strategy

Promoting business partnerships

Synonyms:
Facilitating commercial joint ventures
Promoting strategic alliances between firms
Facilitating commercial development partnerships
Context:
At a time when downsizing, divestitures, mergers, acquisitions dominate the headlines, the greatest change in corporate structure and in the way business is being conducted may be the accelerating growth of relationships based not on ownership but on partnership: joint ventures; minority investments cementing a joint-marketing agreement or an agreement to joint research; semi-formal alliances of all sorts.
Implementation:
Japanese computer makers are gaining access to software technology by buying minority stakes in high-tech Silicon Valley firms in the USA. Large American and European pharmaceutical companies gain access to research in genetic, medical electronics and biotechnology by buying minority stakes in start-up firms, or by going into partnership with small, independent asset managers.

Even less formal alliances exist, most of them unreported -- like between the world's leading designer of microchips, Intel, and Sharp, a major Japanese manufacturer: Intel do the research and design; Sharp the manufacturing. Each company will separately then market the resulting new products and neither firm invests a penny in the other.

In telecommunications there are the 'consortia' in which three or more big established telephone companies (often based on different continents) team up to obtain licenses for cellular-phone services all over the world, or for cable TV, or to buy into an old government monopoly about to be privatized. One reason for this is that no company has enough money to do the deal alone. Another is that no one company has the need technology. In many parts of the work, such as coastal China and Malaysia, business cannot be done except through a joint venture or an alliance with a local partner.

Claim:
Equally novel are the demands partnerships and alliances make on managing a business and its relationships. Executives are used to command. But in a partnership one cannot command. One can only gain trust.
Organizations:
209)
Type Classification:
G: Very Specific strategies
Related UN Sustainable Development Goals:
GOAL 1: No PovertyGOAL 2: Zero HungerGOAL 3: Good Health and Well-beingGOAL 4: Quality EducationGOAL 5: Gender EqualityGOAL 6: Clean Water and SanitationGOAL 7: Affordable and Clean EnergyGOAL 8: Decent Work and Economic GrowthGOAL 9: Industry, Innovation and InfrastructureGOAL 10: Reduced InequalityGOAL 11: Sustainable Cities and CommunitiesGOAL 12: Responsible Consumption and ProductionGOAL 13: Climate ActionGOAL 14: Life Below WaterGOAL 15: Life on LandGOAL 16: Peace and Justice Strong InstitutionsGOAL 17: Partnerships to achieve the Goal