Alliances can be used to achieve many kind of benefits for organizations. In the latest Alliance Conversation we heard Mike Nevin warn us for the fact that it is a statistical fact that in times of recession more companies go bankrupt when coming out of the crisis rather than going into, or during, a crisis. When coming out of the crisis companies fall back to earlier models of build and buy. They either have the money and buy some companies to grow their organization or don’t have the money and grow the normal way. There is a better way and that is to think creatively, think outside the box, and look at the ally model as a way to quickly grow the organization.
Sohm India followed the ally route and signed up for a partnership with a pharmaceutical manufacturer in Himachal Pradesh, India. This is a nice example, Sohm India may have been in a position to build up production capacity themselves but chose to partner instead. The expected returns of the alliance for Sohm are that it is expected it will allow them to double its pharmaceutical production capability, reduce costs by 6%, and increase profitability.
In a different industry AirAsia and Jetstar team up to lower cost. These companies look to “jointly procure the next generation of narrow-body jets, cooperate in handling of passengers in Australia and Asia, pool aircraft components and spare parts, and share engineering and maintenance services and supplies.” Which will allow them lower fares and enable more people to fly, bringing growth to either party.
Now both of these examples are for commercial organizations, however even if you are running a non-profit organization the instrument of alliances can help you grow your organization. However you define growth for your organization!
Think outside the box: where is your area for growth through alliances?