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Strategic partnerships are critical to growth. As every industry is transformed by digital technologies, this trend is accelerating.
You can choose to evolve your business on your own or go in together with partners. Such collaborations will help you:
- build new business models
- bring in new competencies
- harness the power of ecosystems.
Race to partner
Alliances and partnerships have always been central to business and politics.
Yet in recent years, the growth of partnerships has taken off, driven by the benefits of:
- risk sharing and resource pooling
- technology convergence
- industry deconstruction (from linear value chains to industry value networks)
- knowledge diffusion.
Examples of successful partnerships
The best companies in the world rely on partnerships. As the CEO of Microsoft, Satya Nadella, put it:
“We fundamentally wouldn’t exist as a company if not for the partner ecosystem taking what we build, adding value to it and then, most importantly, jointly being as obsessed about how do the outcomes of it help the world get better one business at a time, one community at a time”
Nadella’s strategy to make partners the number one priority of Microsoft is a message that he has constantly reinforced since replacing Steve Ballmer as Microsoft’s CEO in 2014.
And it’s helped engineer a remarkable turnaround. With some 300,000 partners globally having a hand in 95 percent of Microsoft’s commercial revenue, Microsoft success hinges on the partners.
Fighting the pandemic
The importance of partnerships cuts across sectors. Pharmaceutical and biotech companies have been setting the pace for a long time.
COVID-19 led to multiple global alliances and company partnerships between companies critical to developing and manufacturing effective vaccines and treatments.
Volkswagen’s many strategic partnerships
In the automotive industry, to overcome the challenges of developing complex self-driving cars, players form extensive partnerships with tech companies and even competitors.
Volkswagen has an extensive portfolio of alliances (see illustration below) with companies such as Ford, Daimler, Microsoft, Apple, TomTom, Huawei, and various smaller, specialized tech companies for projects such as boosting their AI, cloud, mapping and connectivity.
Spotify and Uber create a unique customer experience
Partnerships are also an effective way of gaining a competitive edge. Uber’s strategic alliance with Spotify enables Uber customers to stream Spotify playlists in the ride.
Uber is able to offer a more personalized experience, and Spotify encourages Uber riders to subscribe to Spotify Premium. Uber’s competitors don’t offer a similar personalized music experience, so this provides a clear competitive edge.
Newer companies and startups often form compelling relationships with larger players. This can be the beginning of a strategic investment, or just a way for more established players to offer innovative solutions to their customers. A new trend of developing a platform of solutions for SMEs to tap into has led to active partner strategies at the enterprise and startup levels.
Challenges of forming partnerships
But forming strategic partnerships is no easy task. Once you run out of your professional networks and land on the cold call terrain, just finding the right person is a minefield.
“There is a massive need for a partner to deliver strategic partnerships”, explains Critical Future CEO Adam Riccoboni, “This is why we formed our Strategic Partnership Practice”.
The Practice has a stunning success rate working across vertical markets.
Case studies include:
Saas to big tech
AI as an ecosystem
Medical device to reimbursement partners
Success factors
“Learning how to collaborate with partners and build ecosystems is one of the most critical, yet underdeveloped, skills of executives in the 21st century.”
INSEAD Business School
Mission and objective
What do you want to achieve? Objectives might include:
- a SaaS company wanting to align with big tech for strategic investment
- medical device manufacturers seeking partnerships to influence stakeholders towards reimbursement
- tech product companies seeking partnerships for distribution to SMEs.
The first mission is to be clear on the mission
Partner identification
With the end in sight, the right partners must be identified. Setting up partnerships takes time and effort, so you need to choose the right profile from the outset.
Value proposition development
It goes much further than just pitching a big company with a new idea. Each potential partner has a unique value proposition. You need a strategic consulting mindset, competitive positioning and your own value proposition.
Search, screen, select
The strategic partnership world may seem huge and intimidating, but actually many of the key influences fall within a couple of hundred people.
A specialist like Critical Future, with existing relationships with Heads of Partnerships in your sector, will save you a mountain of work and lost resources.
Making partnership work
To make a partnership work, you need cultural alignment and commitment. Critical Future can support you to form partnerships that last.
Continuous improvement
Partner programmes and ecosystems establish a feedback community.
Our programme managers ensure each organization provides feedback, improving each other’s offerings and leading to greater growth and credibility for all.
The key to successful partnerships is to ensure that they are built on:
- Trust
- Commitment
- Collaboration
- Communication
Critical Future can make your partner plans a reality. Get in touch:
Strategic Partnerships Contacts
Providing expert advice and solutions
Building partnerships & long-term relationships
Understanding your business needs