HR Strategy

Partnerships: Creating a Willingness to Co-Invest and Share Risk

Partnerships can take many forms, but they all have one major goal: strategic strengthening while minimizing risk. Therefore, identifying both strengths and risks are equally important.

Forming partnerships is a common business strategy for generating mutual benefits for the companies involved. They often represent collaborations between competitors, meaning the companies are agreeing to share profits as well as risks. Convincing another firm to enter a partnership is not always easy because it usually requires a willingness to give up some trade secrets and control, while assuming a share of the risk at a financial price. That is why large corporations often tend to choose mergers and acquisitions as their route to gaining market share or innovation. They are able to retain control in exchange for assuming all the risk. For smaller businesses, partnerships make better sense because they limit risk while creating a larger pool of resources, and they require less permanent i...

Please Login for full article.