Many of the examples of strategic alliances that are widely available are the examples from large organizations. Also in this blog we discuss for instance elements of the Senseo alliance between Sara Lee and Philips and I mentioned the Novartis Malaria Initiative. When you start searching for alliances in Pharma or in IT you will be able to find many large organization examples. Small business examples are more difficult to find, often probably also because small businesses do not have the budgets to create PR around their alliances like the large companies do. So let’s have a look at an example very close to my heart:

A small business example
Phoenix Simoons partnershipWhen I started as a solo entrepreneur I set up Simoons & Company in the format of what I called a network organization. Basically the company exists of myself and a virtual assistant. However some projects ask for a larger capacity or different expertise. For that I work with some trusted partners in a strategic alliance that I can hire as partners in a project. With a few the level of collaboration goes a bit deeper and we do our own sparring on proposals and joint business development. There is one partnership that I would like to highlight here that goes deeper and can be seen as a small business strategic alliance.

Following the alliance lifecycle
Back in 2010 when I was planning to bring alliance management workshops to the European market I made the strategic choice to partner and not to develop it myself. Basically step 1 of the Alliance Lifecycle. I did my research on potential partners (step 2) and established a partnership with Phoenix Consulting Group in California to be able to deliver the alliance management workshops they already had developed in the European market. The value proposition entailed that Phoenix gained access to the European market without the need to build it by themselves. I gained access to an excellent set of workshops for alliance management certification. Customers in Europe gained easier access, without the need for extensive travel, to alliance management workshops that would prepare them for the professional certification in alliance management.

We discussed how we wanted to approach our alliance (step 3), negotiated a contract (step 4) and started to work (step 5). As we both are small businesses the steps were on the lighter side than they will be with large corporations and with large alliances. However we followed the alliance lifecycle and made sure we made solid decisions. After two years into the alliance both parties are still happy with it. What started as a knowledge transfer and market development alliance is strengthened into a closer collaborative relationship where we have done joint delivery of workshops and are now finalizing a joint developed next educational product that will soon be launched.

My ebook “Successful Partnerships & Strategic Alliances” provides a more in-depth introduction about creating and managing partnerships and alliances.

8 Responses to “Strategic Alliances: A small business example”

  1. Thanks for this excellent article Peter. I’m actually doing some research on strategic alliances for SMBs and it’s surprising how little information there is on the subject, especially as open and clear as your posts.
    I was wondering, in your opinion what are the biggest challenges SMBs face in forming strategic alliances?
    Also, do you think there are specific industries and/or business models that are better suited for strategic alliances than others?
    Looking forward to hearing your insights.

  2. How often do you delegate rather than partner with people outside of your company in order to save time? It seems that it would be a great time saver to delegate down the line rather than bringing too many people to the management table.

    • Peter

      Good question Matt. Actually working on that as I know that delegating or outsourcing can save me valuable time and will allow me to focus on my core competencies. Just had a great experience with a text editor, she is fast, secure and saved me weeks in time.

  3. Thanks for sharing, Peter: I think alliances among small businesses are very important, especially for countries with so many small businesses, like Italy, and for emerging, innovative economies or business environments where some new ideas thrive through small companies first. 

    They are so important because, in my opinion, alliance stories among small businesses are truly fewer than similar stories about larger businesses; there is really fewer of them, beyond the fact that there is less communication capability to spread the word.

    What may be the reasons to have fewer alliances among small businesses than among larger ones?
    My experience with small businesses is much more limited than with large ones, still I have the  good fortune and great opportunity of contributing to an association of small ICT businesses in Italy where we have also discussed alliances. Based on this limited experience, I think there are two main reasons.

    On one hand, small business seek simple, standard, easily manageable business models to leverage. If we consider alliances as a way to grow business through new markets, or new channels, or new products, then a small business can use a distributor or reseller channel model instead of an alliance for most of this. We can argue that a channel model is better known among enterpreneurs and managers, and likely easier to replicate and manage than one alliance – let alone a few!

    On the other hand, I feel that some of the small businesses I am familiar with are more comfortable with clearly distinct roles among companies: either our businesses compete, or one is channel for the other. The owners and managers of these businesses are probably less comfortable with the more overlapping roles of an alliance: a bit of cooperation, a bit of competition, some joint solutions among others that are distinct or downright competitive…. surely this is more complex to deal with, especially as it requires sharing that most important of assets that is knowledge of our own customer portfolio, sometimes even contact with our customers.

    This in fact is what makes stories like yours especially interesting.

    I think I know of another valuable example: I see it as an international network of small businesses that cooperate across countries to provide services to each other and each other’s local customers. I believe this qualifies as a many-to-many alliance, over and above a channel relationship with each company being the local channel of all others. I am soliciting their contribution to this discussion and look forward to them sharing more detail.

    How do you think this network compares with the definition of an alliance?
    What other small business alliance stories can we share?

    • Thanks Gianluca for your response! The international network of small businesses as you mentioned could be called a collaborative network and especially on specific topics it does make sense to create and work together in such a way. The larger challenge will be to make sure every new small business fits into the network in the right way with similar culture, values and quality.