
Remember, by making an alliance you are creating an opportunity for both yourself -and- the partner firm to profit from increased market exposure. A profitable alliance allows you to sell into your partner’s market but also increases their exposure into your market. It’s a two way street and value moves both ways. Equitable agreements to share this value will strengthen both businesses.