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Strategic Partnerships: Basic Forms and Characteristics

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In an environment of constant change and uncertainty, strategic partnerships are a powerful tool to support business. How and why is this achieved? What are strategic partnerships? What are the criteria of their effectiveness, and what are the forms and characteristics of strategic partnerships? Let's deal with all these questions in order.

So let's start with the basics. Strategic partnership is a mutually beneficial cooperation of business entities on the basis of combining different resources and mutual coordination of activities to achieve economic effect, which, in turn, can be achieved through synergy.

Consequently, achievement of synergetic effect, stimulation of synergy of partners, and also increase of competitiveness aimed at promotion of products or services, both inside the country, and abroad, and as a whole, increase of efficiency of activity of each subject of partner relations, are the key criteria of efficiency of strategic partnerships.

For a more complete understanding, Figure 1 lists the main characteristics of strategic partnerships.

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Figure 1 — Basic Characteristics of Strategic Partnerships

Thus, the main distinguishing features of strategic partnerships from other forms of partnerships and long-term contracts, are the formation of specific competitive advantages, which have a significant impact on the effective functioning and business development of companies involved in a strategic partnership.

Let's look at the main forms of strategic partnerships (see Figure 2).

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Figure 2 — The Main Forms of Strategic Partnerships

Well, with the essence, forms and characteristic features of strategic partnerships we have understood. The advantages for each installer of partnership relations are also clear, because by effectively interacting, seeking to achieve common goals, companies can achieve such results, which they could not have achieved alone. But how they manage to achieve this effect and what are the nuances here, let consider further.

Each partner company has both strengths and weaknesses. Someone has more financial resources, someone has a stronger management team, someone has stronger competences in this or that area of activity or expanded capabilities in other resources, etc., i.e. partner companies can complement and strengthen each other. Here it is important to understand that mutually beneficial cooperation and interaction, i.e. the formation of a strategic partnership forms a new system that allows achieving a synergetic effect. After all, what is a synergistic effect - it represents an increase in the effectiveness of activities due to the integration, connection of individual elements into a single system, which allows them in the aggregate to form more value, achieve more ambitious goals and outstanding results.

Although, of course, strategic partnerships also face certain challenges, such as preserving sensitive data, handling large flows of information, managing large amounts of knowledge, and managing the new system flexibly and efficiently in general. Consequently, to ensure the long-term success of a strategic partnership, such challenges must be effectively addressed.

Thus, strategic partnerships will expand business opportunities by attracting investment, strengthening expertise and competence, and entering new markets, allowing businesses not only to survive, but also to develop even in times of macroeconomic turmoil.

by Linda Smith