qprev_HBB Manual 2.qxd - Small Business BC

• Strategic alliancesAnother name for a partnership or joint venture,this term is used to describe situations wherecompanies align their operations to achieve acommon goal. This can involve suppliers andproducers sharing the costs of research anddevelopment for a new product, or smallcompetitors banding together to form a strongerposition against another competitor. Examplesinclude airline companies utilizing each other’sground services at certain airports to avoidduplication and medical technology companiessharing the costs of research and testing.• Virtual companiesAdvances in computer and telecommunicationstechnology now allow a business to compete inworld markets yet operate from a remote base,including a home office, a vacation cottage or asailboat. For example, a coupon marketingcompany could operate from a Gulf Island homein B.C. but hire representatives in every majorCanadian city to contact restaurants, golf courses,cleaning services and other coupon users. Thecoupon books could be produced and distributedunder contract with other local agencies.Since the whole operation is outsourced, thisnationwide business appears to be much largerthan it really is. Maintaining contact with agentsvia fax, phone and e-mail, the company’s apparentlarge size is virtual rather than real.A new paradigm emerges“...in our view, teaming up with otherorganizations of various sizes will soonbecome the modus operandi for all business anew paradigm for success in an evolvingglobal marketplace. After all, our nature is toaffiliate with others...As millions leave behindthe social organizations we call corporationsand agencies, it’s only natural we turn to newways of joining with others.”Paul and Sarah Edwards and Rick Benzel.Teaming Up (1997)Due to the numerous ways in which alliances andpartnerships can be formed, this approach allowsfor considerable flexibility and creativity –qualities that will be needed in the ever-changingnew economy of the future. However, becausethe parties in network relationships rely heavilyon each other, there can be drawbacks and higherrisks. Yet the network strategy may be the onlyviable option for many small companies.Some things to evaluate when consideringthis approach:• Does a network already exist? – Clearly,you’ll need to be able to find suitablecompanies to network with. Some may comefrom business referrals, others may be found intrade publications or from manufacturer’sdirectories. Mature industries – such as foodand beverage preparation or toys and gamesmanufactures – that have many suppliers,producers and distributors are easier tonetwork with because the infrastructurealready exists and you simply need to findwilling partners. Emerging industries – such assoftware production or cellular phonetechnology are also ripe for networking.• Are the benefits of networking real? – Sinceowners may not have considered networkingas a growth strategy, you will probably have tosell people on the concept initially. They maynot immediately see the benefits, so you willsolutions for small business home-based business 95