Strategic partnerships deliver access to new markets or customers, accelerate new product development cycles, and improve a company’s competitive positioning.
They help companies expand their capabilities without the added step of creating those capabilities in-house, increasing business risks by carrying extra costs/assets on the balance sheet. Companies, therefore, perform more efficiently and adapt more quickly than they would on their own.
Many companies commit more than 20 percent of their assets to develop and manage partnerships; others depend on partnerships for 30 to 50 percent of their research expenditures or annual revenues. A recent Frost & Sullivan survey underscores this trend: more CEOs cited strategic partnerships as their number-one growth strategy than any other (eclipsing new product launch, geographic expansion, and other traditionally favored strategies).
Strategic Partnerships Issues and Challenges
Studies indicate that between 50 and 70 percent of alliances fail (i.e., they do not meet the goals of the parent companies, or end up being “paper partnerships” and not real collaborations that produce major performance uplifts). Furthermore, the cost of repairing or terminating an unsuccessful partnership can be high:
Losses incurred through a partner’s underperformance
The opportunity cost of executives’ time spent managing a troubled partnership
Job dissatisfaction, lost productivity, attrition
Mediation, arbitration, or litigation costs
The expense of exiting the partnership
We believe that successful partnerships are based on a clear growth strategy, tight partner alignment, and shared capabilities. We help our clients achieve success by conducting rigorous upfront research to screen for the best market opportunities and potential partners, searching for partners that play to our clients’ strengths. We also help clients build an approach to strategic partnerships that do not leave them overly dependent on the performance or commitment of a single partner. Our 50 years’ experience in conducting market analysis and industry-specific research leaves us uniquely positioned to deliver on all aspects of the complexity and nuances associated with forming a strategic partnership.
Frost & Sullivan’s start-to-finish approach to Strategic Partnerships can help you:
- Surface gaps that could be complemented by a partner’s resources
- Identify capabilities that could be valuable to a strategic partner
- Conduct market, customer, and competitor analyses to surface new growth opportunities
- Identify targets that are a good strategic fit and willing to partner
- Monitor partner performance over time