What Is a Strategic Partner?

In this blog, you’ll find an overview of strategic business partnerships. Here’s what you can expect to learn:

  • What is a strategic partnership?
  • What makes a good strategic partnership?
  • How to create strategic partnerships
  • What are the benefits of strategic partnerships?

Let’s begin with the first question and define a strategic partnership.

What Is a Strategic Partnership?

In business, what is a strategic partner? A strategic partnership is an arrangement between two or more companies that agree to support each other in an effort to help both parties succeed. Strategic relationships are normally formed between non-competing businesses, sharing resources and leveraging key assets with the mission to grow and increase efficiencies.

Strategic partnerships are not one-sided; they’re interdependent and mutually beneficial. The goal of the strategic collaboration is to create joint value by offering non-financial resources (e.g., information) that the other company would otherwise be unable to access.

In short, building strategic relationships as a business helps you do more with less. Now that you know the answer to “What is a strategic partnership?” let’s take a look at what makes a good strategic partnership.

What Makes a Good Strategic Partnership?

A partnership is strategic when the partners remain independent. A good strategic partnership is one where both companies share control over joint ventures. This means that both partners reap the benefits, accept the risk, and have a say in all decisions.

The alliance must be a win-win for both sides. Ideally, the benefits each party receives by partnering with the other are equal in value. A successful partnership is when both sides have reasonable expectations, which have been clearly communicated.

Here are three things that make a good strategic partnership.

Complementary Audiences

Your audiences don’t have to be identical, but you want them to be similar. For instance, if you cater to older individuals with a considerable disposable income, you want your partner company to appeal to a similar demographic.

Not a Competitor

Obviously, your partner shouldn’t be a competitor. What you bring to the table should benefit their audience but not compete for them by offering the same service. You want to form a strategic alliance with a company that has a similar audience but distinct services.

Mutually Beneficial

You need to find a partner that sees the big picture of how you can contribute to each other’s success. Having said that, your core products or services must be valued by your partner’s customers. Successful partnerships mutually benefit each company in some way, such as in internal efficiency or customer satisfaction.

Now that you know what makes a good strategic partnership, we’ll dive into some tips on how to create strategic partnerships.

How to Create Strategic Partnerships

Strategic partnerships can begin in all sorts of ways. We can’t tell you how exactly to go about it, but we can give you some general advice before making your decision. Here are a few tips to follow when learning how to create strategic partnerships.

Do your research

Research different companies that you think would make good matches and would likely enter into a partnership with you. Then, list who will be the best asset to your business using the information you find. Don’t be afraid to call the company and ask a series of questions or set up a meeting since online information is limited.

Consider the big picture

Look beyond the present and create a vision for the future. The goal of a strategic partnership is to move both businesses forward. Think about how a long-term partnership will create lasting value for both sides and communicate a compelling vision to your potential partner. You both need to be on board with that vision for the partnership to be successful.

Get it in writing

Good partnerships need protection. Once you’ve found a company to partner with, contact a legal professional to write an official agreement. Both parties need to give input and will undoubtedly request various stipulations. Each partner must feel confident in the contract before signing it.

If you’re considering a partnership with another association, you want to know what’s in it for you. But, first, consider these five benefits of strategic partnerships.

5 Benefits of Strategic Partnerships

Strategic collaborations allow partners to reduce expenses, grow their business, and achieve their goals, but that’s not all. Below we’ve listed five additional, concrete benefits of strategic partnerships.

1. Access to shared resources

It can be difficult for new and/or small companies to afford the roles and resources necessary to scale. Companies can overcome internal limits and inefficiencies by executing the right partnership strategies without financially investing in solutions. A strategic partner will be there to provide a range of expertise and support when needed.

2. Opportunity to reach new markets

Complementary, not competitive, businesses form the best partnerships. A strategic relationship with another company means access to their customer base, which widens your reach. Along with expanding your target audience, one of the main benefits of a strategic partnership is the ability to enter new markets you wouldn’t have been able to break into beforehand.

3. Gain a competitive advantage

As they say, two is better than one. Investing in partnership strategies puts you a step ahead of the competition. Instead of starting at square one, your strategic partner enables you to jump to square three. You benefit from following their well-trodden path, giving you a competitive advantage.

4. Greater brand awareness

Getting the word out about your offer is especially difficult for small businesses. When you form a strategic collaboration with well-known organizations or influencers, your brand is exposed to your partner’s audience, creating awareness that wasn’t there before. Then, when those people see your brand again, they will hopefully recognize it and engage.

5. Financial stability

When you have a strategic partner, you share the load. A partner can bring an influx of cash and cost savings simultaneously. They may be well connected, which is a good reason for forming a strategic relationship in the first place, improving your ability to borrow money. Their network may also help you cut costs by securing better deals, especially if they’re a larger, more established organization.

The importance of strategic partnerships really depends on what you need and expect them to bring your business. For some, partnerships are crucial to the future of the company. For others, they’re a cherry on top of an already successful business. But, at the end of the day, if your partnership is strategic, it will be a profitable decision.

Strategic Consulting for Associations

MGI is widely respected throughout the association and nonprofit community as a thought leader, a trusted resource, and a preferred partner. Our strategic consulting is analytical and creative and guided by the MGI Membership Lifecycle.

The five stages of The Membership Lifecycle essentially map out the journey customers take before, during, and after joining your association. Any affiliation-driven program needs to know about each stage in this lifecycle:

  1. Awareness
  2. Recruitment
  3. Engagement
  4. Renewal
  5. Reinstatement

We work closely with associations to develop custom solutions based on realistic objectives, innovative programs, and incomparable experiences. If you’re interested in how we can support you, request a membership consultation today.

Request a Membership Consultation