What Is A Strategic Agreement

But true strategic alliances need effective management to realize their true potential, and given the time and energy required for traditional partnerships, it is more difficult than it seems. Choosing the right partner for the right project requires in-depth knowledge of partners` distribution, marketing and project data, as well as an understanding of their customers and the global solutions they are looking for. According to a 2014 PwC PwC survey, more than 80% of U.S. CEOs are currently looking for strategic partnerships or intend to do so in the near future.1 Yet in the past three years, only 65% of those seeking new strategic alliances have succeeded. It is at this stage in the life of a strategic alliance that an internal structure emerges under which its functions develop. During its existence, the Alliance itself will become a separate new organization with members of the original companies, with the goal of achieving all of the objectives set previously and improving the Alliance`s overall performance, which will require effective structures and processes and effective, solid and reliable leadership. The budges must be interconnected, as well as the resources that are the most strategically important, and the Alliance`s performance must be evaluated and evaluated. [9] [26] Whether you are a start-up or a growing company, there are many reasons to enter into a strategic partnership agreement. At least a strategic partnership will create added value for your product or service by expanding what you have to offer. A strategic partnership can even be a proverbial “match made in heaven” if the two parties involved replicate well enough. As part of a strategic partnership, the partners remain independent; Share the benefits, risks and control of joint actions and to make an ongoing contribution in strategic areas. Most of the time, they are put in place when companies need to acquire new skills within their existing business.

Strategic partnerships can take the form of minority stakes, joint ventures or non-traditional contracts (for example. B, joint research and development, long-term public procurement, distribution/collective services). Pharmaceutical company, Abbott`s agreement in India to market Zydus Cadila drugs throughout India. An agreement like this allows each company to focus on what it does best. In this case, Cadila Cydus focuses on drug manufacturing, while Abbott India hones in the marketing of drugs. Given the significant increase in strategic partnerships, companies should keep in mind that success depends to a large extent on the adoption of a correct strategy, direction (within the company and between partners) and seamless integration into the company`s processes and processes.

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