An attractive option
During the past decade, strategic partnering has become a more attractive
option because of the wide range of benefits, without the risk and burden of
paying for them. These benefits include:
- expanded access to markets
- advanced technology
- quicker product development
- broader geographic range.
The goal is to find a partner in areas where one or other of the companies has
limited expertise. In a successful alliance, partners gain access to specific
strengths – for example, in sales, technology, finance or distribution – that they
don’t possess themselves. Another driving force behind alliance building is the
desire to control the quality and performance of the entire production
process, from raw materials to system design, from manufacturing to global
distribution.
Sharing benefits and risks
The synergy generated by two co-operating organisations results in a sum
greater than its parts. A successful alliance preserves the distinct competitive
advantage of each business and allows those advantages and core competencies
to grow.
The benefits of partnering also include economies of scale, resulting in:
- increased versatility
- reduced costs through increased production
- enhanced purchasing and financial arrangements
- a stronger negotiating position with suppliers, customers and/or regulatory agencies
- greater access to critical resources
- opportunities for large-scale marketing efforts.
READ MORE (Mergers and Acquisitions Change Management - Strategic alliances) >>
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