Business Planning:

Strategic Mergers

In today’s highly competitive world, growth for a company is not as simple as hiring more people and adding more features. Especially with all these Internet companies popping up every day and closing down every other day, the dangers of venturing into business on your own are very real. Survival of companies in today’s world heavily relies on business alliances. Choices for types of alliances are many but you have to decide based on the kind of business you are in and whom you are marketing to. An alliance can be either lethal for a competitor or a blessing in disguise. So make your choice wisely.

• An alliance with a supplier can increase your income overnight, literally. For example, you have a shoe store. If you are in alliance with Nike and your supply of Nike running shoes runs out on Sunday evening and you have sale on these shoes starting Monday, who do you think Nike is going to send the shoes first overnight delivery to, you, with whom they have an alliance or to someone who doesn’t have an alliance with them. The answer in the business world is quite simple, you. Another good example is fast food chains. Many of them either carry Coca-Cola products or Pepsi products, not both. The reason for that is alliances produce quick results and efficient actions. If you have any kind of shortage or repair work needed, they rather prefer stores with whom they have a vested interest.
• A lot of people think that alliances with customers are an unlikely phenomenon. What they don’t realize is the sheer amount of knowledge about your company that some of your customers can provide. Because they are at a different end of the table and outside the workings of your business, they can provide you with an invaluable point of view. An alliance with a customer can bring you feedback that will help you grow into a bigger and better company.
• Companies create alliances to undermine their competitors in the business, then why would you create alliances with a competitor? Why did Microsoft invest $200 million dollars in Apple Computers? The strategy of eliminating your competitor can make you a lot of money but imagine the possibility of an alliance that will bring even more. By creating alliances with your competitors, you are able to bring more options to the table for your customers, options that in the past were available only in separate packages. The consumer was forced to choose between different benefits. But now you can offer all the benefits related to that product in one box. With Apple computers once again becoming a player in the global PC market, Microsoft realized the millions of customers that they were neglecting. Hence they allied.
• We are mentioning them last, but employees out of the three mentioned before are the only inside players that you can make an alliance with. Suppliers come close, but no one knows the weaknesses and the strengths of a company better than your own employees. Because they are already part of the company, it is a lot easier for them to partner with the company to help its growth. They are able to see potential where many others may not be able. Their loyalty will only increase after an alliance. By making your employees your partners, you are covering every base in the game.