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The Good, Bad and the Ugly of Strategic Alliances – Part 1
"Partnering has proven itself one of the most powerful business tools for dealing with fast changing markets, technologies and customers. As the global economy speeds up, partnering is becoming the weapon of choice for today's successful competitors." Curtis E. Sahakian
Strategic alliances and informal partnerships can facilitate an expansion or strategic change in direction. For small and mid-sized businesses in particular, partnerships offer a great way to grow organically without incurring major financial debt. Collaborations are usually rather informal and allow for the independent operations of each party. During tough economic times, these relationships can be more important than ever.
When smaller companies align with larger ones, the smaller entities must conform to the processes and systems that larger corporations demand of their partners. Although this "David and Goliath" model is often a disaster, it can be very successful. Especially so when large companies contribute the marketing muscle to open relationships and opportunities that small organizations can't do on their own. In exchange, smaller companies bring more flexibility to product development than their larger counterparts. Thus, each partner recognizes the benefits and commits to the relationship.
Smaller businesses that partner with other small to mid-sized companies in a more even playing field, enjoy a higher degree of success. There are fewer demands of one company over another, and the power parity makes for a smoother and more equitable relationship.
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