Are you keen on entering strategic business relationships?
You’ve probably read about corporations signing strategic partnerships with other companies or individuals. In 2018, for instance, Apple and Salesforce announced a strategic partnership. In 2013, Adidas entered a partnership with rapper Kanye West.
The common theme here is these are large businesses. As a small business owner, you might be wondering whether your enterprise has the capacity to attract strategic partners and whether the resulting partnership will yield any tangible benefits.
That’s the whole point of this article. Continue reading to learn more about the benefits of strategic partnership. But first off:
What’s a Strategic Partnership?
A strategic partnership is a long-term collaboration between two commercial entities. There is an agreement between the partners to share resources as they work toward common commercial goals or objectives.
Here’s an illustration of a strategic partnership.
Take company A, which is an aircraft manufacturer. A has secured a contract to create rockets and spacecraft. Since A doesn’t have sufficient expertise in rocket manufacturing, it approaches company B, an established rocket manufacturer.
The two companies can agree to enter a strategic partnership, where they leverage each other’s resources with the common goal of fulfilling A’s contract. In return, B will likely yield greater revenues.
Now that you know what a strategic partnership is, let’s focus on the benefits of having strategic partners.
Cost Management
Having strategic partners can be an effective way to manage your business costs.
Let’s say you want to expand your business and enter a new industry. You have a couple of options: You could set up a new entity to operate in that industry. This is akin to starting a new business from scratch.
Another option is to acquire a business that’s already operating in the industry. You could also merge with another entity that’s already in that industry.
You can also seek a strategic partnership with a business that’s in that industry. This can turn out to be the most effective way to achieve this goal. You won’t have to spend a lot of resources operating in an industry you might know little about.
Access New Market and Customers
To illustrate how a strategic partner can help you reach new markets and gain customers, think of OneWeb. The company promises to expand global connectivity, giving businesses across the world, especially those in remote areas, access to powerful internet services and solutions. OneWeb CEO has said just as much.
But to fulfill this promise, OneWeb has partnered with multiple businesses to manufacture, launch and deploy satellites. Once it starts rolling out its services and gains customers, the company will be well aware that it wouldn’t have achieved this feat without its partners.
Leverage the Power of Strategic Partnerships
Strategic partners can take your small business to the next level. They’ll help you gain access to new markets, provide invaluable resources and expertise, and even advise you on how to go about various business challenges.
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