In 2014, Uber and Spotify launched their new partnership. This allowed customers to listen to their own music during a ride. This strategic business partnership helped Uber to personalise the experience of a car journey. It also increased the appeal of Spotify to younger audiences.
A business partnership is one of the most common ways to run a business successfully. It is not uncommon to see two separate brands working together, in the UK, to achieve a common goal or objective. What’s more, there is a strong likelihood that your best-liked consumer products are the fruits of a collaboration between two separate brands. This in mind, is a partnership worth its weight in gold?
1) Two heads are better than one:
Two or more people or organisations working together have a better chance of solving a problem than a single person or organisation. A partnership can make use of the resources owned by each entity involved. That is to say, a partnership gives a business access to additional resources. It opens up the opportunity for businesses to share their resources with one another in a way that benefits all parties involved. To solve a particular problem, for example, a partnership can harness the brainpower of all the entities involved. A partnership gives a business the edge it needs to surpass its competitors.
2) Expand market and customer base:
A major goal for most brands is to grow their customer base. A partnership can grow a business’ customer base and expand its market. In other words, a partnership can deliver access to new markets and customers.
For example, the partnership between Uber and Spotify expanded their customer base to include music lovers who are willing to take up a ride-hailing service – Spotify devotees may opt for an Uber instead of its rivals. Through this strategic partnership, both companies were able to grow their customer base and expand their market. That is, they exposed their services to a brand new audience. A partnership can take a business to a completely new level.
3) Access to new products and services:
A partnership allows a business to access new products and services. Put simply, it accelerates new product development cycles. Businesses in a partnership share ideas, materials, and expertise. As a result, a partnership gives a business the opportunity to improve current products or services and create new ones. In addition, a partnership allows a business to diversify its products and services.
4) There is strength in numbers:
A partnership can strengthen weaker aspects of a business. This means that a good partnership is formed where each member brings their individual strength – skills and knowledge – to the table. A partnership amplifies the strengths of a partner to compensate for the weaknesses of the other partner. In a partnership, the entities involved usually complement each other.
5) Shared responsibility:
The entities involved in a partnership share the costs, risks, and rewards of a business venture. Any financial loss incurred is shared among partners likewise any profit. A partnership shields an individual or organisation from assuming full responsibility for any financial mistake. This means that a partnership dilutes the negative effects of a financial mishap. A partnership also reduces the cost of production. It allows partners to pull together their resources for a common goal or objective.
6) Brand awareness and trust:
Brand awareness is very important to a business and so, too, is brand recognition. Through partnerships, businesses increase their brand awareness by accessing different routes to market. Businesses also increase their brand awareness by being exposed to, and by using, the marketing strategies of their partners.
What’s more, collaborating with a trusted brand can increase brand trust and consumer loyalty. A partnership can help a brand extend additional value beyond what it can provide alone. This rewards customers, drives sales, and increases brand trust and loyalty.
7) Business expansion and growth:
A worthwhile partnership allows a business to grow, increase revenue, and increase profitability. It allows a brand to access new technology or intellectual property. Such a partnership can have a major influence on the speed and ease with which a brand achieves its goals and objectives. In addition, working and collaborating with likeminded brands can provide enormous benefits such as a reduced cost of production. This can be a major factor in a brand’s ability to win more business – brand expansion.
Defined as an association between two or more entities, a partnership is an effective way to build a business, boost awareness, reduce the cost of production, and grow one’s customer base. It offers a competitive advantage to the entities involved. What’s more, a partnership can take a business to a new level – new products and new markets. A worthwhile business partnership benefits all involved: that is, it is a win-win situation. Hence the expression, “rising tides float all boats.”