Imagine your business reaping the benefits of an asset, product, expertise or service that you don’t currently have.
Fortune 500 companies have been doing it for years. It’s known as a strategic partnership—a mutually beneficial contractual alliance between two businesses—and it can give entrepreneurs a competitive edge and help them increase the bottom line in innovative ways.
Bigger companies have more resources than smaller businesses. Strategic partnerships can help them compete effectively with larger firms by leveling the playing field. Partners can share marketing, advertising, product development, branding, sales, HR and tech, as well as other functions.
Business owners also can establish mutually beneficial relationships with suppliers, vendors, banks and credit card companies to better serve customers. For example, FedEx Office offers products, services and convenience that can help small businesses develop and grow. You can use the company's direct-mail services, flyers, brochures, signage, banners and business stationery to bolster the branding and efficiency of your business.
There are many ways to take advantage of strategic partnerships. You might get a better price for supplies by combining with another business to order in bulk. You could launch a joint-marketing campaign with a noncompeting business, leverage an asset controlled by one of your vendors or license technology.
Here are some examples of strategic partnerships to give you ideas.
Instagram and Hipstamatic
"When we launched, it was all about Facebook and Flickr and Twitter, and now we're seeing a huge shift in our user base toward Instagram," says Hipstamatic co-founder and CEO Lucas Buick. "We've never been a social-networking company, but we clearly benefit from social networks. So, this will be the first app outside of Instagram that lets you into their network. That's pretty cool for us."
Banks and supermarkets
Many consumers find going to the bank to be a tedious chore. So banks looked for convenient locations with considerable people density and flow.
"If Kroger is spending $4.8 million to put a store in town, they've made sure this is a good spot," says William R. Reed, vice-chairman of Memphis' National Commerce Bancorporation, whose three banks have 39 branches in grocery stores.
Spotify and Facebook
Spotify, the successful music-subscription service, partnered with social media giant Facebook and discovered the alliance boosted revenue. Spotify users who link their account to their Facebook account are three times more likely to become paying subscribers than those who don’t.
Spotify is seeing explosive growth since the partnership started (a quarter of a million new users daily).
Benefiting from partnerships
If you’re not benefiting from strategic partnerships, take some time to think about how you can develop ones that enable new ways to build and run your business. Developing strategic partnerships can take your business up a notch and allow you to compete with Fortune 500 companies.
Anthony Sills is a South Jersey freelance writer who contributes to publications and sites such as The New England Job Show, “The Historic Westside” and Green City Times. He is currently working on his first book. He blogs for Contently.