Supplying what customers demand is what establishes a business, but that is not the only thing that keeps a company going.
For a business to be successful, a lot more comes into play, especially when it comes to expansion. According to Maxwell Drever, resources and entrepreneurial backing are extremely crucial for a business’s success, and these things come with establishing a strategic partnership between two individuals or companies. All in all, a strategic partnership fosters business growth.
Strategic Partnership as per Maxwell Drever, strategic partnerships are legal agreements between multiple entities to reach a business goal. Such partnerships work towards benefiting all companies in the agreement. This is done through different types of partnerships:
● Joint Venture that helps two or more companies to parent a new one.
● Equity Strategic Alliance involves one company purchasing equity of another.
● Non-equity Strategic Alliance that makes companies integrate their resources for growth.
Market Expansion as per Maxwell Drever
Strategic partnerships gain benefits, especially when hurdles are in the way.
For example, it might be difficult for a footwear brand to enter the healthcare market, but a joint venture with a healthcare business can help do so, leading to a child company specializing in medicated footwear. Both companies can benefit from such a partnership while putting their expertise into the new venture.
Such partnerships help increase market presence and gain better profits from a larger audience, especially if both partners put in their share of resources. Moreover, this also helps cut down extra costs on the way.
More Clients with the aim of market expansion come a high number of clients. According to Maxwell Drever, partners can gain access to each other’s clientele through the merger, expanding customer reach by great lengths. Such reach helps establish future partnerships as well.
For example, studying customers helps understand their needs, and for partners, meeting such needs is easier. So, future possibilities of joint business can also come into play while increasing net profits.
Maxwell Drever says strategic partnerships are a great way to earn profits.
As per Maxwell Drever, sharing resources and clients helps in many ways. It helps cut down expenses that, otherwise, one organization would bear, increases potential customers, and increases the chances of economies of scale.
Local businesses help improve a country’s economy by generating profits, and when such companies come together, they help reduce costs and increase efficacy. This allows for greater monetary benefits for economic welfare. Such benefits help improve a business’s working conditions and employee satisfaction by taking off some burden. Moreover, it also aids in gaining experience from others in the process.
All in all, strategic partnerships help keep businesses stay strong while providing excellent benefits.