What are the characteristics of a good partner in a strategic alliance How do these partner traits help make an alliance successful?
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The past 18 months have been unprecedented in many ways. The resilience of companies has been tested, while the pace of technological disruption and digitisation have accelerated. For example, Deloitte’s survey of insurance companies found that 79% of respondents believe the pandemic uncovered shortcomings in their company’s digital capabilities and transformation plans. Show
At the same time and in particular in financial services, digital customer engagement has been turbocharged with increasing digital adoption across products and demographic segments. Not surprisingly, many companies are looking to accelerate digital transformation to keep pace with changing customer preferences and to manage increased cost pressures through technology-enabled solutions. But how can they do this? In interviews we conducted with Swiss-based financial services M&A and Corporate Strategy executives, a strong consensus emerged that strategic alliances, like joint ventures, will play an important role in accessing those capabilities. This view is supported by our recently published CFO survey. Almost half (46%) of the CFOs surveyed in Switzerland are thinking of pursuing strategic alliances with corporate peers and ecosystem start-ups. In our two part series on ‘Strategic alliances: the silver bullet to recover and thrive in the new normal?’ our goal is to explore in part one how today’s business context influences the attractiveness of strategic alliances and in part two introduce our five success factors to harvest value from strategic alliances. Part 1 - Four characteristics that make strategic alliances irresistibleAlmost half of Swiss CFOs are thinking to pursue strategic alliances. Financial services executives we interviewed are similarly enthusiastic. But why and should you be as well? Among the M&A and Corporate Strategy executives of Swiss-based financial services companies we talked to for this article, a strong consensus emerged that strategic alliances will gain in importance as an element of corporate strategy. The executives highlighted that in a context of rapid digitisation, including the increasing importance of marketplaces, platforms and ecosystems in the distribution of products, strategic alliances can offer a fast and sometimes less risky access to assets and intellectual property compared to ‘build’ or
‘buy’ strategies. In this first part of our series on ‘Strategic alliances: the silver bullet to recover and thrive in the new normal?’ we explore how in today's business context, strategic alliances (‘to partner’) have grown in attractiveness at the expense of organic growth (‘to build') and traditional M&A (‘to buy’). We find four characteristics that stand-out:
These four characteristics will help Corporate Strategy and M&A departments better understand for which strategic ambitions strategic alliances offer an advantage over organic growth or traditional M&A. The four characteristics
Our venture investment strategy focuses on start-ups that also have the potential to advance
our digital offering. Furthermore, we want to bring some of that venture capital/portfolio mind-set with its ’fail fast’ philosophy into other parts of our organisation, to encourage innovation also in the core business.
Electronic
payments and fund platforms are just some examples of sub-sectors that are fast growing but also fast consolidating, with high valuations. SIX Group’s disposal of its cards business to Worldline, and Credit Suisse’s disposal of CS Investlab to Allfunds, are both examples of partial exits by diversified FSI groups whilst retaining the ability to benefit financially from further consolidation. The fact that the seller ultimately remained a customer of the disposed business is likely to have
further increased the attractiveness of ’paid in shares’ disposal proceeds.
We decided to create a strategic alliance with the provider of one of our trading platforms not only because we like the product but also because we believe in our partner’s ability to innovate. Having an equity stake in our
partner sends a strong signal to the market about our commitment and secures us a seat at the table when strategic decisions are made.
The B2B broker platform SOBRADO is a great example of a marketplace where insurance companies and brokers have partnered to digitise the value chain for the benefit of all
market participants. The ownership of SOBRADO is open to its business users, so everybody can participate in the financial value. The Strategic Alliance Life Cycle: key phases and activitiesContacts Indrek LuukPartnerIndrek is a M&A Transaction Services Partner with more than 15 years of transaction advisory experience in Switzerland, the UK, Australia, Germany and Estonia. For the last 10 years Indrek has been ba... More Michael Van Der BoomPartnerMichael leads the Deal Strategy & Operations team in Switzerland. He works with corporate and private equity leaders on M&A deals and organisational transformations. Michael has worked across several ... More Kristina FaddoulPartnerKristina is a Partner in the M&A Integration and Separation practice at Deloitte. Based in Zurich, she has a deep experience across the entire M&A lifecycle, and has been focussed on delivering comple... More Joël WeberSenior ManagerJoël is a Senior Manager in the M&A Integration and Separation practice at Deloitte Switzerland. Joël advises clients on how to design and deliver large-scale, cross-border transactions and on realizi... More Fullwidth SCC. Do not delete! This box/component contains JavaScript that is needed on this page. This message will not be visible when page is activated. What makes a successful strategic alliance?Successful alliances depend on the ability of individuals on both sides to work almost as if they were employed by the same company. For this kind of collaboration to occur, team members must know how their counterparts operate: how they make decisions, how they allocate resources, how they share information.
What are the characteristics of a successful partnership?Seven Characteristics of a Great Partnership. Trust. Without trust there can be no productive conflict, commitment, or accountability.. Common values. ... . Chemistry. ... . Defined expectations. ... . Mutual respect. ... . Synergy. ... . Great two-way communications.. What do you mean by strategic alliance .how do you implement successful alliance?A strategic alliance is an arrangement between two companies to undertake a mutually beneficial project while each retains its independence. The agreement is less complex and less binding than a joint venture, in which two businesses pool resources to create a separate business entity.
What are the three factors that can lead to the success of a strategic alliance?The most outstanding factors affecting alliance success are shown to be a good relationship with the partner, mutual trust, a minimum commitment between the parties, and clear objectives and strategy.
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