Building Alliances To Compete In The Global Market

Once, businesses competed in stable local and national markets with familiar competitors and captive customers. Not any more.

To compete in the 21st century, you need to be global and flexible. You have to respond to new, innovative competitors constantly busting to take away your customers. You have to keep seeking new products, new customers, and new markets, and still keep costs and prices down. You have to move fast and be everywhere.

Business in the Information Age is complicated not only by the new forms of relationships, but also by the distance of the people we are dealing with on a daily basis. For centuries, local proximity has determined the way we do business. Weve dealt with customers who shared a common culture and therefore easily understood our products and services.

The Internet and global connectivity has completely turned our past way of doing business upside down. We now find ourselves in a world where we are thrust together in all aspects of business without borders. From purchasing items from a seller on eBay to video chats with team members halfway around the world, and any time you might find yourself with a potential buyer or business partner whom you have never met in person and who doesnt necessarily speak the same language you do.

Before the Internet, business moved at a slower pace. We had time to get to know our customers on a personal level. Today, multinational companies commonly form strategic alliances with businesses from different countries and cultures. International customer bases multiply and mutate faster than a flu virus. We build our business relationships in a collage-like construct of video chats, cell phones, emails and faxes.

Business opportunities are popping-up faster today than we have developed frameworks for understanding each other and getting along. Distance no longer separates us; new communication capabilities render distance irrelevant by connecting us instantly. Technology connects us more than ever before, but take full advantage of all the opportunities that it brings we must form strategic alliances.

A strategic alliance is one that significantly furthers the strategy of a company. Whether you are a large corporation or a small Internet based company there are three rules they you must follow to form a solid strategic alliance:

1. The businesses must remain independent with different goals. An alliance that creates a new company out of two formerly independent ones is not an alliance because the two businesses no longer exist.

2. Neither business in a strategic alliance can be dominant. If one business has strategic control over the alliance, the alliance is not serving the strategic goals of the other business.

3. Both businesses must make equal and continuing contributions of products or services to the alliance.

These general rules help separate strategic from non-strategic alliances, but they arent absolute definitions. Any alliance can be strategic as long as it makes a significant contribution to both businesses strategy and bottom line.

Structuring a strategic alliance builds your business much faster than going it alone, and even more compelling, its cheaper. As a result alliances give businesses greater flexibility in responding to global competition through new strategies. For example, through alliances you can enter new markets and geographical locations at a fraction of the cost of going it alone.

By aligning yourself with another business, you can also share the costs of developing new products. This is a significant advantage at time when innovation is vital to business success and more expensive than ever. Forming an alliance with a business outside of your country not only helps you learn different business systems but it also helps you become more competitive by expanding all your business activities.

Today, more and more businesses are recognizing the need for a global approach to international competition. The companies that will rise to the top today and stay on top tomorrow are those that have the strongest strategic alliances. The world has changed to make this way of doing business more important than ever, because success depends on forming a global strategy.

Copyright2007 by Joe Love and JLM & Associates, Inc. All rights reserved worldwide.

Joe Love draws on his 25 years of experience helping both individuals and companies build their businesses, increase profits, and success coaching programs. He is the founder and CEO of JLM & Associates, a consulting and training organization, specializing in career coach training. Through his seminars and lectures, Joe Love addresses thousands of men and women each year, including the executives and staffs of many businesses around the world, on the subjects of leadership, achievement, goals, strategic business planning, and marketing. Joe is the author of three books, Starting Your Own Business, Finding Your Purpose In Life, and The Guerrilla Marketing Workbook.

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