Relationships with a Small Number of Strategic Partners

Topics: Interpersonal relationship, Strategic management, Customer service Pages: 3 (813 words) Published: July 7, 2010
In the reality of today market, there is a need for a firm to be ready to change course and its traditional processes in order to take advantage of new business opportunities. One of the processes by which a firm can do this is through strategic partnership.

A strategic partnership was defined by David Teece as a web of agreements whereby two or more partners share the commitment to reach a common goal by pooling their resources together and coordinating their activities. Robert M. Grant (2005) also put it that strategic partnership makes “a wide array of opportunities become available". For example, Atlas Copco in Nigeria is in a strategic relationship with two companies which are R.T. Briscoe Plc and United Technical and Allied Services Ltd (UTAS) which is a division of chellarams Plc. These two companies are given service and customer support and of course credit facilities by Atlas Copco while they in turn help to promote the sales of Atlas Copco products and at the same time improving their own business. “The business synergy between besides giving UTAS and “R.T Briscoe” the franchise to market products from Atlas Copco across the country also equip them with the necessary International technical training and knowledge needed to serve growing Atlas Copco clientele in Nigeria”. One of the basic advantage Atlas Copco Nigeria is enjoying from this relationship is the few sales people on its pay roll because in the absence of this relationship, Atlas Copco will need to have a great number of sales people on its pay roll (increase in cost) to cover the markets where R.T. Briscoe and UTAS are helping to cover.

The Advantages of developing close, long-term relationships with a small number of strategic partners can be said to be the following;

Trust: Having a long term relationship builds trust among the stake holders and this makes the partners to behave in the interest of others.

Success is beneficial to the parties: The partners have more to gain...

References: David J. Teece (2000) Managing Intellectual Capital: Organizational, Strategic, and Policy Dimensions; Oxford University Press Inc; New-York.
Nicholas S. Vonortas: (2009) STRATEGIC BUSINESS PARTNERSHIPS 6th Annual VEF Fellows and Scholars Conference, Center for International Science and Technology Policy& Department of Economics, George Washington University
Robert M. Grant (2005). Contemporary Strategy Analysis. 5th ed. Blackwell publishing limited
Slack, N. & Lewis, M. (2008) Operations strategy . 2nd ed. Harlow: Financial Times and Prentice-Hall.
Businessday (2006); Atlas Copco, UTAS seal partnership deal (online). Available from http://news.chellaramsplc.com/atlas.html (Accessed: 19 June, 2010)
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