3 Types of Partnership to Grow Your Business
There are many ways to grow your business. One of the means of scaling is through strategic partnership. The main reason why you need to forge partnership is to co-create values that is difficult or ineffective for your company to do by yourself, but will add tremendous value to your target customers.
If you are running or working in a startup, forging partnership with key players is key to get recognized by your target customers, acquire users and generate revenue. Corporations use partnership as a means to lend capabilities and brand equity that they do not possess while reaching out to wider pool of customers.
When done right, partnership can widens distribution, increases exposure, generates more sales and enhances brand perception. There are three types of partnership that you need to be aware of when you're growing your company:
1. Product / Service Partnership
Partnering up with other companies to use their resources and knowledge to build a new product or service for your company.
Eg. Intel and Samsung
In order for Samsung to develop smartphones, one of the key resources they require is a chipset from Intel within the phone. By partnering up with Intel, Samsung could expect discounted purchases and priority distribution from Intel. The partner's brand does not necessarily have to be present and usually remain anonymous.
2. Brand Partnership
Co-branding with other company to create new value offerings together in order to serve a joint customer base. This usually happens when you want to utilize not only your partner's industry / technical expertise and resources, but also their brand and customer base to make this joint offerings more successful.
Eg. Nike and Apple
Nike (athletic shoes expertise and asset) and Apple (consumer technology expertise and asset) worked together to design a series of running shoes built in with iPod kit for professional and amateur runners to track their performance and seamlessly integrate music while running.
3. Distribution Partnership
Partnering up with another companies for their expertise and distribution channels using them as distributors to access their customer base.
Eg. Starbucks and Pepsi
In order to gain new customer base, Starbucks needed to enter the retail industry with a series of packaged drinks. By partnering up with Pepsi, Starbucks tapped on their F&B expertise and access to retailers. This resulted in bottled Mocha Frappuccino and other bottled lines distributed in supermarkets and other general retailers.
These are the three types of partnership that can be created. Not all partnership forged will generate results that you hoped to achieve. Hence, it is essential to clarify the intention of partnership, what types of companies and industries to co-create value as pre-requisites before determining what types of partnership to engage in.