Marketing Viewpoint by Ruth Winett
Six Things You Should Know
About Potential Partners
Partnerships with other companies can be highly beneficial, but you don't want to form a relationship and discover that you have inherited another company's poor reputation or another problem. Before partnering with another company, you should prepare a comprehensive profile of the company and then weigh whether the partnership makes sense. Here are some of the things to include in your profile:
Company: What is the reputation of the company and its goods or services? Is the company involved in patent disputes or lawsuits that could affect the potential partnership? Boston Scientific acquired Guidant, as well as lawsuits involving Guidant's heart devices. Such lawsuits siphon off cash, as well as time, leaving the partner with little energy for your partnership.
Context: What is happening in the future partner's industry? Is the potential partner responding appropriately? Examples of industry developments include market saturation (cable companies); disruptive new technology (driverless cars); stringent regulations (healthcare); and consolidation (airlines). How would such developments affect your partnership?
Cash or financial situation: If the company is growing, is it growing organically or through the acquisition of companies, products, or technology? What internal and external factors could stimulate or prevent growth, and how would these factors affect your partnership with the company? If the company is public, check notes in financial statements for additional insights.
Competition: Who are the company's main competitors? What are the competitors' strengths and weaknesses? How is the potential partner responding? If competitors are offering subscription based cloud services, and the potential partner is still licensing software, the company might not be the best choice.
Collaborators: Who are the company's current partners and affiliates? Would your future partner's relationships give you access to a new market or distribution channel?
Compatibility: Are the two companies compatible? Do you have similar values and similar corporate cultures? A company that treats its customers and employees well will not be comfortable partnering with one that is indifferent to the needs of customers and/or employees. Finally, is the potential partner's leadership team compatible with your leaders?
Creating a comprehensive profile of potential partners is challenging, but absolutely essential. The six factors described above are just a few of the factors to consider. Circumstances will dictate which of the factors are most important for your company. We can help you evaluate potential partners and acquisition targets.
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Copyright © 3/14 Ruth Winett. All rights reserved.
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