Three Steps To A Profitable Strategic Alliance

Forming a strategic alliance is why joint ventures have become the number one marketing tool for increasing sales and profits. The reason for this is quite simply the same principle of small hinges that can move a heavy door. Small parts can do large things when they form a strategic alliance to do something together and this is the reason that many companies have been launched using the principle of joint ventures. You can share resources, mailing lists, advertising, expertise, distribution channels and more when you form a strategic alliance with the right partner.

There are three steps to a profitable business relationship. The first step is finding the right partner to share in your joint venture. Choosing the wrong partner can be worse than no partner at all, so careful consideration should be given as to what a potential partner has to offer. On the same token, you need to consider what you are bringing to the joint venture. It doesn’t have to be a product because you can have exclusive rights to sell one, for example. You might be especially talented in a particular field of expertise and might be able to partner with a company that has just developed particular technology.

Once you have targeted potential partners for your business relationship, the next step is to be prepared to present what you have to offer and why a joint venture will be more profitable for the partner, and yourself. Part of a strategic alliance is strategizing how a joint venture will benefit both partners and what each partner will bring to the arrangement. This can be called a blueprint to joint venture success and you will need to use salesmanship, knowledge, action, desire, communication and negotiation skills to present it and convince potential partners.

The third step will be deciding what factors need to be put into the joint venture agreement for your strategic alliance. It is important to develop your blueprint for the strategic alliance into a legal agreement of how the partnership will be formed and who will perform what duties. This can include leadership, new product development or sales and advertising responsibilities. If the roles aren’t clearly defined, it can lead to disharmony in the strategic alliance and can lead to the failure of the joint venture.

While these are the main steps necessary to form a strategic alliance, there are a number of things that need to go into each step, in some cases. Learning the correct way to form a strategic alliance or joint venture is paramount to the success of the venture. Both parties can be more successful when sharing resources and capital, but having a blueprint for success, combined with knowledge and action are the keys to a successful strategic alliance that is profitable for all concerned.