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Alliance is defined by the Wikipedia free encyclopedia as a pact, coalition or friendship between two or more parties, made in order to advance common goals and to secure common interests.
A strategic alliance is when two or more businesses join together for a set period of time. The businesses, usually, are not in direct competition, but have similar products or services that are directed toward the same target audience.
Partners may provide the strategic alliance with resources such as products, distribution channels, manufacturing capability, project funding, capital equipment, knowledge, expertise, or intellectual property. The alliance is a cooperation or collaboration which aims for a synergy where each partner hopes that the benefits from the alliance will be greater than those from individual efforts. The alliance often involves technology transfer (access to knowledge and expertise), economic specialization, shared expenses and shared risk.
Below are 10 good reasons to create a strategic alliance.
1. You could offer your customers a larger variety of products or services. This will allow you to spend less time and money developing new products to sell.
2. Your number of sales people will increase because you are combining with other business. You won’t have to spend time and money hiring new employees.
3. Your marketing and advertising budget will increase. When you form a strategic alliance with other businesses you both will share the advertising and marketing costs.
4. You can now offer your existing customers more back-end and up-sell products. This will increase your sales and profits.
5. Your business will gain a larger number of skilled people working on the same project. You will gain the knowledge of the other businesses employees.
6. You will be able to beat your competition by selling to a larger target audience. You will also increase the total number of existing customers you can sell your products and services to.
7. You can exchange endorsements with your alliance partners. You’ll add more credibility to your business and gain your potential customers trust to buy.
8. You can expand your business more rapidly. You can develop new products and services faster with a larger work force.
9. You will be able to solve your customer’s problems faster with a larger base of customer service people. You will also learn new ways to improve your customer service from your alliance partners.
10. You will have a larger number of “strategic thinking” people. This will allow both businesses to come up with profitable business ideas quicker than before.
To your successful Business Alliance!
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As a Business Alliance, John recommends:
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