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Strategic Alliances

strategic alliances sliderStrategic may be one of the most over-used words in business today. This is especially valid in the world of strategic alliances, where companies must distinguish between those alliances that are merely conventional and those that are indeed truly strategic.

As companies gain experience in building alliances, we often find our portfolios ballooning with partnerships. Certainly, many of these partnerships contribute value to the firm, however not all alliances are in fact strategic to an organization. Moreover alliances that are truly strategic must be identified clearly and managed differently than more conventional business relationships.

Due to the levels of organizational commitment and investment required, not all partner relationships can be given the same degree of attention as truly strategic alliances. The impact of mismanaging a strategic alliance or permitting it to fall apart can materially impact the firm’s ability to achieve its core business objectives.

Beyond revenue generation, we focus on five general criteria that differentiate strategic alliances from conventional alliances:

  • Critical to the success of a core business goal or objective;
  • Critical to the development or maintenance of a core competency or other source of competitive advantage;
  • Blocks a competitive threat;
  • Creates or maintains strategic choices for the firm;
  • Mitigates a significant risk to the business.

One of the key issues when developing a strategic alliance is to understand which of these criteria the other party views as strategic. If either partner misunderstands the other’s expectation of the alliance, it is likely to fall apart. What is needed is a methodology for selecting and managing strategic alliances such that the resultant outcome of the relationship drives the company forward. At True Reckoning, our Associates have been using a strategic alliance Framework to manage alliances with Fortune 500 companies and small enterprises alike. We have the practical experience to help you gain the greatest leverage out of your alliances.