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Strategic Alliances—Pitfalls and Perspectives

Have you ever been involved in a Strategic Alliance that wasn’t completely thought through on the part of one or more of the companies involved?Most “partnership” agreements in our industry leave something to be desired. To many manufacturing executives, forming a strategic alliance makes sense because their sales or service representatives call on the same customers and they see a way to optimize the costs of personal customer contact. For those involved in executing the partnership, there are a great number of things to consider and accomplish before moving forward. With hollow execution on either company’s end, there is a big risk in diluting the strength of companies brands and as well as diverting the sales and service representatives’ attention from making calls on their core business. For the customers, many times they are struggling to find the value-add.
Before joining forces with another company, think through the market strategies… from point of sale, through the sales process and then the service aspects.
Could Partnering with a Complimentary Supplier be Good for Your Business? Maybe. First, consider how the partnership will affect your customers from the first interaction. Does your approach make sense to them? Are your sales and service teams aligned with the decision, enthusiastic about the additional product offering? Do they consider it a great benefit to the customer? Will they be committed to training and be able to represent the additional technology to a point that it will be helpful to the customer? When they engage in the sale, will the customer be handed off to the other company or retain the original sales contact (and what would that mean in terms of quotes, purchase orders and invoices)? And finally, when it comes to shipping, installation, setup and maintenance… define where your sales representative is involved and where they are not and make it simple for the customer to understand.
Success Lies in the Implementation. If a strategic alliance is not communicated or executed well, it could become more harmful to your brand than helpful to your margins. From the customers’ point-of-view, does your decision to align help them and make sense to them? If not, don’t communicate it… just form a sales referral agreement. Tread cautiously when considering joining forces. Develop your agreement and plan with the long-term outcome in terms of the market, your brand and the customer in mind. 
When great care is taken in forming a strategic alliance and it is executed and communicated well, it can increase sales and provide you with happier, more satisfied customers.

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