Now, ladies and gentlemen, let's put down our Mont Blanc fountain pens and reflect on an issue that seldom gets the time it deserves: strategic alliances. "That's all very well and good," you say, "but I don't enjoy playing Risk." Indeed, this is no board game (and I prefer Axis and Allies, by the by), it's the current corporate and business buzzword. With the crumbling markets, credit crunch, and doom slinging, the corporations and affiliated executives that will survive will be the ones that can ally themselves. Forming an alliance is never as simple as tagging one another as BFF (that's best-friends-forever). It's all about planning ahead and observing your respective growth charts over the past five years. If the growth rates are simpatico, you have to look ahead. Future growth projections are crucial. Does your potential ally have their entire R&D budget wrapped around developing the new Pet Rock? That might be a potential red flag. The bottom line when it comes to strategic alliances is just that: the bottom line. Profit is the goal of every corporation, and of most businesses. No one specifically starts out to not make a profit in business. Knowing your company's objectives thoroughly is crucial. Business executive, know thyself. Having clear, identifiable objectives makes it very easy to judge whether or not your potential allies have compatible goals. If you are hoping to break into the Dutch market, what sense does it make to ally yourself with a company set on developing rubber sandals in Calcutta? Once (and if) business plans and corporate goals align, it is essential you and your new allies formulate an overarching business strategy. How will each company work to achieve the stated goals? This requires playing to respective strengths. There is little wisdom in allowing one company to shoulder the majority of the responsibilities. Indeed, the alliance, by definition, is supposed to be mutually beneficial. Let the company with more advanced R&D department do the grunt work, while the company with the superior distribution system take the product from the factory to the store. Strategic alliances are crucial for business keen on surviving the tumult of the coming economic depression. An alliance can offset the cost of raw materials, the cost of production, and allow for radical new breakthroughs with regards to product upgrades. Indeed, a new product is often the result of well-planned, well-researched alliances. The future is tomorrow, make sure your know who your friends and allies are.
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