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Contributor: Harbir Singh, The Mack Professor, Professor of Management; Vice Dean for Global Initiatives; Co-Director, Mack Center for Technological Innovation, The Wharton School, University of Pennsylvania.
Determine what types of partnerships are the best match for your strategic goals, increasing your success in managing uncertainty, reducing risk, and driving growth.
All companies need growth strategies that minimize risk while enhancing their competitive positions. As the need to respond quickly to market opportunities accelerates, so does the difficulty and risk. And many companies don’t have the necessary resources and assets available for a rapid response. Partnerships can decrease costs and increase flexibility, thereby minimizing risk. But many organizations are all too familiar with the risks of partnerships themselves; and when they avoid those risks by opting out they lose the potential of some highly advantageous alliances.
Wharton management professor Harbir Singh has developed a way to mitigate those risks — and realize the full advantage of partnerships — by employing the right kind of partnering strategy. Singh has identified three distinct strategies for successful alliances, each with unique strategic objectives, key success factors, and potential problems. By clearly identifying what you want to achieve through the partnership, and choosing the appropriate strategy, you can stretch your innovation dollars, share in the costs of investments, better handle uncertainty, and access new resources, capabilities, and markets.