The use of strategic alliance in an organization

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The use of strategic alliance in an organization

Posted by Maria Martyak On August 8, Filed under InsightPartnershipsstrategic alliances When approached for a strategic alliance, many small business owners are hesitant, as the amazing potential these kinds of partnerships hold is not always readily apparent. In this ever-globalizing world, though, strategic alliances are becoming more relevant to business owners of all sizes and all industries — what used to be limited to blue chip companies is now a commonplace consideration for many small business owners.

Here I will clarify what defines a strategic alliance and how they can benefit small businesses. When considering entering into a strategic alliance, it can sometimes feel as if someone is trying to take over their business.

They also find the operational and financial implications might seem hazy, and the work ahead too demanding. Some of the concerns they expressed include: Slowly but surely, we are seeing these doubts erode as more business leaders become comfortable with the concept and the benefits of strategic alliances.

What Are Strategic Alliances? Strategic alliances are agreements for cooperation or collaboration between businesses, with the ultimate result being a synergy where each party will benefit more from the alliance than from individual efforts alone.

By definition, a strategic alliance is an agreement between two or more parties to pursue a set of agreed upon objectives while remaining independent organizations. This type of partnership falls between mergers and acquisitions and organic growth.

The use of strategic alliance in an organization

Overall, strategic alliances allow each partner to pool resources while concentrating on their competitive advantage and simultaneously growing their respective businesses. These resources can include products, distribution channels, manufacturing capabilities, funding or intellectual property.

The use of strategic alliance in an organization

Other benefits include knowledge and expertise transfer, economic specialization and shared expenses. Knowledge and Resource Sharing Pooling resources can always increase the attractiveness of both partners. A knowledge share can include anything from marketing skills to management to branding to technical know-how.

The combination of these shared resources increases the value of each partner in a way that is not possible when each business acts alone. Knowledge and resource sharing often increases speed to market, reduces operational complexity and increases cost efficiency.

Opportunities for Growth A business can only sustain and grow organically until they reach a certain ceiling, which is determined by operational and financial capacity.

This organic growth might not be sufficient to satisfy the strategic growth requirements of management or stakeholders, meaning that a business cannot grow and extend itself enough without the expertise and support of an external partner.

Access to Target Markets Entering a new market almost certainly involves overcoming localized risk and operational hurdles. This is especially true when entering into developing countries or countries with limited experience dealing with foreign businesses. Economies of Scale When companies pool their resources and allow each other to increase manufacturing and distribution capabilities, economies of scale can be achieved.

The Land Trust Alliance is unveiling its new strategic plan for , focusing on four big conservation goals. Announcements. Are you encountering an issue with the redesigned or the new member portal? Complete the alert form, e-mail the PQA team, or call the PQA office to tell us about it!. Welcome PQA's Newest Members! “Strategic alliance” is a blanket term typically used among nonprofits to represent a wide range of affiliations, including joint ventures. Like a joint venture, a strategic alliance can involve a relationship with another nonprofit, a for-profit or a governmental entity.

Forming strategic alliances with the correct partner and developing effective executional strategies also allows smaller businesses to compete against larger competitors.

This is because the local business will have experience in and understanding of local laws, customs and the cultural climate in the target market. What to Keep in Mind When Entering into Strategic Alliances While the advantages to entering into a strategic alliance are many and varied, there are obviously some considerations to keep in mind when choosing the right partner: Ability to meet performance expectations: Is your potential partner able to produce at a time and speed you are expecting, at a cost and efficiency that are attractive to you?

These are necessary before entering into any partnership. Costs, deadlines, project roadmaps and execution duties should all be laid out clearly. They must also be agreed upon before any work begins. Partner compatibility and commitment to a long term partnership: This is ultimately the most important part of a strategic alliance.

Both sides must feel that they will receive a clear and definite benefit from the partnership. Without such a benefit, engaging in a strategic alliance is not advisable. Engaging in a strategic alliance allows each partner to learn from each other and develop competencies that can be more widely utilized elsewhere in standard business operations.

Use a Strategic Alliance to Grow Your Business If you are interested in more information on strategic alliances, a good resource is the Association of Strategic Alliance Professionalswhich provides networking and professional development opportunities for business leaders from all industries.

In addition to strategic alliances, plenty of partnership types are available for every business. A great starting point for discovering which type of partnership is best for a business is Investopediawhich offers definitions of partnership types along with constantly updated news stories on business partnerships.

Are you interested in entering a strategic alliance or other form of business partnership? Powerlinx uses the knowledge of specialized business analysts and advanced algorithms to match you with the right partner.

Let Powerlinx find you the perfect partner to help you grow:Written in comprehensive way in a perspective based on the author's long time experience inthe field. Not as much a hands on guide but gives a feeling of what role and responsibilities that alliance manager should bring and take.

The Land Trust Alliance is unveiling its new strategic plan for , focusing on four big conservation goals. Vision. The Drug Policy Alliance envisions a just society in which the use and regulation of drugs are grounded in science, compassion, health and human rights, in which people are no longer punished for what they put into their own bodies but only for crimes committed against others, and in which the fears, prejudices and punitive prohibitions of today are no more.

Alliance Hosts First Stack Test Seminar. On May 25th, the Arizona Environmental Strategic Alliance held our first Stack Testing Seminar at Intel in Chandler, Arizona. Using these criteria to identify genuine strategic alliances in the portfolio today and as a guide for developing future strategic alliances are the first steps to improving the impact of an alliance organization.

Strategic alliances are agreements between two or more independent companies to cooperate in the manufacturing, development, or sale of products and services or other business objectives. For example, in a strategic alliance, Company A and Company B combine their respective resources, capabilities, and core.

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