Strategic Alliance
Categories: Company Management
NATO was one. The good guys against the Eastern Bloc, or whatever you wanna call ‘em.
These things happen in business as well. A small publisher wants exposure, marketing, distribution to the clients of a big, slow-growing company that “owns their market.” The behemoth wants to look cooler, to appeal to a younger demographic, the have some…growth. So they open their doors and give distribution to the little company, in a strategic alliance.
The little company gives a volume discount price to the big company to sell their wares at scale, in big volume; the big company promotes the little company’s wares on their homepage and in their 11,000 stores. If the alliance works well, odds are good that the big company buys the little company down the line.
In essence, the strategic alliance was a risk mitigator for the acquirer. And it makes sense if you don’t like risk.
