Alliances are an increasing important strategic way to help organizations grow. In 1998 Yves Doz and Gary Hamel already wrote “No Company can go it alone” as the opening statement of their book on strategic alliances. Today this is more applicable than ever.
Since they wrote their masterpiece a lot has happened in the world. Communication technologies over the internet have increased reachability and the world has become flatter than even Thomas Friedman anticipated. China is virtually next door nowadays. That combined brings new competition and new opportunities that you would probably not have expected five years ago. Amazon is a good example from an organization who knows to leverage these new opportunities and became an unexpected threat for local companies. For a long time local booksellers did not see online bookseller Amazon as a serious competitor. Times have changed, and today Amazon is no longer just a bookseller: they are a global online retailer with a broad portfolio and a competitor to many.
Driven by the economy, companies are careful with investments and reluctant with acquisitions. When asking the question “make, buy or ally” when it comes to a growth strategy the ally option might be more viable then ever. Would alliances be an option for every growth question? Before we can answer that question we need to have a look at the definition of alliances.
The definition of strategic alliances is:
“A strategic alliance is a strategic cooperation between two or more organizations, with the aim to achieve a result one of the parties cannot (easily) achieve alone.”
A strategic alliance has per definition its focus on the long term, partners will contribute part of their resources to realize the success and will in exchange receive part of the control and benefits from the alliance.
When establishing alliances it is important to look at contributions and returns of an alliance. Hence alliances will only be an answer to your growth question when you are contributing to this alliance too. A pure sales transaction does not fit the definition of an alliance. You will be contributing as the seller and you will receive the benefit of the revenue, but it is transactional and not longer term focusses. Also nothing is generated that you could not achieve alone.
Read more in my ebook “Successful Partnerships & Strategic Alliances” about creating and managing partnerships and alliances.