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Strategic Alliances: Not so Niche Anymore

I’m constantly surprised by how many people view strategic alliances as a niche practice. I hear it all the time and particularly when introduced at parties with other executives. When I speak at events, I’m often introduced as an expert in a niche area. Although I often wonder how they can consider Alliances and Partnerships as niche. Especially in today’s business climate whereit’s easy to see that forming alliances to conduct business is far from being niche. It’s not simply a new way of doing business. It’s the way of doing business in this day and age.

Take a look at your current business. What key relationships are critical to your business? What would happen if you lost your most important clients, or suppliers – your most important strategic collaborations? The truth is that not all business relationships are equal; some are more important and more strategic than others. And for some companies, building strategic relationships is the name of the game.

The fact is that even the largest of companies, such as Nike, Boeing Unilever and others, now focus on their core competencies and work with a global network of strategic suppliers and partners to bring products and services consistently to market. From product design to the sourcing of raw materials to production, and across channel relationships, partnerships and alliances are interwoven throughout all supply and demand elements of corporate value creation. They are a key component of their supply and value chains, making them more resilient and more competitive at the same time

Take Unilever, for example. In 2009 and 2012, Unilever launched plans intended to decouple Unilever’s future growth from any negative environmental and social impact. The company, which operates in 190 countries and sells to 2 billion consumers globally, worked on several multi-year strategic alliances to help it reach its goals.

In 2010,Unilever signed a multi-year partnership with Jacobs Engineering Group Inc. to reduce carbon, water and waste footprint across its manufacturing sites. By 2015, because of a unique value chain partnership with the NGO Rainforest Alliance, Unilever will source 100 percent of all tea for its Lipton and PG Tips products from certified growers and by 2020, all of its of tea will be sustainably sourced.

They have also partnered with competitors such as Nestle, Danone, and The Coca-Cola Company to form a plant-based bioplastics alliance to look for alternatives to petroleum-based products. These strategic collaborations make Unilever’s supply chain more sustainable and, as a result, more resilient to the uncertainties and ambiguities of a complex and interconnected global economy. The result, Unilever has developed Collaborative Advantage, a capability to create strategic business relationships that build competitive resilience across all its business lines.

The truth is, opportunities for collaboration are almost limitless. From international go-to-market partnerships to research and development alliances that reduce costs, today’s companies are partnering across all parts of their value chain. They do so to access new markets, reduce costs, and become more nimble, more competitive and more innovative.

The numbers speak for themselves, today as much as 25 percent of corporate revenue and value is tied to alliances, up from only 2 percent in 1980. Since 2000, international alliances in the form of joint ventures grew from US$5.2 billion to US$12.1 billion in 2012. Strategic collaboration in the form of Strategic Alliances and Partnerships is not a niche practice; it’s a new way of looking at doing business and it’s here to stay.

So I’ll say it now and at every party from now on, Strategic Alliances and Partnerships, Not so Niche Anymore!

 


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