How to Form Successful Alliances
An alliance is a strategic arrangement between independent firms that share common goals for their mutual benefit. Businesses in an alliance agree to share technology, develop products together or market each other's products. Firms rely on alliances to strengthen their positions in the market, access raw materials, enter new market territories and achieve growth.
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Instructions
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Determine a clear purpose for the alliance, and write it down. Define what each partner will bring to the relationship and the benefits that will accrue from it. There should be a clear rationale as to why the alliance is being sought.
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Locate a partner with whom there are well-matched but non-competing goals. The best associations are formed between parties who can derive some benefits from each other. For instance, a pharmaceutical manufacturer would benefit from an alliance with an advertising agency -- enabling the two firms to complement each other. Alliances between two competing firms, who eye each other with suspicion, can never hold.
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Allocate responsibilities to each party. This will ensure that each side focuses on what it does best. Capitalize on the strengths of each firm in a way that they override the weaknesses of the other, and vice versa. One party should not dominate the other. Set goals and objectives that each side must focus on, to achieve the initial common purpose.
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Create opportunities for both parties to work together, because alliances should not be competitive. Foster a positive working relationship, especially when two firms are former competitors. Initiate joint projects where the parties can work together effectively and thus strengthen their alliance.
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Assign personnel from both firms to help coordinate the alliance. Firms that do this usually enjoy more success than those without an alliance coordination team. A strategic alliance team must have a leader and support staff, and each firm should allocate resources to it -- continuously building their capacity to manage the alliance.
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Tips & Warnings
When forming an alliance, consult a legal expert to draft the agreement. This helps in outlining the nature of the alliance and discouraging any disputes in the future.
