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What
is Corporate Partnering?
It is joining
with one or more partners to share resources, risks, and rewards
from a joint enterprise.
Corporate
Partnerings can take any of a number of forms such as: a strong
relationship with a major customer, a partnership with a source
of distribution, a relationship with a supplier of innovation
or product, or an alliance in pursuit of a common goal.
Sometimes
partners will form a new jointly owned company. In other instances
one partner purchases equity in the other. Most often the relationship
is defined by a contract.
What
makes Strategic Alliance Partnering so important?
It's the
quickest way to grow a company, particularly in times of change.
Partnering has proven itself one of the most powerful business
tools for dealing with fast changing markets, technologies and
customers.
As the global
economy speeds up, corporate partnering is becoming the weapon
of choice for today's successful competitors.
In what
industries is partnering most common? It is no coincidence that
partnering is most common to industries experiencing rapid change.
There is
a direct relationship between the rate and scope of change within
an industry and the amount of corporate partnering that occurs
in that industry.
Think about
it. Look at the computer industry. Look at electronics, communications
and health care. Companies in these industries are vigorously
developing webs of strategic alliances, joint ventures, technology
licensing deals and consortiums. The industry with the greatest
amount of change, the Internet, exhibits the greatest amount
of partnering.
What are
some examples? We
are seeing more and more of these collaborative business arrangements
every day. They go by many names. Here are a few:
- Strategic
Alliances, Joint Ventures, Strategic Partnerships, Business
Partners and Alliances, Partnering Agreements, Business Coalitions
- Just
In Time Suppliers and Relationships, Sole Source Suppliers,
Outsourcing
- Keiretsu,
Zaibatsu, Shudan (traditional types of Japanese corporate partnering)
- Technology
and Product Licensing, Joint Development, Technology Sharing
and Cross Licensing Agreements
- Business
Partners, Affiliates, Franchises
-
Value Added Remarketers and Resellers, Value Added Dealers,
Distributors, OEM Suppliers and Customers, VAD, Distribution
Relationships, National Accounts
What
is the most common type of Corporate Partnering?
The most
common type of partnering continues to be the traditional Junior/Senior
partnering. Here a Junior Partner has a new product or technology
- but poor distribution and limited capital. The Senior partner
has superior distribution and/or access to capital. Each partner
has what the other needs. Each improves its competitive position
by exchanging the resources it has for the resources it needs.
What is
the driving force that is causing the recent upsurge in partnering?
Few companies
have everything that they need. You may need money, customers,
or product. No matter what you need, there is someone who has
it. You can either buy what you need or partner for it. Partnering
is frequently quicker and less costly. While avoiding difficult
and time-consuming internal changes, partnering allows you to:
- Rapidly
move to decisively seize opportunities before they disappear.
- Respond
more quickly to change with greater flexibility.
- Increase
your market share.
- Gain
access to a new market or beat others to that market.
- Quickly
shore up internal weaknesses.
- Gain
a new skill or area of competence.
- Succeed
although your company lacks otherwise key resources.
What
are the types of resources and assistance most often sought
from partners?
While this
will vary substantially from case to case the most frequent
resources are new products, better products, marketplace or
product expertise, personnel, capital, distribution channels,
production capacity.
In most
instances they fall into five categories.
- Capital.
Capital is a resource that is either loaned out in exchange
for interest or invested in exchange for equity. Within limits,
you can use it to alleviate shortages of other resources.
- Technology
and Expertise. You can convert technology and the expertise
of your employees into a marketable product.
- Existing
Product. Once you convert technology and expertise into
a fully developed product, you have something you can sell
to a customer. Most products require reasonable manufacturing
economies of scale in order to be produced and sold at acceptable
prices.
- Manufacturing.
Manufacturing requires skill and resources if it is done with
the quality and efficiency often demanded by customers.
- Marketing
and Distribution (Customers).
Without marketing and distribution (i.e. customers), you have
no one to pay you in exchange for your product. This is usually
the most important resource.
The most
important resource people partner to obtain are customers.
"You can never be too rich, too thin or have too many
customers."
How do
you find partners?
Identify
the key resources you need, but lack. This can include customers,
additional capital, new products, better products, new distribution
channels, expertise, additional facilities, increased production
capacity, or more personnel.
Look for
someone who has what you need.
Then ask
them for it.
But before
you ask, you must do one very important thing. Make sure that
you have something they need or want. If you don't take this
last step you will end up wasting their time as well as yours.
How do
you find partners?
We have
a structured approach to helping you find and close deals with
the partners you need. Here is how we do it: First we develop
a One Page Strategy Sheet for your specific situation. We apply
the following analytical tools to your existing competitive
position: Michael Porter Five Forces Analysis, The Discretionary
Dollar, The Virtual Dollar, Value Chain Ratcheting.
We do 7
point analysis to determine (a) who has what you need, (b) what
it is you have, or can obtain, that they may need, and (c) how
best to get them to seek you out.
We then
develop and implement a campaign to draw pre-qualified and motivated
potential partners to you.
Finally,
we help you negotiate and close your deals
Each campaign
is tailored to your specific needs. You pick and chose which
elements of the service you buy from us and which you do yourself.
We will even train you, or play backup, for those elements of
the campaign you want to do in house.
More
Information About Partner Acquisition Campaigns
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