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By BARBARA LEWIS and DAN OTTO
In today's economy of rapid change, many entrepreneurs will consider partnering as a source of competitive advantage.
Unfortunately, research indicates that as many as 70 percent of all strategic partnerships may not work. If strategic partnerships can provide your company with a competitive advantage, and yet statistics reflect a high percentage of failures, how can you ensure that a needed partnership will be successful?
The answer is careful investigation in a number of areas so that an optimum "fit" will occur.
A solid partner relationship should be symbiotic one in which both parties benefit not parasitic. You're not looking for a 900-pound gorilla that is so strong on every front that it will overshadow and potentially consume your business. And you're certainly not going to team up with a 90-pound weakling that you'll have to carry into the unforeseeable future.
Your objective is to find a match that complements your strengths and fills in for your weaknesses. When selecting a strategic partner, there are several factors to weigh. Take a hard look at the following characteristics of your potential partners and your own company:
- Long-range goals and strategic intent. Where do you want to go, and will your potential partners join you for the ride?
- Market share and growth rates. Judge them within the contexts of expansion of products into new markets and new products for existing markets.
- The value chain. This includes every process and operation, from marketing analysis through manufacturing and servicing.
- Infrastructure, which includes support functions such as organizational structure, human resource management, finances and control.
- Personnel, in terms of their backgrounds, style, reputation and, most importantly, the chemistry between major players in the partnership.
After gathering the information listed above, you will probably have a gut reaction on certain partner choices. Resist the temptation to end your analysis at this point; we favor making decisions with analytical tools.
There will be far more than five criteria on which you will base your decision. Remember, the operative word in choosing a strategic partner is "strategic," and no effective, long-term strategy was ever formulated with the words, "I feel like ..."
To start your analysis, you need to examine your company to determine weak spots in which a strategic partner can add value. We have found that a graphic representation of this process makes decision making easier.
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