Business success and growth are achieved through methodical and strategic planning. Three important reasons for you to consider developing strategic alliances in your strategic plan are:
1. Increase in Technological Sophistication
2. Improvement in Training
3. Accelerate Your Innovation Process
Technological Sophistication
An exchange of technology to compliment your core strengths shores up your core weakness and improves production capabilities to better serve customers. An example of this type of alliance is the alliance of Kinko’s Service Corp. (copy centers) and Xerox Engineering Systems to establish a nationwide network for faxing large-format documents. This service was especially valuable to architects, contractors and advertising agencies before file transfer protocol became practical. Kinko’s gets a revenue boost and Xerox gets additional placement and unit sales.
Technical hotlines and on-site technical support are regularly available from suppliers with whom you’ve developed alliances. While much of this has been outsourced to India over the years, this type of alliance can overcome the cost benefit in outsourcing offshore.
To receive a technological contribution or possibly a technological edge in your industry like the alliance between IBM and Apple to develop a new computer operating system that allows both hardware formats to communicate, or like Nynex Corp. and Philips Electronics who joined to develop screen telephones for residential use.
Training
Learning curve commitment. Cost savings are passed along as experience is gained in producing a new product, and discounts are available on start-up products to encourage early sales.
Better sales and technical training for your employees is an important benefit in partnering with your suppliers. More manufacturers and distributors are developing training programs for dealers.
Guggenheim Dental, a dental supply distributor in Southern California is now regularly offering training programs for their top customers. Recently, at a seminar I delivered for the National Nutritional Foods Association, I suggested to the retailers that they only buy their nutritional supplements from suppliers that offer training DVDs. This is an added benefit in the seller/buyer relationship.
Innovation
The computer and electronics industries have profited greatly from alliance relationships. Innovation has become commonplace for firms that have chosen to work together. The University of Toronto’s Innovations Foundation signed an agreement with Northway Explorations Ltd. and Polyphalt, a private Ontario, Canada company, to deliver polymer-modified asphalt materials technology for longer lasting roads to the commercial market.
To differentiate oneself from the competition. Steelcase's alliance with Peerless Lighting, located in Berkeley, California, offers state-of-the-art office lighting. The relationship has brought Steelcase an additional $15 to $35 million in annual furniture sales. Also, they received additional dollars from the light fixture billings.
Technological sophistication, training and innovation are three of many reasons that you will want to have strategic alliances in your future strategic plans.
