Effective partnerships between companies, with customers and with suppliers create greater value for all concerned.

Synergy

Synergy is the power behind business partnerships.

In a business partnership, two parties leverage their assets (resources, capabilities, expertise, client base etc.) for the mutual benefit of both.

Why Partner with Others?

Meaningful partnerships are the foundation for success. Partnerships is what enables many companies to re-engineer their business effectively and quickly as as well as to make improvements.

By sharing with others, you can direct your resources and capabilities to projects you consider most important.

The 80/20 Principle asserts that 80% of results come from 20% of effort. Thus, to achieve more with less, you must be selective, not exhaustive. In every important sphere, work out where 20% of effort can lead to 80% of returns. Strive for excellence in the few key areas, rather than for good performance in many.

Focus your firm's resources on what you do best and what creates sustainable competitive advantage and tap to the resources of others for the rest. To decide why, when and how to partner with others for complementary resources, weight the small amount of cost savings that doing non-core-competence tasks might bring against the distraction and investment that will be required to stay up to date over time.

Growing Role of Partnerships in the New Economy

In the new knowledge economy, the principles of business strategy are being transformed. Instead of a focus on physical assets and economies of scale, the drivers of success reside in connectivity and intangibles. Businesses increasingly need to develop and manage complex ecologies or organizations around themselves so as to succeed. The selection of strategic partners with whom to collaborate is now becoming a life or death issue for most firms.

Barriers between companies, which used to be solid and absolute, are now permeable. "Iconoclasm and creativity are now the keys to success", writes Mark Stevens, the author of Extreme Management. "For generations companies built moats between themselves and their competitors. Today the most successful companies build bridges. And that's only the beginning". Virtual integration became a norm.

Example: Toshiba

Toshiba’s approach is to develop strategic alliances with different partners for different technologies because a single company cannot dominate any technology or business by itself... More