Partnering

Strategic Alliances

A successful Strategic Alliance will provide its partners with a long-term competitive advantage. There are many different forms of Strategic Alliances available to meet your company's specific needs, e.g. Business Networks, Joint ventures, Operating alliances such as co-marketing, co-development, co-manufacturing, arm-lengths contracts with qualified third parties to sell your products in a foreign country, and others. There are advantages and disadvantages associated with each type that will have to be considered carefully. The type you select will depend on your objectives, your strategies, your resources and your time frame.

We will be glad to assist you finding the right partner to establish a successful alliance.

Finding a Partner

Four steps to find Partners in Europe, USA, Japan

Assess your partnering needs
Identify and qualify prospective partners
Setting and achieving goals
Securing long-term success

Step 1: Assessing your partnering needs

We will assist you to develop a clear understanding of your own core competencies and determine which activities you might want to outsource or which part of your performance you want to share with or transfer to a qualified third party. A SW/OT analysis will help you analyze what kind of resources you already have and what kind of resources you will need to come from that third party.
Your needs will determine what type of Strategic Alliance would be best for your company and what the objectives of such SA should be.
At the end of Step 1, we will prepare an information package that describes your strategic intentions, including the plan, the reasons for the SA, the type of partner you would prefer, the type of partner you would definitely like to exclude from the search, the desired outcome of the search, the time frame and the estimated cost.

Step 2: Selecting a partner

Since it its essential to consider more than one candidate, you will have to determine the profile of the prospective partner. Establishing reasonable criteria for the desired candidate will save time and effort.

The prospective partner usually will have to offer marketing skills and sales capacity or complementary technology and certain other necessary resources.

But don't overlook that he should also be compatible in terms of corporate culture and business practice. That's particularly important when selecting a foreign partner. Of course, trust and "personal chemistry" are critically important. Compatibility or "good fit" includes many other things that we would review with you prior to actually starting the search.

We will work with you to develop the “ideal candidate’s profile”.

The search

To search for a suitable partner, we perform desk and field research. There are many good sources of information both in electronic and printed form. There are business associations, governmental authorities, banks, research institutes, other business consultants, lawyers and accountants that are usually willing to provide assistance. We also attend trade shows to gather information, to make contacts, and to improve our general awareness of a specific area of business. Results can be achieved at sometimes surprisingly low cost.

Due Diligence

Once we have identified a potential partner, we will start the process of due diligence. We will look at the partner's resources, his capacity and capabilities to perform. We will evaluate his trustworthiness and his compatibility with your firm in terms of business objectives, strategies and business culture. There rarely is a perfect fit. So, we will have to determine how wide the actual gap is. And how much effort it may take to bridge the gap or compensate for it. Are there any (potential) conflicts of interest - today or down the road?

One cannot overdo the due diligence. Any investment in time and effort will not guarantee the success of a SA but it will reduce the risk of failure and losses.

Negotiate the Agreement

This is not a legal issue that necessarily requires an attorney but a business issue. It is important that the individuals who have to live with the consequences of the Agreement participate in the negotiations. They usually are the General Manager, Finance Director, and Sales Director, or Head of Manufacturing, Technology, R&D, or any functional leader who will be affected by the outcome. The individuals who participate should be authorized to make decisions.

Both parties must communicate frankly what they seek and / or what they offer. Prior to starting a negotiation, one would of course establish a list of what one is looking for and what one is prepared to offer. This list usually includes a product, technology or service, know-how, support on one side and the desired capability and capacity to sell and provide service to customers on the other side. Often it is just that simple but sometimes it is much more complex than that.

Protection of intellectual property rights such as patents or trademark are important issues and will require legal assistance. Other critical issues to be negotiated are exclusivity of sales and distribution rights, territory, limiting the time period of cooperation, definition of each partner's role and specific responsibilities, and much more.

Negotiations are a critically important business task in you own country with people whose business cultural background is similar to your's and instinctively understood. It is much more difficult in a foreign country with individuals who have been culturally conditioned in a different way and who think and act differently.

We like to assist you throughout the negotiations, from the preparation to the moment when you will have to accept or reject the deal. We will be glad to introduce you to legal counsel to provide necessary legal advice at reasonable cost. That's usually the moment when the agreement reached needs to be formalized.

We can hardly think of any business undertaking in which the understanding of cultural differences and competent professional advice how to manage that difference is more important than in negotiations. (The exception is in managing the relationship – see further below!)

Step 3: Setting and Achieving Goals

There is a simple, practical management tool with a proven record that will help you managing your Strategic Alliance. M-O-S-A stands for Market – Objectives – Strategies – Action Plans. It will assist you to jointly set realistically achievable goals. It will help you to develop distinct strategies and suitable action plans that in turn will enable you to achieve your goals. The system is simple yet sophisticated. It is a creative, analytical, structured concept that you and your partner will find motivating. It will greatly support cooperation and communication between partners.

We will introduce you and your partner to MOSA. Based on our experiences, we would expect you to stay with MOSA.

Step 4: Securing long-term success

A successful SA will provide all partners with a long-term competitive advantage. Managing the relationship with the partner requires a strong commitment on top of both companies. These top managers are the "Godfathers" of the relationship. They provide the spiritual leadership - and in times of crisis - unwavering support and wise counsel. M-O-S-A© will help to delegate the operational responsibility to the lowest possible level. Individuals on each level will participate in the M-O-S-A© process and through the process will be empowered to "get things done". Finally, regular performance control is part of the M-O-S-A© process.

Managing a Strategic Alliance

Entering into a Strategic Alliance Agreement is one thing. Successfully operating a SA is another thing. Achieving results is not an easy task in your own firm and your own country. It is more difficult in a Strategic Alliance – particularly when that SA is located in a foreign country. To achieve results across geographical distances and cultural borders requires being sensitive to and experienced in a foreign country/culture. This is our specialty as far as Europe/Germany, Japan and the USA are concerned.

SA first of all means to share expectations. Two (ore more) parties will have to jointly establish realistic, measurable objectives and critical milestones.

How do you do this with a partner who thinks and acts differently, uses different processes and systems, has different perceptions of "goals" and "strategies" – in short: how to deal with a partner who has a different cultural background?

How do you measure performance? How do you effectively control, make sure things are on track? How do you define success? We can assist you and your partner in two ways.

Cross-Cultural Training

We will train you and your partner culturally. You will learn about his culture. Your partner will learn about your culture. Both of you will learn how to cooperate with each other and how to achieve results as planned.

Please see “Cross-Cultural Training” for more details. We will customize a training program to meet your and your partner’s particular needs.

M-O-S-A©

We will introduce you and your partner to MOSA. Based on our experiences, we would expect you to stay with MOSA.

Please see “Achieving Goals” for more details.