Rapid technological development, constant change and, above all, increasing globalisation are the hallmarks of the modern world, where independent operation of even the strongest organisations is increasingly unlikely to achieve
its goals. Homogenisation of consumer tastes and the expansiveness of global giants mean that cooperation is very often the key approach to competing effectively.
Among the many possibilities for cooperation, a very attractive and popular one in recent times is the strategic alliance, i.e. a form of cooperation between competitors who
have decided to jointly carry out an undertaking by combining and coordinating their resources, means and skills. Most often, alliances are formed by companies in the automotive, technology and aerospace sectors. Elementary examples of cooperation are the strategic alliance between Fiat and Chrysler or that of LOT Polish Airlines with Star Alliance.
When to decide on a strategic alliance?
The main factor that drives companies to decide on a strategic alliance is risk reduction. Cooperation between two or more companies means that the risks of the project are shared between the partners, each of which retains its organisational independence. In addition, the costs of the union are lower than those of an investment made by each party separately, which in turn allows the company to
diversify its product portfolio thanks to savings. According to Anna Pietruszka-Otryl from
the Chair of Organisational Behaviour at the University of Economics in Krakow,
thanks to strategic alliances, companies become more courageous in entering new sectors,
previously unknown to one of the parties,
because they feel supported and introduced by a company with an established position in a given market.
Alliances also enable a significant reduction
in production costs and increased benefits from economies of scale.
Joint purchasing by cooperating companies improves the negotiating position phone number list vis-à-vis suppliers and enables volume and contractual discounts. In addition to price
advantages, alliances also favour savings in delivery times and dates, which is particularly important in sectors where delivery times are an essential factor for success, for example just-in-time production.
A business alliance is also a great opportunity for pharmaceutical or biotechnology companies to develop a product more quickly and comprehensively. Cooperation saves time and money, which in a single production environment the time sales teams save on tasks is better spent elsewhere is spent on unnecessary duplication of development research. An example of an alliance in the biotechnology sector is the agreement between Innogenetics,
a company that is one of the 81 corporate members of the European Biotechnology Association EuropaBio, and Sanfoi Aventis for Alzheimer’s disease research. Each company provides the “missing pieces of the puzzle” such as technology, competences, knowledge or know-how, and the benefits of the cooperation are shared between the parties to the alliance.
A strategic alliance also allows you
to build a strong and stable competitive position, both locally and internationally, more powder data quickly and effectively than if you acted alone. In addition, companies can choose the best partner for you with the desired competitive advantage, which you will develop together in the future.
An important reason for entering into an alliance is the possibility of overcoming administrative barriers. This is a considerable advantage, especially for countries with preferential government policies towards national companies. Collaboration makes it possible to circumvent many barriers, such as discriminatory tax policies or the need to obtain additional certificates and permits.
Alliances are also often the only opportunity for growth and expansion abroad for small and medium-sized companies located in economically less developed regions. Building a market position independently costs small companies a lot
of time and forces them to spend significant amounts of money without any guarantee of product acceptance and return on invested resources. Therefore, forming an
alliance allows inexperienced companies to minimize risks, reduce costs and shorten the time of initial expansion into other markets, especially foreign ones.
Smooth running of the alliance
A strategic alliance must be built in two basic stages. The first is to agree on the terms of cooperation between the partners and the second is to establish the organizational basis of the alliance. Of course, in each case, the determination of the
organizational chart is the result of individual negotiations and is not subject to aggregate treatment, but there are nevertheless 4 fundamental principles that must be taken into account.
- The principle of partnership between
- allies: It is important for the positive development of the alliance that rights and obligations are equal and that the benefits of the agreement
- are proportional to the amount of effort invested. Compliance
- with this principle allows
- for a comparison of the two amounts, which in turn enables a stable and long-term agreement.
- Separation of powers:
- Responsibilities and rights must be clearly defined from the beginning of the cooperation, as well as the decisions that allies can take on their own and those that require the agreement of all actors. Clarity in the separation
- Clear project management: An external manager should be hired or a person from the existing staff should be selected to be the alliance coordinator for the duration of the coalition. Most often, the choice falls on an external manager with the
- credentials of a consultancy that supports the entire operation. By selecting such a person, the allies can concentrate on the correct management of the cooperation
It is also worth remembering that agreements reached during the negotiation of the terms of a strategic
alliance are not definitive. The alliance evolves during its course and the partners change their positions (market or competitive), objectives and needs in relation
to the initial situation. It is therefore important to set deadlines within which the terms of the alliance will be renegotiated.
Increase your company’s visibility
Partnerships are established for specific purposes, and partners clearly define the scope of cooperation
and expected benefits. The most common goal of a partnership is to improve the company’s competitive position on the world market by introducing
an innovative service or product. Very often, strategic alliances take a company to a completely different level of development, opening a path that an independent
company could never enter. Therefore, if you have an idea about how to develop your company, find a partner and together,
sail into the deep waters of the world market!