A business’ growth to a higher level is often a perilous journey. From a start-up’s first unsteady step into the business arena, through each acquisition and investment that follows, risks surround those bold enough to take on the challenges.
The foundation of the company is built on skills, capital, an idea and a vision. Often the starting team has some form of expertise in manufacturing, procurement, marketing, engineering or design. Some companies simply identify a market niche and leverage their skills towards supplying a perceived need. Funding, talent, connections, and strategic planning are often in short supply as the business struggles to establish its place in the market. Each decision involves trade-offs and prioritization.
Preparing the road ahead
Frequently a company will approach a new stage, and tactically improvise as needs arise. While an organic approach of this nature is quite common, lack of strategic planning carries the seeds of disaster. As we start the New Year, plan ahead. Your strategic plan should already be in place for the next 18-36 or even 60 months.
One of the great strategists of all time put this succinctly. “Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win” — Sun Tzu
Risk Management
Strategic preparation separates the victorious from the fallen, both in business and in battle. Statistically, greater than 50% of businesses go under during the first year of operation. The hazards of lack of planning can cripple expansion prospects or worse, destroy the enterprise completely.
Businesses are at the greatest risk during critical junctures in development. High risk situations include:
- Expanding into new locations,
- Mismanaging inventory,
- Setting up new procurement avenues,
- Inefficient marketing campaigns,
- Investing in or expanding production facilities,
- Talent screening,
- Failure to meet supply or demand requirements,
- Encountering unexpected expenses.
A key element of preparation is in accurately assessing the company’s role in the global business ecosystem. Banding together with allies is a fundamental, proven method, of navigating dangerous territory. Find the right strategic alliance partners to forge ahead.
Choosing allies
Strategic alliances allow a company to navigate areas outside of their core areas of expertise. Each business entity contains a unique mix of skills, resources, assets and needs. A company’s foundation of teamwork allows colleagues to accomplish more than any individual. In the greater business environment, the same principles apply. Cooperative arrangements allow greater gains for all parties.
Expert consultants can be very useful for identifying synergistic opportunities for short, mid-term and long-term partnerships.
Entering into the right corporate alliance allows a company to concentrate on their area of specialty and utilize the talents, knowledge and specific capabilities of their ally. This is a mutual advantage. For instance, one company gains access to a product which complements their product line. In exchange the partner taps into developed markets with a ready buyer pool.
Select strong advisers
Like many other aspects of commerce, it makes sense to engage with an intermediary company that already has the needed skills, data and technology. Of all the strategic alliances your company embarks on, acquiring a matchmaking service should be among the first.
Using a matchmaker simplifies the complex dynamics of finding the right strategic partners to be handled by experts in that area. This type of service has access to a wide network of potentially compatible enterprises and has the skills to navigate the strategic relationship process. Strategic expertise is invaluable for not only locating companies with synergistic capabilities, but also for identifying intangibles such as compatibility of corporate cultures.
Assess objectives
A strategic planning service can assess specific needs at any phase of development. An expert service can provide engagement with prospects that are in a position to expedite corporate development plans. An impartial external adviser can provide objective viewpoints and perspective based on experience.
Partnerships advantages
- Increased market access
- Local, regional or global sales networks
- Procurement specialists
- Materials suppliers
- Acquire targeted distribution channels
- Specific technical expertise
- Specialized manufacturing capacity
- Objective goal assessment
- Strategic counseling
Efficient prospects
Leveraging the proven expertise of others is simply more efficient than expending resources developing these capabilities independently. A good match will allow each company to leverage their unique strengths for beneficial results and avoid redundancy of effort. By forging alliances with the right partner, time and capital can be leveraged for maximum advantage.
Positioning for victory
Planning expansion tactics, in advance, provides a clear road map to victory. Just as an emperor surrounds himself with expert advisers when charting a course, an astute businessman uses the knowledge and skills of others to attain his goals. Finding the right allies is a crucial first step in the journey to build an empire.
How are you positioned for victory?