Strategic alliances can often be tricky. Partnerships foster mutual benefits, but the alliances exist only as long as they are advantageous to both parties.

Even so, the concept of gaining a marketplace advantage by teaming up with another company whose products or services fit well with your own is not only seductive, it’s also critical for an increasing number of businesses. 

Here are 5 Tips for successful strategic alliances:

1. Identify the need

Conduct a strategic analysis of your market sectors and target audiences to determine which areas are the most profitable or have the greatest potential. Understand clearly where you are so that you can find the partners that best complement you.

You need to understand how the alliance fits into your business plan, so be clear with yourself why you're entering into it and what you expect to gain.

“In this new wave of technology, you can't do it all yourself, you have to form alliances.”
(Carlos Slim Helu) 

2. Evaluate potential partners

Even when you get a referral from a trusted advisor, researching a prospective partner is crucial. You must feel comfortable with the strategies and tactics of any company you’re considering an alliance with.

Find out about the business' key strengths, market position and – if possible – financial status. Once you’ve narrowed the field on paper, the detailed analysis begins. It's critical that you look objectively at management styles, work ethics and values, and identity where potential clashes could occur.

Key questions to ask:

Answering these questions honestly leads to a better match. Some companies, for instance, are known for their tight rein on employees or the long hours they keep; if your work style isn't similar to theirs, you could be headed for problems. It's also smart to get references from people who have worked with your potential strategic partner.

3. Establish joint objective & goals

Developing key objectives and goals that reflect what both parties expect to gain is critical. Be sure that expectations are realistic in light of the resources both parties are willing to put forth, and make adjustments as needed.

Nothing sours an alliance faster than the notion that one party is giving everything while the other is getting a free ride. Strategic alliances have to foster an environment in which both parties gain something; otherwise, they're not partnerships.

4. Define roles & responsibilities

Assess each company's strengths, and define responsibilities accordingly – especially in the area of management. Many alliances fail because of poor management relationships, so document clearly what's expected.

Be specific: decide how many people will be involved in the alliance from each company and what their specific roles will be. Each party has to dedicate resources to the relationship, and both parties need someone within their organisation who will champion the cause.

Also consider all the accounting, tax and legal consequences of the alliance. Create a game plan for how the alliance will operate from the beginning to the end of the relationship.

5. Clear communication

Establishing a clear and open communication process is key to creating an enduring partnership. Disappointments and misunderstandings can be avoided by establishing an effective process for working with your partner.

The relationship must be developed to the point where both parties can be honest when evaluating progress and offering recommendations for improvement – both of which should be done on a regular basis. For example: you might want to exchange weekly sales reports.