Strategic alliance: No man is an island in business

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Reylito A.H. Elbo

Reylito A.H. Elbo

CHICAGO Bulls rookie forward Stacy King scored one point in a basketball game in which Michael Jordan scored 69 points. The rookie said in his analysis of the game: “I’ll always remember this as the night that Michael and I combined to score 70 points.”

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I’ve seen too many organizations work tirelessly to develop the same approach. In business, it is often called “strategic alliance” or any agreement between two, if not more than three independent parties who come together to achieve a common objective—to win markets and secure industry leadership.

The participating organizations remain independent and separate by their different legal personalities and stock ownership, but agree only in sharing their expertise in their respective capacities which includes capital knowhow, intellectual property, distribution channels, sales and marketing, and many more.

A good example of a strategic alliance is in the telecommunications industry when Smart or Globe partners with the makers of Apple, Samsung and other branded smart phone devices to sell its service to one consumer market. Sometimes, we see McDonald’s or Jollibee partnering with producers to sell movie titles via plastic mugs for cola drink, if not toy models to one common market.

There are many variants of a strategic alliance, but one thing that stands out are “coopetition” and “frenemy” where competitors cooperate to achieve a common purpose.

In the automotive industry, one leading example is the New United Motor Manufacturing Inc. (Nummi), which was started in 1984 through a joint venture agreement between General Motors and Toyota. Nummi closed in 2010 and resurfaced after several months with the facility being owned by Tesla Motors Inc., an American company producing electric cars and electric vehicle components.

The thinking goes into a strategic alliance is valuable—it is expected to lead to a more robust understanding of the industry and the markets. Now how would you explain “strategic alliance” to the owner of a sari-sari (mini convenience) store or even to a street-corner laundry shop near you?

Then, you’ll probably ask me why it’s important. Of course, it’s important as we wish our small business people to progress by learning management buzzwords and adapt it than copy what the other stores are doing resulting in a destructive lose-lose competition.

Like you, at first I thought this was a clever hoax designed to ridicule the store owners. It is not. There is value to our small-time business people to learn “strategic alliance.” I know because I came from a situation when my parents tended a small dry goods store in Laguna that boomed with profit through consignment, when distributors trusted us with their branded products.

So anyway, I am darned proud where I came from where “strategic alliance” is alien to people. Oh well, maybe people and businesses are doing it except that they don’t know what it is called. The point is that a “strategic alliance” can be applied everywhere. You can do partnership with everyone as long as you retain your individual unique personality.

But then a “strategic alliance” is like dissecting a frog. When you are in medical school, you are required to dissect a frog, if not a cat. If you’re not a medical student, you will not be interested in it. And you don’t even care if the frog or cat dies in the process.

The same thing is true in the case of management buzzwords. If you’re not in management, you may not be interested to read anything that’s being dished out in this space every week, unless you want to be entertained with the irreverent examples and stories.

I enjoy reading and writing buzzwords as my anchor in learning and unlearning management principles. But for me, the most moving experience is when you finally apply those learning in real work life situation, even down to the barangay (local community) level.

In conclusion, I would say that a “strategic alliance” is the most important concept that you can find in business. Ignore it at your own risks. As a management journalist, I like the idea of living and working in a society where it is considered an acceptable occupation to basically sit around, drink coffee, while enjoying people passing by and try to guess what they’re trying to do with their own life.

That’s because I’m always on the lookout for something to interpret and write.

Rey Elbo is a business consultant specializing in human resources and total quality management as a fused interest. Send feedback to elbonomics@gmail.com or follow him on Facebook, LinkedIn, and Twiter for his random thoughts on Elbonomics.

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