Building the Right Partnerships
Expanding internationally is rarely easy and is often approached on an opportunistic basis. If you decide to expand through partnerships, how do you select the right type of relationship?
Types of partnership
The first task is to identify your objectives or needs from a partnership, and what type of relationship that dictates. Your needs might include:
- An understanding of the overseas market and local legal issues
- Access to target customers
- Access to key influencers (e.g. legislators, regulators)
- The ability to bear any currency risk
- The provision of local stock for products and/or parts
- Local after-sales support
It’s helpful to classify partnerships on two dimensions:
Asset sharing: What level of asset sharing is there in the relationship? Include all assets, not just tangible ones – branding, market presence, knowledge, skills, processes as well as offices, plant and machinery
Intimacy: The degree to which the B2B partners interact. The level of intimacy indicates the closeness or interdependency of the B2B relationship
A range of relationships is shown in the diagram above. It’s not exhaustive but enables you to consider the relationships available and the one(s) that may best fit your needs. Of course, the relationship(s) you would prefer may not be available in your target market. You can assess what is available by researching your competitors or other companies serving the market.
Another issue to consider is that, in general, a closer relationship is required to market more complex solutions.
This chart may help you assess what type of relationship best fits your product/service/solution. That will lead to a better understanding of issues such as:
- The type(s) of partners you need to grow the business
- Their market presence and access
- The internal resources and knowledge you require to develop the most appropriate partnerships
- The processes that are needed to get from where you are now to where you want to be
Converting Strategy to Actions
An unplanned approach often results in partners becoming disaffected, and all the parties involved wasting resources. The best way to avoid this is to adopt a Partnership Framework which can help you plan the approach and develop and manage suitable partners. Several resources are available on the internet, and from independent companies.
For example, Expertek’s Partnership Framework is a free resource giving the steps that are required to develop an effective partnership. For larger 1:1 alliances, the guidance from Alliance Best Practice might be appropriate.
Finding partners, just one step in the process, can be achieved by:
- Talking with other companies operating in the same sector
- Exploiting the personal networks of your key staff
- Making contacts at trade fairs and exhibitions
- Through trade associations
- Using the UK Department for International Trade’s trade adviser network
Remember that any partnership will have a life-cycle, so consider what happens when the partnership comes to the end of its life, and make sure this is part of the agreement.
Whichever route to market you select, remember that once you have signed the agreement you must still dedicate resources to:
Partner Enablement – ensuring that your partners’ salespeople are enabled to sell your solution
Partner Management – planning and implementing activities to achieve the sales targets for the partnership and developing the relationship to achieve longer-term objectives
This is just an overview – use one of the resources listed above to get a complete view of what’s required to develop effective partnerships.
Download the complete article Globalisation – Going Global through Partners.