Use Strategic Alliances To Grow Your Business


Do you want to grow your business or nonprofit organization? Almost every client we serve is interested in growth – growth of their business, expansion of their market reach, increased sales of their product or services, more impact and influence, and more revenue and profit.

But their dilemma and the reason they hire us is that they know they want to grow, but they are not sure of the best, most effective strategy to make that growth happen.

One of the strategies we highly recommend is the use of strategic alliances.

Defining a Strategic Alliance

A strategic alliance is formed when two or more independent businesses or organizations decide to work together to achieve a mutually beneficial outcome

Before rushing out to find a strategic “partner,” take time to thoroughly understand the benefits, criteria, and risks of strategic alliances.

Benefits of Strategic Alliances

The benefits of forming a strategic alliance are vast and varied depending upon the reputation, resources, and strength of each “partner.” 

Some of the potential benefits are: 

  • Each business or organization continues to be legally independent of the other. This is an alliance, not a partnership. 
  • The alliance develops economies of scale.
  • It expands your customer base.
  • The alliance shares the risks, costs, and rewards.
  • It speeds up product development.
  • It increases productivity.
  • The alliance brings products to market faster and at a lower cost.
  • It expands your impact and influence.
  • The alliance spurs innovation.

Criteria Important to Consider

Strategic alliances can be a valuable part of your growth strategy.  If you decide to utilize strategic alliances to grow your business or organization, consider these factors before reaching out to a prospect.

Successful strategic alliances:

  • Share a common goal.
  • Have clearly defined expectations and outcomes so participating parties know exactly what has been agreed upon, what their responsibilities are, etc.
  • Have a written agreement signed by representative parties.
  • Are valued as an asset that requires respect, nurturing, and care.
  • Share resources, staffing, knowledge, technology, and other valuable assets.
  • Require consistent leadership, ongoing management, and effective communications.

Risks of Strategic Alliances

While strategic alliances can be incredibly valuable for your business or organization, they require careful exploration before entering into an agreement. All business involves some risk. The level of risk can be mitigated by understanding potential risks before entering into any strategic alliance agreements. Some of the risks that can result from poorly planned strategic alliances include:

  • Frustration when one party does not fulfill their agreed-upon function. 
  • Conflict when parties end up disagreeing on how operations are to be executed.
  • Disagreement over which party is responsible for a task or assignment.
  • Blame when parties disagree on who was responsible for an outcome that did not meet a goal.
  • Loss of proprietary information when your information is shared with other parties.
  • Potential loss of personnel if they are lured by the environment of one of the strategic alliance parties.
  • Loss of trust if a project, outcome, or personnel effort goes awry.

Examples of Well-known Strategic Alliances

Here are a few examples of well-known strategic alliances:

  • Starbucks and Target – If you have been in a Target Store, I am sure you have seen the Starbucks counter (and most likely people waiting in line to get their favorite mocha.) Target and Starbucks share similar audience demographics. They decided to create a strategic alliance back in 1999 and the alliance is still strong today.
  • Starbucks and Barnes & Noble – Starbucks entered into another successful strategic alliance with a retail bookstore located in heavily visited malls. Starbucks knew people enjoy having a beverage while they read or shop.
  • Disney and Chevrolet – The Test Track at Disney’s EPCOT is a strategic alliance that creates a thrilling ride and educational experience for EPCOT guests, while Chevrolet gains brand exposure.

When advising my clients, I often recommend forming a strategic alliance between a for-profit business and a nonprofit organization as an effective marketing strategy. Just look around your community. You will often see strategic alliances between financial institutions and healthcare organizations or private businesses sponsoring youth activities, or several nonprofits joining forces to advance a mutually beneficial outcome.

Are Strategic Alliances Right for You?

As you ponder strategic alliances as part of your growth strategy, ask yourself these questions:

  1. Am I interested in growing my business/organization, expanding my impact and influence, and serving more people?
  2. Am I willing to do my homework on a prospect before entering into a strategic alliance?
  3. Do I have the capacity to be an active participant in the functioning, leadership, and management of a strategic alliance?
  4. Is the prospective strategic alliance aligned with my core values, and mission, and do we have a shared goal?
  5. How will the alliance impact my operations, staffing and existing agreements and commitments? 
  6. Am I willing to invest the time to define the purpose, desired outcomes, operational responsibilities, and develop a written agreement?

In summary, the benefits of a strategic alliance far outweigh the risks. Do your homework, invest the time to clearly define key items in a written agreement, and be involved in the leadership and ongoing management of the relationship. Strategic alliances will move your business or nonprofit forward faster than you can do it alone.

Grow your business using strategic planning. Strategic planning can help you develop the clarity to stay focused and take action. In this guide, you will discover the reasons smart companies use strategic planning, tips to make strategic planning work for your business, and how to build a sustainable business.

Judy Whalen
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