A successful strategic alliance is incredibly powerful, bringing two or more companies together to achieve mutual goals that would have been impossible as a single entity.
Over the years Accountants Plus have been involved in the creation of successful strategic alliances worth many millions of pounds and can spot the signs of both beneficial and dangerous business relationships from a mile away.
We provide expert advice to businesses and individuals looking to maximise their market reach, or enter a new market altogether, by establishing a strategic partnership.
Strategic alliances include:
- Joint ventures
- Equity strategic alliances
- Non equity strategic alliance
In many industries, the biggest success stories are tales of collaboration and of powerful strategic alliances formed between multiple independent firms.
Building strong strategic alliances with other businesses can be a fantastic way to gain a competitive advantage, allowing you to pool resources bringing all the power and knowledge of two or more companies together to work towards a shared goal.
Strategic alliances come in all shapes and sizes from an equity strategic alliance where one company purchases a significant percentage of the other to a one off agreement where two entities come together for a single mutually beneficial project before going their separate ways.
Successful strategic alliances have the potential to skyrocket your business growth but pick the wrong alliance partners and there could be serious issues.
Our speciality is helping Glasgow businesses to reach their maximum potential, and if that means forming a strategic alliance, then that is exactly what we will help you do.
Different Types of Strategic Alliances
Joint ventures
Joint ventures involve two businesses coming together to form a separate company in which they each hold a 50% share.
If the same happens but one company owns a larger share than the other in the child company, it is known as a majority owned venture.
Equity strategic alliance
When one company purchases a certain percentage of the other it creates a strategic alliance known as an equity strategic alliance. There is often a significant change to the business environment of the company being partly purchased when such an alliance is formed.
Non equity strategic alliance
A contractual agreement between two or more separate businesses to pool resources or share certain assets for either a mutually beneficial project or simply to save money.
Why Choose Accountants Plus?
If you are considering a strategic alliance, it is essential that you seek highly specialist expert accounting advice before proceeding.
You have worked far too hard to throw away more of your business than necessary or getting ripped off in the formation of a less than strategic ‘partnership’.
Chartered accountants play a major role in the development of strategic partnerships and here are just some of the reasons why:
Financial Security
We will analyse all aspects of a potential agreement including doing full due diligence and assessing the financial health of your potential partners in extensive detail.
We will then provide you with a full risk analysis and our expert advice on the suitability of the agreement, especially from a financially and tax perspective. Detailed legal advice is also required, and we are happy to collaborate with your corporate lawyer. We can’t make the decision for you, but we can make sure you have the full picture when deciding if you wish to proceed.
Negotiations
Both equity and non equity strategic alliances involve significant amounts of negotiating between the parties involved.
At the end of the day, both sides want to feel like they got the best deal. Together with your corporate lawyer, we will make sure that you get the most favourable terms possible.
Ongoing financial Analysis
We will monitor the success of the strategic alliance over time and ensure that it remains financially beneficial to you.
As soon as there is doubt or signs of concern, we will inform you and you can decide what to do next. Should you wish to exit the agreement and become a separate business entity once again, we will help you create the perfect exit strategy together with your corporate lawyer.
Benefits of Strategic Alliances
There are so many types of strategic alliances out there, forming one can be incredibly daunting. After all, you have come so far on your own, a joint venture is not something you want to enter into lightly.
However, strategic alliances create opportunities for growth that simply don’t exist otherwise, or would’ve taken many more years to achieve without other partners involved.
Just some of the benefits that a strategic alliance can bring to a business include:
Reach new markets
One of the biggest reasons to form strategic alliances is to access new markets that would otherwise be closed or extremely difficult to gain access to.
If you are looking to expand and help your company develop, an effective strategic alliance is one of the most efficient ways to do so in a short period of time.
In fact the benefits of acquiring a strategic alliance with a leading firm in another field can be so great that there is often a huge amount of competition to make a deal, with the remaining independent organizations unable to compete.
Reduce Operating Costs
Share resources and you don’t need to buy or rent them yourself. That is as simple as the thinking behind a strategic alliance can be.
Sharing equipment, tools, capabilities and core competencies has been the foundation of many a happy and long-lasting business agreement.
Competitive advantage
Alone, two or more businesses may fight tooth and nail for their share of the industry pie, but together they can blow away the competition. It doesn’t always work quite like that, of course, but many markets are dominated by companies who have bought our competitors or merged over the years.
Get in touch
To learn more about how to form a strategic alliance, the mutual benefits of doing so, or to get advice about a strategic alliance you are already in or considering, contact the accounting experts at Accountants Plus today.
