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Business partnership. Advantages and disadvantages!

Business partnership

Today, it is not unusual to establish a business partnership between companies that compete for the same market or that market products that complement each other in some way.

What a little more than a decade ago could even be considered, nowadays is seen as a commercial strategy that offers great growth potential for the parties involved.

Entrepreneurial partnership usually happens when two competing companies decide to unite, sharing their strengths in order to optimize their development, attract new audiences and improve their results.

At first the idea of ​​establishing a business partnership seems very promising. After all, it is a possibility to face new markets without the need to make big investments, facing substantially reduced risks. But do business partnerships have only benefits to offer?

Keep reading to check it out!

Table of Contents

Main advantages of establishing business partnership

The increase in the company’s reach power

Clearly, by partnering with a company and conducting joint advertising campaigns and campaigns to promote brand union, the power of reach will be doubled for both parties.

In addition to the fact that the cost to develop this dissemination strategy is much lower than if the partnership did not exist.

The reduction of costs with suppliers

If a company goes on to reach a much larger number of customers because of the business partnership, its sales index will also increase. Consequently, it will increase production and will need to buy more raw material or products.

As more is bought, new possibilities for negotiation with suppliers arise, especially when it comes to wholesale purchases.

The optimization of tasks and operational processes

In business partnerships in which production and management processes are shared, the day-to-day operational tasks are accomplished in half the time and the productivity of the companies involved in the partnership is optimized.

The possibility of offering better prices to the customer

With a drastic reduction of costs and a great increase in sales, it is possible to offer better prices to its customers, in addition to promotions and offers irrecusable.

 

Possible disadvantages of establishing a business partnership

The divergence of quality in the product offered

It is necessary to consider the possibility that although the companies market the same product, there can be a great difference in the presented quality.

Joining a brand that delivers a lower quality product to your customers can be a big misconception, capable of bringing opposite results to what you expect such as negative advertising for example.

How to avoid?

The best way to avoid this type of problem is to carry out a thorough and demanding selection process when deciding which companies are compatible with yours. In addition, of course, to analyze which offer more advantages and less disadvantages.

Also note the internal administrative processes and choose the one that has practices and ideals compatible with yours. This favors an alignment of the final result and a higher quality of products and services that impact your brand.

Signing a partnership without researching about the other company can put your business into serious complications.

Ideological complications and conflicts with the public

In the age of social networks , any positive action that a company does certainly does not have the same reach among users as a negative action. Moreover, the modern consumer is not only focused on the product marketed by the company, but also on its values ​​and ideologies.

Partner with a company that does not have the same moral, ethical and ideological values ​​as yours can bring great complications to the image of your business. Especially if the other company gets involved in controversial issues.

How to avoid?

Once again you need to research very carefully about the whole history of the company that you intend to make a business partnership with. Give preference to companies that have values ​​aligned with yours.

What are the most common types of business partnerships?

There are several ways to make a business partnership, among them, the best known are:

1. Incubation of companies

One of the best alternatives for businesses that are starting their activities in the market, but that still do not have enough experience to handle the challenges that a business offers. In addition to opening up numerous possibilities for partnerships with companies, suppliers and investors.

2. Outsourcing of activities

Outsourcing service is a trend that has grown a lot because of its advantages. She:

  • Reduces costs;
  • Eliminates bureaucratic processes;
  • It alleviates the company’s operational tasks;
  • Increases your productivity;
  • Generates jobs;
  • It is financially viable for both parties.

Whichever form of partnership you choose, it is important that you study the advantages and possible disadvantages a lot and that choosing the best form of partnership is done taking into account the profile and needs of your company.

So opting for partnerships is a guarantee of success!

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