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Strategic alliances are the smart way to grow
a small business. Small entrepreneurs can form strategic alliances
to shore up or enhance their competitiveness in the marketplace.
Here are some tips that would enable small business entrepreneurs
involved in alliances to leverage those relationships for maximum
advantage.
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Communication
is the key.
While it is not vital that each partner's goals be
identical, each must be committed to a common outcome. Half of
all partnerships never live up to expectations. Be honest
about what you seek to gain, and what you can provide. The
most common mistakes are failure up front to clearly
articulate the value proposition of the alliance, mismatched
goals, insufficient commitment, and inability to adjust the
relationship to new business realities and flat out neglect by
upper management.
Look
for situations that are win/win for both parties.
Participate only if you can maximize the relationship;
and never when you think that the partnership cannot support
your business goals.
Even
though your company may be small,
read carefully around
sharing information related to fees. You don’t want to find your company accused of price
fixing. The kind
of knowledge sharing that takes place between partners is
essential to projects built for customers.
When
cultivating relationships with large corporations,
make sure
that you have connections with several people in the company.
Think of what would happen if your sole contact left – your
company may be dropped at the next contract negotiation.
Be
creative when exploring alliances – there will certainly be
opportunities where your unique business is a natural partner
for a strategic alliance.
When
in doubt,
consult your attorney or accountant about any gray
areas of your strategic relationships.
Keep
the end in mind: You are partnering with another company to
expand your business and to increase your cash flow by pooling
financial and managerial resources. If you have formed more than one alliance know as
much as possible about your alliance portfolio and determine how
the next alliance will fit into that portfolio.
Determine which direction your alliance portfolio is
taking your company. Terminating some alliances may be beneficial
if they are likely to lead to dependence in the long run. develop
in-house capabilities simultaneously with your alliance portfolio.
Remember that your firm is viable only as long as it maintains its
competitiveness. Rather than depending entirely upon an alliance
portfolio to sustain or improve the firm's competitiveness in the
market, retain some independence by bolstering the firm's own
capabilities and skills, creating
the force of attraction instead of constantly being attracted by other firms.
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