A Basic Introduction to Strategic Partnerships
Accountants in Manchester – Small Business Advice – Strategic Partnerships
It seems like everyone in business these days uses euphemisms and catchy phrases to describe what can actually be complex business relationships. You’ll often hear people throw around terms without completely understanding the real meaning of the term itself. For instance, people like to refer to their vendors and suppliers as strategic partners, when in fact, they are nothing more than just a vendor. There is much more involved in strategic partnerships than just agreeing to purchase a product or service. If that were the case, then anytime you bought anything, you could always just say you bought it from your strategic partner. Strategic partnerships extend well beyond the typical boundaries of what would normally be considered just another business relationship. They are the ultimate alliance between two business enterprises whose collaborative efforts and specialties allow both to benefit from each others strengths. The goal is for both enterprises to provide each other with incentives to grow from their collective efforts. It goes well beyond the typical buyer and seller relationship. In a number of cases, trade secrets, ideas, development, business know how, and labour costs can be shared in order to ensure the partnership is a successful one. Because so much is shared, both companies must enter into extensive negotiation to ensure each is aware of their respective liabilities and responsibilities.
These partnerships involve extensive negotiation and legal ramifications.
Because of the nature of these relationships, they tend to involve extensive negotiation. Often partners will share product development, marketing, product branding, and advertising expenses. Because of the nature of these partnerships, precautions must be taken to protect each company’s rights as they pertain to employees, profits through the partnership, and intellectual property. They are the ultimate combination of each company’s greatest attributes. They share a common goal of increasing market share through the partnership. With all the legal consequences and intense negotiation, does this mean that strategic partnerships are the domain of the big corporations, or can smaller enterprises benefit from these collaborative partnerships?
Any company, any size, can pursue a strategic partnership.
Contrary to popular opinion, any two companies, regardless of their size, can enter into a strategic partnership. However, when doing so it’s extremely important for both parties to outline the responsibilities and liabilities for both, and that neither allow the other to try and hire away employees. Nothing should ever be left to interpretation, and both parties must never allow verbal agreements to take precedence over written ones. If these conditions are respected, then both parties can be properly protected if the relationship dissolves. In fact, a number of strategic partnerships start when two smaller companies combine their strengths, and ride the wave of growth together. Therefore, if you are a small or medium size business owner, or entrepreneur, and feel you would benefit from such a relationship, then you can simply concentrate on some of the key essentials of the strategic partnership. In doing so, approach the partnership from the perspective of a supplier trying to sell more products to a customer.
