Reimagining Industry Growth

Strategic Partnership Strategies in an Era of Uncertainty

Daniel A. Varroney

• Publisher: Wiley
• Year: 2022
• ISBN:
  9781119855934
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Unternehmensentwicklung

Tap into the potential of strategic partnerships with industry associations in this groundbreaking new book

Reimagining Industry Growth offers readers a blueprint to harnessing the power of leading industry associations as strategic partners. By utilizing those partnerships, business leaders will become able to leverage the collective strength of the supply chain to overcome challenges, address uncertainty, mitigate risks, and position their industries for growth.

The book provides an overview of strategic partnerships, how they work, and how they can be applied to industry relationships with trade associations. It includes:

• Illuminating and factual case studies outlining strategic partnerships in five different industry segments
• Roadmaps for executives to apply the lessons learned from industry success stories on leveraging relationships with trade associations
• Advice on how to move the needle for entire industries via effective strategic partnerships and achieve unprecedented growth

Ideal for executives, managers, business leaders of all kinds, business students and professors, and association executives. Reimagining Industry Growth is required reading for anyone who hopes to tap into the potential strength and value of effective strategic partnerships.

1
Strategic Partnerships

Persistent Hard Times: The Mother of Strategic Partnerships

Just as necessity is the mother of invention, hard times may be the mother of strategic partnerships. Turbulent and uncertain times have always inspired people to search for new and innovative ways to endure and to triumph. Ordinary people sometimes rise to greatness in a crisis. We are capable of overcoming adversity and achieving lofty and heroic breakthroughs during moments of intense challenge. Some great business partnerships were created to weather tough times; sometimes those tough times are due to internal issues, sometimes external issues, sometimes uncontrollable circumstances, sometimes extraordinary opportunities, and occasionally in preparation to achieve the next breakthrough.

Defining Strategic Partnerships

It must be said up front that a strategic partnership does not guarantee success. Successful partnerships are not a given. In fact, a good and lasting strategic partnership is not unlike a good and lasting marriage. It requires shared vision, shared values, clear and honest communication, perseverance, and perhaps more than anything, commitment—unswerving commitment that breaks through the most difficult barriers. It is hard work.

It must also be said that strategic partnerships come in all shapes and sizes and textures and colors and flavors. Although there are general rules and organizing principles that provide the context and outlines, each one is—also like a marriage or long-term relationship—unique.

The generic term strategic partnership entered the business lexicon many years ago, and much has been written on the subject. Today, business analysts and consultants speak of strategic branding partnerships, strategic supply chain partnerships, strategic research and development partnerships, strategic finance partnerships, strategic human resources partnerships, and so on. Successful strategic partnerships have been highly effective in countering the negative forces of market volatility, particularly through the last several decades.

Wall Street's insistence on perpetual growth has sometimes been criticized as impractical, short-sighted, and greed-driven. But it has also spurred creativity and newly minted out-of-the-box thinking, and it has produced cooperation in unexpected places.

Most of the writing on strategic partnerships focuses on how companies have combined their strengths and mitigated their weaknesses to expand customer bases, brand recognition, marketing opportunities, and market reach to increase productivity, to broaden investment opportunity and sustainability, and ultimately to grow revenue and profitability for the participating companies. We shall be looking at an even more prodigious, inclusive, and ambitious type of strategic partnership—the sort that moves the needle for entire industries.

But first let's consider several of the widely hailed strategic partnerships so that we're on the same page regarding what we mean by the term, and then we shall explore the power of strategic partnerships through the lens of five industry trade associations.

Some Successful Strategic Partnerships

In 1993, Barnes & Noble teamed up with Starbucks Coffee “to provide a consistent, quality cup of coffee for readers to enjoy while perusing the latest best-sellers.”¹ Today, nearly every Barnes & Noble bookstore has a Starbucks café either conjoined or inside the store. The partnership has been a boon not only to both companies’ retail operations, but also to the pleasure of their shared customers. And while it may be a case of correlation rather than causation, it is interesting to note that Barnes & Noble is the last big box chain bookstore standing.

In 1994, Starbucks and PepsiCo joined forces to create the North American Coffee Partnership (NACP). Two years later they launched the now iconic bottled Frappuccino, and with it the ready-to-drink (RTD) coffee category in the beverage industry. Over the past 25 years, the combination of Starbucks’ coffee expertise with PepsiCo's vast sales and distribution network has both expanded and dominated the RTD coffee and energy drink sectors. NACP continues to innovate and grow. By 2016 it was a $2-billion-plus retail business in its own right.²

In 2015, Starbucks and Spotify began a collaboration that gives baristas and customers more say over local café music playlists, provides continuous access to music streaming through both Starbucks and Spotify apps, and allows premium Spotify members to earn Starbuck's rewards points. This strategic partnership was formed in response to rapidly changing music culture and preferences and the technological advances that seem to be driving them. Sharing customers has helped keep both brands not only relevant but on the cutting edge of customer satisfaction.

The keen observer will note that all three examples just mentioned involve Starbucks. This is not to intentionally promote Starbucks (which is one of the top 50 most valuable brands on the planet³), but to highlight a critical factor that is, deliberately, at the core of Starbucks’ meteoric rise and sustained growth: relationships. The value of genuine relationship orientation (both internal and external) in trailblazing through uncertain times, as we shall see, cannot be overstated. In the spirit of transparency, I was and continue to be personally greatly influenced by former Starbucks CEO Howard Schultz's Pour Your Heart Into It.⁴

There have been many fruitful and well-regarded strategic partnerships over the years. Consider, for example, Hewlett-Packard and Disney, Renault and Nissan, Apple and Nike (Nike+), Ford and Eddie Bauer, BMW and Montblanc, and many others that have likewise served the partnering companies (and their customers) well. A fair number of these partnerships (though sadly not most) have stood the test of time. There are only a few, however, that have actually transformed entire industries. These will be our focus. But first we must explore some of the guiding principles, values, and traits that characterize the most successful strategic partnerships and the leaders who forge them.

Some Defining Characteristics of Successful Strategic Partnerships and Their Creators

There are three primary intertwined passions that fuel the most successful CEOs, boards, and the strategic partnerships they create (see Figure 1.1):

1. Customer-centricity
2. Relationship-centricity
3. Business-centricity

Figure 1.1 The Makings of a Strategic Partnership

Source: Illustration artwork prepared by Erin Wagner, Edge Research.

The nexus of these three powerful driving forces is where great leaders and lasting partnerships reside, both in good times and bad. In trying times—times of change, challenge, and uncertainty—there is little hope for survival outside the confluence of customer-, relationship-, and business-centricity. The customer is preeminent for the simple reason that without a happy customer base, there is no business. So, let us start with the customer.

Customer Preeminence

The outside-in approach allows executives to see their company in its proper relation to the bigger picture. It starts with the perspective of the customer, the client, the end user. It seeks to thoroughly understand their needs, problems, hopes, and dreams. It seeks to overthrow assumptions and received wisdom and myths about what the customer wants and replace them with clear understanding and certain knowledge and truth about what the customer wants. This can often be achieved by systematically collecting and analyzing qualitative and quantitative research supplemented by simply listening to and internalizing customer feedback.

Another way of knowing what the customer wants is to understand what P.G. Wodehouse's inimitable Bertie Wooster referred to as “the psychology of the individual,” to understand the customer by understanding human nature.

Here again, Howard Schultz is my model for implementation of the outside-in concept. His thinking is captured perfectly by Matthew Dollinger in a Fast Company interview with a Starbucks manager named Kelly: “Starbucks’ goal is to become the Third Place in our daily lives … ‘We want to provide all the com...