Today the business environment is very competitive. Organizations need considerable financial strength and constant innovation to both survive and thrive. It may be a wise move for firms to partner with other businesses to stay competitive and boost business prospects. We look at the benefits of doing the same.
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Increased strength and credibility – When companies partner with other successful businesses, their strength in different domains improve. There are increased financial and human resources available. Stronger marketing campaigns and better infrastructure can be realized. Increased market presence and business visibility becomes stronger. Most customers place their trust in companies which are reliable and have the capability to stay in business long term. Banks also prefer to extend credit to those companies which are financially sound. Ultimately, more customers translate to better financial and business growth.
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Strengths and weaknesses are complemented – Every firm has strengths and weaknesses. Your firm may be strong in areas which other companies are weak in. Also it may be weak in certain areas which other firms are strong in. Strategic business partnerships have the potential to strengthen weak areas and reinforce existing business strengths. This eliminates the need to invest money, time and effort in weak areas.
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Acquire technological and functional know-how– It usually takes a long period of time, research and effort to develop in demand technologies and acquire various industry vertical experts. A smart business move is to partner with companies that have the requisite expertise. Doing so saves time, money, business domain and scientific resources. Your firm will become more competitive in the market as it possesses the latest technology and in-depth functional knowledge.
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Obtain a different business perspective – Other firms may have different business experiences or may be operating in different markets. Partnering with such companies result in getting different business insights and ways of doing business. The management staff of other firms may give your firm knowledge of new, different and unique ways of running business.
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Expand into other geographical domains – In order to gain entry into markets of countries which your firm is unfamiliar with and which have different business environments, language and people preferences, it makes sense to partner with a local company. Then your firm need not going through the initial struggle of familiarizing with and understanding foreign conditions. It can focus on its core business areas right away.
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Obtain a reputed brand image – Your firm may be delivering the best products/services in the market today. However, either customers may not be aware of this fact or are wary of using a new or unfamiliar brand. Partnering with a firm that has a built up brand reputation is a shortcut that does away with the usually long and arduous process of new brand development.
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Acquire new capabilities – If you have a great business idea but lack the money to bring it to life, it is a logical move to partner with a business which has the necessary funds. Similarly if your firm is cash rich, you could partner with business ventures which possess business ideas with great market potential.
Ultimately you need to be very clear about your expectations from a potential business partner and evaluate whether there exists compatibility, shared business values and long term partnership prospects.
