A further slowing in growth
You may have reached a point where you’ve decided to explore alternatives to exporting alone to Asian markets. Forming a strategic alliance with another business of similar size and market presence can often be mutually beneficial. It’s important to understand how these kinds of partnerships work – and what the benefits are for your business.
Going it alone means doing all the work and paying all the costs on your own. By partnering with another party, you may be able to:
A strategic alliance is when you and your partner work together towards a common exporting goal – pooling your resources, skills and even capital for mutual gain. For example, your business might export wine to China and you decide to partner up with an Australian cheese exporter with the aim of selling both products together – to be complimentary.
A strategic alliance like this is a type of cooperative agreement involving two partners who work together to achieve their mutually beneficial objectives.
In some cases, you have no choice other than to form a strategic alliance with a local partner. For example, some countries (such as Indonesia) limit foreign investment in some sectors and don’t allow it in others.
If you want to enter an Asian export market and your business falls under certain limitations, you’ll need to form a strategic alliance with a local partner.
Even if foreign ownership isn’t limited, you may find it beneficial to form a strategic alliance with a local business in order to take advantage of its existing distribution network, supplier relationships, brand reputation and customer base.
Take a look at Austrade’s information on export strategies – plus the useful website links to export planning and strategy.
Make sure you understand exactly what’s at stake before entering into any strategic alliance. There are plenty of benefits to forming a partnership when exporting to Asia, like:
As with any partnership, there are risks involved. When it comes to exporting alliances, loss of control over important issues such as costs can be a factor. Other disadvantages of partnering up in Asian markets include:
If you’re confident that the pros outweigh the cons, you’ll want to take steps to ensure a successful alliance. You’ll need to find the right partners and develop a clear, written agreement that spells out each party’s roles and responsibilities.
You might be surprised to find out that your competitors could be some of the best allies for your business – especially if they can help you gain a market share in your target Asian market.
The types of partners you could link up with include:
It’s important to seek out those companies which share your business’ ethics – and that both you and your partner are clear about expectations and outcomes. Maintaining open and strong communication is essential.
See NAB’s International and domestic trade finance options to help finance your export partnership.
So, you’ve found the perfect partner, done your due diligence, and both parties agree that the alliance is an excellent fit. As confident as you may be that your partner shares your ethics, objectives and expectations, you’ll want to formalise your alliance in writing.
Though you might not be forming a separate business entity, it’s in both parties’ best interests to be crystal clear about:
Any advice contained above has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice, NAB recommends that you consider whether it is appropriate for your circumstances and that you review the relevant Product Disclosure Statement, Terms and Conditions or Financial Services Guide.
© National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686.
© National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686.