Monday, 30 May 2016

The focus of bringing multiple companies together for a common objective

Projecting an old adage into today’s fast paced economy, it can be expressly said that no business is an island. Even the biggest business rely on an ecosystem of customers, suppliers, partners and competitors to survive. Navigating through the complex web of global economy is a task that is best attained with collaborating, partnering and creating strategic alliances with like minded companies or businesses. 

It can be surmised that perfecting collaboration with partners is a key factor in successful business of the present. It is, hence, essential that organisations focus on working with one another for mutual benefit, determine what value they will derive from it and how that value can be increased.
One of the most important reasons of coming together of companies is to gain access to knowledge and/or resources. Each partner helps in addressing the gaps in vital resources and uses the partnership to extend its skill set into new areas. Companies can also decide to join hands to develop new products or to enter a market that they could not enter alone. It creates a tremendous impact in industry when it is possible for related products from different manufacturers to work together. This can unlock customer value and boost the revenue potential of both or more of the products. For eg., consider a microprocessor company coupling its product with a smartphone producer or a screen manufacturer. It can lead to an increase in profits for companies and value for the customers.
Another crucial facet of coming together of businesses is the economic advantage. You can reduce costs and risks by distributing them across the members of the alliance. Sharing R&D costs and facilities is economically conducive, while sharing expertise can be invaluable in speeding up the processes. It stands to reason that this will help the production volume to increases, causing the cost per unit to decline and helping to increase profits. Strategic global business alliances are effective ways of entering new foreign markets. Partners can provide established marketing and distribution channels, as well as knowledge of the local markets making it easier to break into unfamiliar territories.
Another category includes utilizing strategic advantages. Co-operation instead of competition with your rivals, tapping each other’s potential will help you keep the system function productively. You can also cofunction to create vertical integration where your partners are part of your supply chain. Strategic alliances, in many cases, may be useful to create a competitive edge by the pooling of resources and skills. The association can also lead to future business
opportunities and the development of new products and technologies. These kind of partnerships may also be used to gain access to new technologies or to work on joint R&D.
An alliance between companies should create an improved and profitable situation for all the stakeholders or it will not last. Partners should commit to developing and building a positive alliance. The best way to reach out to potential strategic partners is to start networking. If you are a small business owner, you can research other business in the nearby market area and try to find products or services that compliment your brand and share your vision. Companies need to have a certain harmony with each other for the partnership to work. Trust is perhaps the foundation of any strategic alliance or collaboration between companies. It also requires commitment from all partners to give it the needed longevity.
An alliance between two or more businesses enables each to achieve certain objectives neither would be able to achieve on their own. Today and in future, as the world starts getting more and more tightly linked, the boundaries of the companies are getting quickly blurred and businesses are forced to cut across organisational frontiers. It is essential that you strategize to engage in this trend and join your hands with others in your entrepreneurial journey. Business of today does not stop at the company borders, but rather start to take wings from there to newer avenues as it pushes to improve cross organisational processes.

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