When two or more businesses that offer complimentary services combine to service clients that neither could serve on their own, that’s a strategic alliance.
Giant airlines do it by combining a domestic line with an international line. Logistics companies do it by offering a combination of air, railroad, sea and truck transportation services.
Instead of selling services in competition with others, they have created alliances based on revenue sharing, quality work and service, without needing to negotiate each transaction.
On a smaller scale, local companies can gain expansive new capabilities if they seek out complimentary services and enter into formal or informal alliances. A couple examples:
- An engineering firm and surveying company combine services
- A flooring company combines with a carpet cleaning company
- A dental laboratory combines with groups of dentists
- A dry-cleaner and alterations company combine
Naturally, at the front end of an alliance there are a number of issues to be negotiated, including how each strategic partner will be compensated, how combined service(s) will be promoted, responsibility to correct errors, a trial period and communications between firms for scheduling, billing and keeping on top of projects.
Creating a strategic alliance isn’t particularly easy. But compare the benefits of a good alliance against the costs in time, energy and monetary investments in expanding a business to incorporate new services or products. Weigh those costs against the increased capabilities the alliance can bring your business and your customers.
You'll see there are many reasons why any business should consider creating strategic alliances with other firms that offer complimentary services and share the same values for quality, timeliness and value.
A strategic alliance might be in your future if your customers are asking for services or products you can’t currently provide and there are companies that offer them but do not offer what you sell. Of if you see opportunities for growth and don’t want to or can’t expand to offer those services or products. If it is attractive, pick up the phone and invite a potential alliance partner to a cup of coffee to explore mutually beneficial issues.