Partnership Powerplay: The Rising use of Strategic Partnerships to Fuel Top and Bottomline Growth

Organic growth can feel frustratingly slow in today’s fast-paced and increasingly competitive landscape. While innovation is a key top-line driver, getting it right isn’t easy and its benefits all too often take more time to harvest than ideal. Tapping into an external wealth of existing resources and expertise through Strategic Partnerships can provide a much-needed boost to market expansion and improving the bottom-line.  

Ahmed Abdelnour, General Manager at Signium Egypt says “Successful organizations thrive not only through their individual expertise but also by fostering strategic collaborations and partnerships that unlock new markets. Developing a partnership mindset is imperative for achieving innovation, sustainable growth, and success in an interconnected and competitive world.” 

“The importance of a partnership mindset at the C-suite level and among directors aligns with the collaborative working environment between employees within the company. Just as strategic partnerships drive growth and innovation, fostering a collaborative culture among employees allows for sharing diverse skills and resources to achieve common goals,” he adds.  

Research by PricewaterhouseCoopers (PwC) highlights that companies who engage in collaborative ventures are more likely to see better revenue growth, better market share, better operational efficiency, and better access to new markets and technologies. 

When it comes to finding success in business, few things can make a bigger difference than a strong successful partnership. There are several different ways that companies can collaborate for success.  

The top five strategic partnerships are:  

1. Between two co-founders who launch a business together  

2. Between a business and its suppliers.  

3. Joining forces for branding and distribution for cross-promotions  

4. Joint marketing initiatives 

5. Combining your business strengths with different strengths of another 

For example, 95% of Microsoft’s commercial revenue comes through its partner ecosystem, which grows by 7,500 partners per month. For Zoom, channel partners contribute to 40% of its business in Japan and over 70% of its business with the U.S. Federal Government in fiscal year 2021, according to Forbes.  

Finding Synergy 

A Deloitte report highlights the growing value of strategic alliances in response to increasing uncertainty, where companies are leveraging collaborative relationships to drive innovation and growth. A study by the Harvard Business Review emphasizes the importance of establishing a governance structure for successful collaborations that define roles and responsibilities and sets clear performance metrics to track the progress and impact of the partnership. 

Co-creation for customer convenience 

When introducing Apple Pay in 2019, MasterCard joined forces with Apple, so that users could sign on to a global contactless payment option, benefitting Apple with the knowledge and experience of an established international credit card to develop its contactless system. This co-creation added value and increased customer satisfaction by connecting them to new products 

Apple and MasterCard’s Alliance until 2022, had the corporate advantage of having a device footprint of around 1.4 billion active devices, with about 900 million of those being iPhones. With Apple Card, it had full control of its financial environment from beginning to end. 

Commitment to progress and innovation 

Shell Lubricants India renewed its status as BMW’s only recommended supplier for aftermarket engine oils in India until 2022. The partnership with BMW was initiated in 2015 and the extension until 2022 to more than 100 markets, is testament to Shell’s commitment to driving progress and enhancing customer experiences through innovation and strategic collaborations. It is also recognition of Shell’s expertise in providing cutting-edge technology for the production of engine oils for high-specification vehicles. 

Shell supplied and manufactured all engine oils for BMW Group brands; BMW, BMW i, BMW M, MINI, BMW Motorrad and Rolls-Royce motor cars in India. Aligned with the latest engine specifications of BMW, Shell produced and supplied BMW’s branded engine oils. These oils featured Shell’s PurePlus Technology, using a patented process in which natural gas is converted to base oil, known as gas-to-liquid (GTL) technology. 

An alliance vision that stands the test of time 

The most successful partnership in history dates back to 1955. It all began when Ray Kroc, the man who would later become the CEO of McDonald’s, visited a small McDonald’s restaurant in San Bernardino, California. Kroc was impressed by the efficiency and speed of the operation and saw the potential for the fast-food concept to be franchised on a larger scale.  

Kroc knew he needed a beverage partner that could keep up with the pace of the fast-food operation. The natural choice was Coca-Cola. Kroc was a marketing expert, and integrated the two brands, using Coca-Cola’s iconic logo in all of McDonald’s advertising and promotional materials. He also made sure that Coca-Cola was always available at every McDonald’s restaurant. 

One of the key success factors behind the partnership between Coca-Cola and McDonald’s was the mutual respect and trust between the two companies. Kroc and the leadership teams of both companies understood the importance of working together and mutual commitment to the relationship. They were also willing to take risks and try new things to achieve their goals.  

How to mitigate the risks of a strategic partnership? 

Partnerships can reduce costs and increase flexibility, minimizing risk. But many organizations are all too familiar with the risks of partnerships themselves, and when they avoid those risks by opting out they lose the potential of some great synergies.  

Wharton management professor Harbir Singh has developed a way to mitigate those risks by employing partner strategies specific to strengths and weaknesses, to optimise the chances for achieving mutual benefit. Singh has identified three distinct strategies for successful alliances, each with unique objectives, key success factors, and potential problems. “By clearly identifying what you want to achieve through the partnership, and choosing the appropriate strategy, you can stretch your innovation dollars, share in the costs of investments, better handle uncertainty, and access new resources, capabilities, and markets,” Singh says. 

What key drivers create a successful partnership? 

An invitation mindset, says Forbes, can open the door to greater understanding between business partners. “When leaders identify key subjects and issues where there is a greater mutuality between companies, taking the role of convener allows the leader and their company to demonstrate through action their intention to be inclusive.”  

Key points for C-suite leaders seeking to forge successful alliances include: 

• Aligned vision: Ensure your Partner shares your core values and long-term goals. A shaky foundation does not bode well for mutually beneficial outcomes. 
• Complementary strengths: Don’t seek a carbon copy. Look for a Partner that brings unique skills and resources to the table, to create a well-rounded team. 
• Open communication: Encourage a culture of transparency and clear communication to work through challenges and celebrate targeted outcomes. 
• Define objectives: Outline specific, measurable goals for Partners. What do you both want to achieve? How will you measure progress? 
• Win-win mentality: Negotiate a mutually agreed structure that benefits both parties. Any sign or experience of imbalance breeds resentment and ultimately, failure. 

The strategic advantage 

When it feels like innovative approaches have all but been exhausted, any progressive C-suite will consider a partner relationship as a growth opportunity, fresh ideas and the advantages of a collaborative venture.  By committing to the groundwork, organizations can leverage their collective strengths, pool resources, and access new markets and opportunities that would be much more challenging to achieve alone. The maxim applies, If you want to go fast, go alone. If you want to go far, go together.