Strategic Alliances to Increase Market Share

Increase Market Share

Few, are the businesses that do not desire to increase their market share. Unfortunately, very few know how to achieve this lofty goal. Below are a number of ideas that should prompt your thinking in areas of developing strategic alliances to increase your market share.

Co-branding such as snack manufacturers who are now mixing two nationally known names and logos on a single product. Examples of this are Betty Crockers' Soda-Licious, soda pop fruit snacks, made with 7UP and 7UP Cherry. Also, is the popular milk chocolate-covered Pretzel Flipz by Nestl? featuring Rold Gold pretzels. In other market segments examples are Crest toothpaste with Scope mouthwash included. At Ford, they co-brand both with Eddie Bauer and Harley Davidson.

You can gain access to new markets both domestic and international. Copeland Corporation joined with the largest compressor manufacturer in India, Kirloskar, to bring air conditioning to a growing middle class in that country.

You will find that partnering can provide the benefit of positioning for future needs not yet known to you or your industry. An example, a lead-user firm is one whose present needs will reflect its segment's needs in future months or years. Through partnering, one company can assist another in leapfrogging current industry leaders. Cooperating with newer firms more willing to pursue a riskier development strategy to gain market shares does this. This strategy can aid companies, large and small, in more rapidly and efficiently reaching their collective goals.

Additional business to justify operating a production facility. In developing strategic alliances with competitors, you might do the production for both. This is similar to retailers that have a store brand developed by the recognized national brand manufacturer.

Opportunity to develop a private labeling or branding identity. American Dental Cooperative, a distributor in Nashville, TN has been successful in this area as has Power Heavy Duty in the heavy-duty truck repair industry.

Sales lead and help in procuring new business. Brian Potts, a VP at 3M recently made this offer to his strategic building service contractor customers at their CEO retreat in Mexico. He detailed how other 3M divisions are most likely are selling the customers that the contractors seek and how they could take advantage of those already established relationships.

Opportunity to expand business with new or related product innovations and service offerings. Helen Chavez at La Tapatia Tortilleria partnered with a competitor to serve a large grocery store chain in California and ended up double dipping for her effort.

Preferred supplier status as Steelcase in Grand Rapids, MI, awards to suppliers that have proven their performance abilities. These suppliers have to earn their way to the top of the chart, and when they do they receive the benefits of being a preferred supplier.

You can reduce direct competition as achieved by the Sun/IBM alliance has created the Java operating system to keep Microsoft at bay.

To gain market share, Lexus and Coach, the New York-headquartered manufacturer of fine leather products teamed up in an exclusive partnership to produce the Limited Lexus ES 300 Coach Edition.

Geographic expansion is what happened to Ronald Fink?s West Palm Beach, FL company, RGF Environmental Group, following a trip to Asia with other local CEOs and Ray Reddish, a senior management analyst at Florida?s commerce department. Within 18 months of his trip he had hired 14 new employees just to handle his Pacific Rim business. Some states aggressively partner with local manufacturers to expand exporting there by increasing state revenue.

Create marketing synergism to the consumer through cross promotion like Blockbuster and Dominos did. Blockbuster held a promotion that required a customer to rent three movies and in return receive a $10 savings book for Dominos Pizza. Both partners received increased traffic through the joint promotion. This can easily be done at the local level between, as an example, the drug store and the dry cleaners.

Barriers to market entry by a new player; this protects the current players as did two telephone companies in the greater Los Angeles area. They partnered to serve UCLA in a method that closed an opportunity to a new provider attempting to enter their market.

Marketing assistance to support order volume for products as when a small company develops an alliance with a large company. This is common in the pharmaceuticals industry.

Your imagination and ability to implement are your only true obstacles.

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Article adapted from Developing Strategic Alliances by Ed Rigsbee, CSP. Published by Crisp Learning, 2000.

Ed Rigsbee, CSP, is also the author of PartnerShift-How to Profit from the Partnering Trend and The Art of Partnering. Rigsbee has over 1,000 published articles to his credit and is a regular keynote presenter at corporate and trade association conferences teaching North America how to access Your Collaborative Advantage. He can be reached at Ed@Rigsbee.com or http://www.rigsbee.com

Ed Rigsbee is also the Executive Director of a non-profit public charity based in California.