Strategic Partnerships

Strategic Partnerships

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Until recently, businesses thrived on their internal resources. Their ability to house numerous entities within their organization was a strength, and for those who could financially attain it, it was a necessity. However, this practice has dramatically changed. Now, corporations try to keep their on-premise resources efficient, and outsource their needs when they can. Currently, it is crucial for businesses to develop strategic partnerships with other organizations in order to be successful. That being said, it is tremendously important to differentiate just any partnership from strategic ones, as the latter takes a great deal of additional effort and analysis. So why has this significant shift taken place? What are the benefits of strategic partnerships?

Specialization

There is no denying that specialization leads to economies of scale. With individual businesses focusing on where their strengths are, and allowing others to do the same, they can gain additional benefits with less effort. This means that organizations become more efficient in their tasks, increase their output and enhance their knowledge in the required fields. This makes them a strong candidate for other companies to use them as a strategic resource, and they themselves can outsource certain skills from elsewhere.

Payment Options

A crucial component of strategic partnerships is the immense amount of money partners save when combining forces and resources. When outsourcing certain skills, businesses are able to benefit from cutting-edge technologies without needing to invest in the large amounts of equipment, labor and maintenance that they would have if they had to host these entities themselves. Instead, they can save money and benefit from their partners’ payment options, such as pay-as-you-go pricing models.

Enhanced Value Creation

In management, there is a simple equation that 1+1 equals 3. This means that businesses create more value when they work together, compared to when they work separately. This is due to the fact that partners share their costs and expenditures, and increase their savings, while also sharing their knowledge and assets in order to enhance their resources.

Single Force

Although counterintuitive, the most powerful partnerships are those that resemble a single entity. Regardless of the fact that the value they provide as a team is more than what they would create individually, partners must strengthen their relationships to an extent in which their unity and cooperation forms a single, strong and motivated force. 

Flexibility

Unlike in traditional partnerships, when unforeseen events take place or when technologies evolve, businesses in strategic partnerships work together to adapt new norms, and adjust their plans, in order to continue their path towards success. Instead of sides controlling one another, or lagging behind because of the other’s lack of willingness to change, businesses in the partnership collaborate, and design effective plans that work for both sides in order to thrive.

Given the magnitude of importance that the aforementioned benefits have, the most important fields in which businesses must form strategic partnerships are those that have the largest influence on other parts of the business. By building effective links among these fields, the entire business can benefit, and it will facilitate creating strategic partnerships other segments of the company. These fields are the following:  

  • C-Suite Executives
  • IT and Technology
  • Budget and Finance
  • Operations Managers
  • Sales Managers
  • Customer Service Managers
  • External Stakeholders

At CoreAxis, we recognize the importance of strategic partnerships, as well as the benefits they yield. To that end, we provide innovative custom solutions with which our clients can understand their needs, choose their partners wisely, set effective terms to their deals, efficiently manage their partnerships and reach their optimum level of success. We do so by using innovative technologies that engage the existing skills and strengths of our clients.

Resources:

  1. https://blog.pandadoc.com/strategic-partnership-agreement/
  2. https://hbr.org/1994/07/collaborative-advantage-the-art-of-alliances
  3. https://medium.com/@neemz/a-framework-to-making-strategic-partnerships-work-7983b361aaad#:~:text=Strategic%20partnerships,-The%20term%20strategic&text=We’ll%20define%20a%20strategic,generating%20new%20ideas%20and%20innovations.
  4. https://www.business.tas.gov.au/manage_a_business/tax/choosing_a_business_structure/partnership_advantages_and_disadvantages
  5. https://www.imd.org/research-knowledge/articles/strategic-partnerships/
  6. https://www.informdirect.co.uk/business-management/partnership-business-advantages-and-disadvantages/
  7. https://www.investopedia.com/ask/answers/051115/how-does-specialization-help-companies-achieve-economies-scale.asp#:~:text=Specialization%20Leads%20to%20Economies%20of%20Scale&text=The%20more%20they%20focus%20on,the%20production%20of%20more%20goods.
  8. https://www.masterclass.com/articles/introduction-to-economic-specialization
  9. https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/improving-the-management-of-complex-business-partnerships
  10. https://www.researchgate.net/publication/270682273_Strategic_Partnership_Potential_for_Ensuring_the_University_Sustainable_Development

About CoreAxis

CoreAxis is a business performance consulting company that offers training solutions to businesses in a variety of industries, such as financial, life sciences, retail and technology. Each of these solutions can be fully customized to meet the needs of the individual client. We build collaborative relationships, becoming a trusted resource and ensuring our clients’ organizational success.

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