# Building Successful Corporate Partnerships

## Building Successful Corporate Partnerships

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Strategic Partnerships – Building Successful Corporate Partnerships

The worlds largest online marketplace, Ebay, overcame their logistical and operational concerns expanding into the African continent by partnering with the Nigerian ecommerce platform MallForAfrica. African customers can now purchase goods from eBay via MoreForAfrica. And the partnership has reportedly lead to significant boost in revenue for both companies.

In this Insight, we’ll discuss strategic corporate partnerships and give you pointers on how to initiate and manage them for your company’s benefit.

What is a strategic partnership and how can it help your business?

A strategic partnership is engaged when two or more parties companies agree to share information, expertise or resources to work towards a common goal. In most cases, such partnerships are ratified by either contract or a memorandum of understanding. Strategic partnerships between companies are called corporate partnerships, but its worth mentioning that strategic partnerships can occur between a variety of institutions and individual persons, such as NGOs, influencers and government departments.

Entering into strategic partnerships should always be approached with caution, because while designed to deliver mutual benefits, they present business risk. Mismatches in culture and brand identity can lead to a waste of your precious time and resources. But with the right partner on board, your business can benefit in various ways. For instance, a partner might help you open up new revenue streams by enlarging your product of service offering. They may present new distribution channels for your products to help you reach more customers; give you access to new technical skills and capabilities. They can help you minimize your research and development costs, and partnering with a respected brand can even increase your credibility in the marketplace.

Different types of strategic partnerships

Let’s discuss some of the different types of strategic partnerships you might engage.

Marketing Partnership

Marketing Partnerships focus on sharing resources to market your product or service. For example, you can partner with a popular sports team by paying a sponsorship fee for their players to wear your logo on their uniform, and get your brands in front of hordes of their ardent supporters.

Supply Chain and Technology Partnership
Supply Chain Partnerships are when two or more organizations handle different parts of a supply chain to deliver an end product. Often, such partnership involve the use of some kind of technology. For example, you might be surprised to learn that some of the key components in the Apple iPhone are made by one of Apple’s biggest competitors, Samsung. Samsung and Apple boast one of the world’s most lucrative supply chain and technology partnerships within the mobile device manufacturing industry.

Financial Partnership
Financial Partnerships occur when your core financial management function is managed by an outside specialist. Smaller startups who lack the time and expertise to handle their own accounting or tax find such partnerships indispensable.

How To Assess A Potential Strategic Partnership
Before engaging in a strategic partnership with another organization, you must be able to make a solid case for mutual benefit. Asking the following questions will help you determine if a strategic partnership is worth pursuing.

What’s in it for you?
You must have a clear idea about how your business will benefit. You need to know which metrics this will improve, and how a partnership will fit into your overall company strategy. If you have a hard time establishing this, pursuing partnerships may distract you from meeting your fundamental objectives.

The next fairly obvious question is:

What’s in it for them?
Take time to put yourself in your perspective partners’ shoes to assess if your proposition to partner is attractive. If the benefit is one sided, don’t bother approaching them.

What will it cost you?
Be sure to calculate what partnership, in any form, might cost your company in financial terms, and work out how your company’s bottom line and that of your potential partners’ will be impacted.

What resources are needed to execute?
Apart from finances, partnerships require the diversion of energy and time from other tasks to service shared ambitions. Will you need extra hands on deck or perhaps need to invest in additional assets to deliver on your end?

And lastly, you need to ask yourself:

What contribution, in terms of resources and support, your perspective partners would need to make for partnership to be worthwhile?

Managing a strategic partnership
Much can go wrong once the ink on a partnership agreement dries. The partnership can fall apart under the strain of unforeseen practicalities. While you can’t anticipate for everything that can go wrong, there are steps you can take to increase the odds of a partnership being a success.

The Road Map
You need to create a Roadmap Document to govern any partnerships you plan to engage in. The document must describe the current situation the partnership seeks to improve, outline how the partnership will be formed, and state the goals the partnership aims to achieve.

The document needn’t be long, but it must include important aspects such as partnership type and the name of the various parties involved, the duration of the partnership, key objectives and performance indicators, the specific responsibilities of the parties, all shared financial arrangements, and list any legal or regulatory provisions.

Developing An Action Plan And Tracking Progress
Once the Roadmap is drawn up, you need to draft a short action plan showing the key actions each party needs to take in order for the partnership to deliver results, to agreed deadlines. The Action Plan is a working document, which should be updated on a regular basis.

Anticipating Obstacles
Even with the best Roadmap and Action Plan in place, things can and often do go wrong. For complex or high risk partnerships its worth obtaining legal advice to help you draft a watertight agreement.

Exiting Gracefully
Sometimes partnerships fall apart despite all your best efforts. If a partnership is not working the way you hoped, acknowledge the fact and try not to burn your bridges as you remove your company from the alliance. It’s a small world and future partners may request references from your past allies to help them decide if they want to work with you in the future.

:)

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