How Strategic Alliances Are Becoming The NEW Answer To Recession Survival!
The JVU Founders | September 3rd, 2009 | Blogroll, Joint Venture Training, Newsletter, NewsletterOne of the fastest growing trends during this recession for business today is the increasing number of strategic alliances. According to Booz-Allen & Hamilton, strategic alliances are sweeping through nearly every industry and are becoming an essential driver of superior growth. Alliances range in scope from an informal business relationship based on a simple contract to a joint venture agreement in which for legal and tax purposes either a corporation or partnership is set up to manage the alliance.
For small businesses, strategic alliances are a way to work together with others towards a common goal while not losing their individuality. Alliances are a way of reaping the rewards of team effort – and the gains from forming strategic alliances appear to be substantial. Companies participating in alliances report that at much as 18 percent of their revenues comes from their alliances.
But it isn’t just profit that is motivating this increase in alliances. Other factors include an increasing intensity of competition, a growing need to operate on a global scale, a fast changing marketplace, and industry convergence in many markets (for example, in the financial services industry, banks, investment firms, and insurance companies are overlapping more and more in the products they supply).
Especially in a time when growing international marketing is becoming the norm, these partnerships can leverage your growth through alliances with international partners. Rather than take on the risk and expense that international expansion can demand, one can enter international markets by finding an appropriate alliance with a business operating in the marketplace you desire to enter.
A strategic alliance is essentially a partnership in which you combine efforts in projects ranging from getting a better price for supplies by buying in bulk together to building a product together with each of you providing part of its production. The goal of alliances is to minimize risk while maximizing your leverage and profit.
An alliance is simply a business-to-business collaboration. Another term that is frequently used in conjunction with alliances is establishing a business network. Alliances are formed for joint marketing, joint sales or distribution, joint production, design collaboration, technology licensing, and research and development. Relationships can be vertical between a vendor and a customer, horizontal between vendors, local, or global. Alliances often are established formally in a joint venture.
Businesses use strategic alliances to:
* achieve advantages of scale, scope and speed
* increase market penetration
* enhance competitiveness in domestic and/or global markets
* enhance product development
* develop new business opportunities through new products and services
* expand market development
* increase exports
* diversify
* create new businesses
* reduce costs.
Strategic alliances are becoming a more and more common tool for expanding the reach of your company without committing yourself to expensive internal expansions beyond your core business.
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To Your Abundant Joint Venture Success!
Sohail Khan (the “Million Dollar JV Master”)
President & Co-Founder, TheJVUniversity.com
.
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Discussion
September 28th, 2009 at 5:15 pm
Alliances this time is one of the factor why counties have a joint force or they have a strong relationship or alliances helps in building a relationship.
mike@cheap auto insurance´s last blog ..California Auto Insurance Zone
October 8th, 2009 at 5:54 am
To increase alliances is a perfect strategy to survive. I learn a lot from your post. Thank you for sharing it.
October 10th, 2009 at 1:21 am
Great thoughts. Very insightful. I’m a Business graduate myself and I think your article would be right at home in some of the best texts on straegic business relationships.
I would add one thing to today’s “uses’ of strategic alliances:
TO SURVIVE.
I think it is the key to a lot of players weathering the storm
All the best,
Will
Will @ Commission Payload Bonus´s last blog ..About Us
November 1st, 2009 at 8:28 pm
almost more than half of the tips work for me ! yippy, i had an increase of 2000 visitors in two days !
November 4th, 2009 at 12:52 am
Sounds the best way to survive is find a group with similar interest as your business and form an alliance. This is really a great idea. Thanks!
agnes@small business resources´s last blog ..Nov 1, Small Business Grants – Federal and State Government grants
November 4th, 2009 at 10:03 pm
The University sounds interesting,
Mutually beneficial joint ventures are definitely one of the best ways to get an idea or product out into the marketplace. Most of my business is built on Joint Venture partnerships with other professionals, or straight referrals. Of course, my JV partnerships are much smaller than what you are talking about here. Still the same principle applies. If I have something of value to the customers of some other business, it just makes sense to partner up to offer the service to their customers.
Damon@Honest Debt Settlement´s last blog ..Debt Settlement Companies – Top 5 ways they can Screw you!
November 13th, 2009 at 8:12 am
@ damon , very nice comment , i have gone to ur blog its really informativ.
thanks for sharing.
Regards,
Blog Expert,
Saad
November 14th, 2009 at 11:57 am
To increase alliances is a perfect strategy if you want good business relationships and to make you stronger.
sid@topautoinsurancequotes´s last blog ..Auto Insurance Quotes are free online
November 18th, 2009 at 6:25 am
18 percent of their revenues comes from their alliances – that’s a big percentage. People buy from people, if they like you they’ll buy from you
November 23rd, 2009 at 10:53 am
Now more than ever and especially in today’s economic conditions the company that markets the best, meets to right people, creates the right strategic alliances, has very strong relationships, partners with winners and leverages the tools that prospective clients use to find products and services will be able to weather this economic hurricane that is now crashing into the shore with a storm surge that will drown many of those who are not prepared.
December 2nd, 2009 at 4:48 pm
Good post! My firm uses strategic alliances for all sorts of outsourcing… Not only have we saved money (like you suggest), but we can also do things that would otherwise be impossible.
December 15th, 2009 at 5:15 pm
this is a very informative post!
December 16th, 2009 at 12:53 pm
I?m a serial-commenter. It?s probably because I have an opinion on everything an
December 23rd, 2009 at 2:55 am
Business connections are essential. In order to get the best out of your business, you need the best of someone else’s business. Simple as that.
Tim@metal siding prices´s last blog ..Vinyl Siding vs. Steel Siding: Pros and Cons
December 26th, 2009 at 9:56 pm
Minimize risk, maximize profit, isn’t that what we all want to do? I like the idea of this alliance thing will be looking into it as I need every option that I can get
Dave Spates´s last blog ..Urban Meyer Retiring From Florida Gators
January 18th, 2010 at 10:40 am
I absolutely agree with you on this one. Strategic Alliances are definitely the answer if one has to move forward, we do need to work together in difficult times and think about the future. 2-3 minds become one great force, great ideas will burst out and also sharing of resources makes it easy to deal with the problems people encounter on daily basis.
But one thing I would want to add, this relationship should be built for long-terms rather than just waiting for recession to end and this should be a relationship of trust.
February 6th, 2010 at 5:03 pm
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February 11th, 2010 at 5:49 am
Thanks for the post. Keep the great work.
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