Marcel Kooter is a highly experienced business leader who has formed many strategic partnerships throughout his career, working primarily in the oil and gas industry.
A strategic partnership agreement occurs when two or more businesses agree to work together on one or more aspects of the business strategy, often without an official partnership such as entering into a joint venture, but not always with some form of contract formalising the agreement. A definition of a joint venture can be found in the PDF attachment to this post.
Strategic partnerships can take many forms but the essence is that they help all partners involved to achieve their own strategies and that relationship is recognised as strategic and sustainable rather than transactional. There is no official requirement for a contract or other binding written agreement when entering into a strategic partnership, but at least a MOU (Memorandum of Understanding) signed by the top of the organisation is helpful to communicate the objectives and ways of managing the partnership across the organisation. There are many different types of common strategic partnerships that can be seen in the global business world and a few examples are provided below.
Design and Manufacture
One example of a strategic partnership that has the potential to benefit both parties would be a small design firm partnering with a large manufacturer. The design firm gains access to extensive equipment, staffing and marketing capability, while the manufacturer benefits from accessing fresh and original designs from a firm that has a proven ability to understand the needs and desires of a mutual target market.
Research and Development
Researchers often team up with product developers to produce mutually beneficial solutions to a range of challenges, or to create new opportunities to make a project more profitable and more useful. An example would be a sustainable energy company developing solar cells that can be used as roads and teaming up with an organisation dealing in infrastructure.
Many businesses form strategic partnerships by outsourcing certain aspects of the business to other firms that have the requisite skills. This could involve outsourcing information technology to gain the technical foundations required to run a business, leaving the company to focus on its key areas of expertise to gain a competitive advantage. A definition of outsourcing can be viewed in the embedded short video.
Corporations and other businesses can improve their reputation for sustainability by teaming up with a non-profit organisation to embed sustainability initiatives into the brand. This could be a chain of fast food restaurants providing funding to a non-profit that is working on a project to clean up the oceans. The non-profit gains valuable funding, while the restaurant chain demonstrates publicly its commitment to the environment.
Many forms of strategic partnership come about due to the promotional needs of one or more of the parties involved. For example, many global drinks brands partner with music festivals in the summer to promote their products at the event and within the event advertising. The beverage company injects capital into the music festival and in exchange, thousands of festival-goers view brand promotion and have the opportunity to purchase the products on site.
Some partnerships involve one company adding more value to a product and selling it on, such as selling the software product of an IT company as a service. The reseller makes the product more accessible or more appealing by adding new features or benefits before selling it on.
Brands can also partner up to help cross-promote their products, often adding something extra that is of benefit to the consumer. In the infographic attachment, view some of the most successful brand partnerships according to Forbes Magazine in 2014.