No matter what your industry or the size of your company, business today is complicated and as the impact of the global economy on success grows it is likely to grow more complicated. Customer needs and expectations are growing, whether it is product performance or systems speed and capacity customers are asking for more and more. Companies like Amazon have increased customer expectations and driven a change in demands at an almost unprecedented speed. Businesses are realizing that the journey cannot be handled alone and many are reaching out for partners with an aim to strengthen the financial supply chain and meeting growth objectives.
While the most important aspect of a strategic partnership is the ability to leverage the specific strengths of both companies to enhance each other, there are a variety of different ways to get there, depending on the purpose of the collaboration. There are even consulting companies that can help make the match. One such company, Powerlinx, recently called the “eHarmony for business” by VentureBeat.com, provides a platform that offers service to businesses of all sizes, in almost any industry anywhere in the world. Powerlinx’s platform allows B2B, small and midsize businesses to easily find strategic partners. The company offers services for a range of business types, including consultant, distributor, import/export, warehousing and logistics, manufacturer, retailer, service provider and wholesaler. The company quotes:
“In a recent study, more than 75% of executives said strategic partnerships were vital to their growth but nearly half said they had trouble finding and connecting with the right strategic partner.”
In a world where technology is driving business, it is also driving how businesses are interacting with each other, forging B2B relationships in new and cutting-edge ways where the traditional business model would not allow. These types of consultancies and this type of software can utilize data to identify and connect the right strategic partners depending on the company position and purpose. While some strategic partnerships are built to leverage a product like a Mastercard or a Visa virtual card, others are looking for partners in research and development, sales or supply chain.
Like many businesses, the success of WEX is hinged upon strategic partnerships. With an expertise in payment solutions and systems, our goal is to partner with and help organizations transition to safe, secure, electronic payment systems designed to lower cost, mitigate risk and optimize administration, along with buyer/supplier collaboration.
WEX offers services to a variety of industries in order to provide the expertise that those companies would not otherwise have. Complex corporate payment solutions come with enormous responsibilities that could make or break a company, our partners rely on our expertise in this area. In addition, these relationships are mutually beneficial, strengthening both companies over time. The corporate objective of any strategic partnership is to share resources, positioning, and sometimes brand equity in a way that promotes mutual growth.
With a deep understanding of the category, Powerlinx has outlined the 5 most common partnership based on purpose. These categories should be carefully considered when looking at a partnering strategy.
Conducting research into new or improved products and services requires monetary investment, time, worker capacity and, in some cases, specialized equipment. To conserve resources and therefore mitigate the risks associated with R&D investments, some businesses choose to partner around shared research objectives.
- Joint research & development departments
- Co-application to government research grants
- A financially secure company offering funding to an organization with specialized research capabilities in exchange for intellectual property rights
2. Strategic Integration and Referral Partnerships
Strategic integration and referral partnerships generate passive channels of customer acquisition. Through such arrangements, businesses agree to refer customers to their preferred partners. In many cases, especially today in the digital age, these partnerships are accompanied by integrations that allow customers to transfer their information between the business’s offerings.
- Computers shipping with pre-installed third-party software
- A customer relationship management software offering integrated access to a conference calling service
- A movie theater offering popcorn and refreshments branded by their integration partner
Through cobranding, two or more manufacturers or sponsors produce an original product or service that is then offered under all of the partners’ names. Cobranding allows businesses to expand their brand recognition to new customers while offering existing customers a new way to experience their products or services.
- Dual-branded Betty Crocker-Hershey’s cake mixes
- Corporate event sponsors
- The Chase/United MileagePlus Explorer credit card
4. Strategic Sales Partnerships
Similar to referral partnerships, strategic sales partnerships exist between manufacturers and businesses with the capacity to resell goods and services. What differentiates strategic sales partnerships from referral partnerships is that a resell partner receives payment in exchange for their referrals, typically as a percent of the revenues generated or on a flat, per item sold basis.
5. Supply Chain/Channel Partnerships
Supply chain partnerships, also known as channel partnerships, occur between buyers and sellers at every level of the supply chain. Participants in supply chain partnerships include manufacturers, distributors, retailers, raw goods suppliers and more.
Through channel partnerships, businesses move their relationships beyond one-off buying and selling transactions and develop methods of collaboration to create more stable and efficient supply chains that lead to increased sales. Channel partnership agreements allow for the open sharing of sales information, pricing data and best sales strategies.
Strategic partnerships are essential in growing business and should be carefully considered and evaluated for pros and cons. Whether the partnership is a product that will help to strengthen your financial supply chain or full-service expertise in corporate payment solutions, the relationship will be invaluable. The only way to get ahead and meet the demands of the growing global economy is to recognize what you don’t know and forge a strategic alliance with someone who does.