Strategic Alliances - Do’s and Don’ts

As companies search for ways to grow, three methods usually come to mind: organic growth, acquisitions or strategic alliances. Over the next several weeks we’ll focus on strategic alliances.

Strategic alliances cover a broad gamut of possibilities that range from loosely structured partnerships to full-scale mergers. Structured correctly alliances can leverage the strengths of both parties and accomplish significantly more than either partner could accomplish on their own. When considering an alliance the two words mutual and benefit cannot be overemphasized.

Do it if …

There is significant mutual benefit for both parties that cannot be easily achieved by other means—such as an acquisition or internal growth.

Don’t do it …

So you can get bigger. Bigger is not always better. Make sure there are sound business reasons for growth and explore whether you can grow your market yourself.
If you can’t grow internally. Be sure you’re not using an alliance to try and solve an internal problem. If you’re losing market share, ask yourself what needs to change in your company.
Because you like the person. Go to lunch or play golf together, but don’t create an alliance if this is your main motivation.
Because someone talked you into it. If it’s not your idea and you haven’t considered how it fits into your overall business strategy, then you’re relying on luck.
You always like to be in control. Remember the word mutual; you are aligning with another party. It has to be a give and take relationship to succeed.

Jensen Consulting Blog