Global expansion can open up new revenue streams and increase brand recognition for businesses, but often requires significant resources and time investment.
Strategic partnerships can be an effective means of mitigating risk when entering new markets, potentially saving your business both time and money by eliminating costly lessons learned through experience.
Pooling Resources
Companies are discovering that partnering with other businesses can be the key to expanding their global operations. Finding appropriate partners requires careful selection and vetting processes.
Pooling resources allows your company to diversify risks and become less vulnerable to market shocks. Expanding globally also gives access to unique resources like talent pools, technological advancements or raw materials not available locally.
What type of partnership you select – exportation, licensing or franchising – will depend on your goals. However, regardless of which method is chosen, be sure to set up a system for measuring success and risk analysis – KPIs that align with international expansion objectives could help.
Reaching a Larger Audience
Strategic partnerships can be an effective way for businesses to reach a broader audience. For instance, fitness equipment companies that collaborate with health and wellness influencers may attract new customers while increasing visibility; similarly, software firms that partner with cloud platforms may reach more of their existing customer base while increasing brand recognition.
Strategic partnerships also enable companies to expand their presence into new geographic markets. For instance, a business selling its products locally could partner with another in another country to gain entry into an untapped market.
Examples of strategic partnerships can be seen in retail (Walmart and Procter & Gamble), healthcare (Johnson & Johnson and Google), and financial services (American Express and Delta). Some partnerships form joint ventures in which both parties share ownership. Non-equity strategic alliances may also form wherein both parties agree to pool resources and capabilities contractually; open communication and mutually accepted metrics to evaluate effectiveness are keys to successful collaborations.
Increasing Brand Awareness
Strategic brand partnerships can expand a company’s visibility, improve its reputation and foster trust between it and consumers – leading to more traffic on websites, more social media followers, increased revenue streams, new clients and greater client retention.
Strategic partnerships can also assist brands in entering new markets. One such example was when Dunkin’ Donuts and Waze joined forces, enabling both companies to access local markets that may have previously been unknown to either.
Businesses can assess the success of strategic partnerships by tracking key metrics like revenue growth and customer acquisition, which allows them to assess whether their strategy is working and make any necessary adjustments for future partnerships. Cost savings are another measurable indicator of partnership’s effectiveness; cost-cutting efforts such as sharing marketing expenses or collaborative processes can increase both parties’ returns on investments while simultaneously increasing efficiency, which may prove especially helpful for smaller firms without an ample budget for global expansion.
Boosting Sales
Strategic partnerships can be an invaluable way for businesses to expand their customer base and brand awareness, optimising any stage of the sales funnel from awareness through acquisition or even increasing revenues.
Strategic partnerships may take various forms; formal arrangements with contracts being just one form. Either way, formalizing it will benefit both parties by setting clear expectations and outlining an agreed path towards success.
Equity joint ventures are one form of global strategic partnership, where two partners create their own legal entity and divide ownership percentages between them in order to pursue international marketing opportunities and take advantage of dynamic market conditions.
Non-equity joint ventures (or “non-equity jvs”) are another form of strategic partnerships; two entities simply come together for a limited period, like clothing retailers partnering with footwear companies to offer customers full fashion solutions from head to toe. Such relationships are an effective strategy to increase sales while meeting international expansion goals for a business.