Strategic partnership


A strategic partnership is a an agreed-upon collaboration between businesses with common missions. Although partnerships can take on a number of objectives and levels of formality depending upon the nature of the agreement, the overall goal of strategic partnerships is to share resources in a way that promotes growth for all partners. Below find Partnerships can such as take place between businesses in the same industry or even across industries.

Types of Strategic Partnerships

HorizontalBusinesses in the same area (i.e. competitors) agree to collaborate in a way that will improve their market position.
VerticalA business collaborates with companies in its supply chain (its suppliers and/or distributors). Vertical partnerships often allow businesses to minimize risk in the supply chain and obtain lower prices in exchange for long-term commitment. Also known as channel partnerships [LINK] or supply chain partnerships.
IntersectionalBusinesses from different areas agree to share their special knowledge for the advancement of all partners.
Two or more businesses form a new company. The new company is its own legal entity, and its profits are split according to terms spelled out in a formal contract.
EquityA company acquires a minor equity stake in another business in exchange for a monetary investment. Such exchanges can accompany other types of collaboration and, to a certain extent, agreed-upon access to decision making.

Whether initiated between businesses in the same industry segment or businesses in completely different industries, partnerships can also be classified according to their purpose. For example: Development Partnership, Strategic Integration and Referral Partnerships, Cobranding, Strategic Sales Partnerships, Supply Chain and Channel Partnerships