Strategic Business Thinking

Strategic thought is strongly influenced by one’s conception of war and peace. Some tend to regard war as a human aberration and peace as a normal situation. Others, in contrast, are inclined to accept that nations are constantly entangled in a peaceful competitive battle that is fought with economical and political means. One should discern a continuum that exists between two extremes; at one end complete Peace (status quo) and at the other end Total War; it is not a black and white view. Even in times of peace there is always economic rivalry and the business firm plays an important role in that battle. That is one of the reasons why governments and politicians support firms in their own country.

Such firms are considered strategic because:

– They are important for the economy (export, employment);

– They are important for maintaining a technological ascend;

– They are important because they are a basis for economic independence (autarky).

Because of the changing environment the conceptions about military strategy are not static but are constantly in a state of development and adaptation. Especially the technological developments after 1945, the advent of ballistic missiles and the nuclear bomb, had a profound influence on contemporary strategic thought. Concepts like ‘mutual assured destruction’ (MAD) and “balance of terror” emerged which influenced politics and strategic thinking. Because the environment of the modern enterprise differs considerably from these notions, we have elected not to include the nuclear dimension in this manuscript.

The present day world of business can be well compared with European political relations as they existed in the Middle Ages. That world consisted out of a kaleidoscopic patchwork of competing small kingdoms, duchies, dioceses and city-states, to name a few. They were frequently at war and often employed mercenaries like the Swiss pike men and the Italian condotieri. Only much later, by marriage, alliances, heritage and conquest, did larger nation-states (read: corporations) slowly emerge. For instance, present day Italy only exists a mere 140 years (since 1871). Before 1871 Italy consisted of many small states, republics, city-states (like Naples) and kingdoms (like Sicily).

Strategic Business Partners Can Fuel the Growth of Small Businesses

The concept of Strategic Business Partnership has gained importance amongst small and mid-sized companies recently. When two companies involve in a mutually beneficial dealing for a stipulated time as a part of their corporate strategy, they are considered to be strategic business partners. The company to be chosen for partnering can be a supplier or a vendor or a consultant or an advertising agent.

This is a lot different from the traditional partnerships between companies. The partnering companies will not be entirely dependent on each other, but they only get involved in other’s business in specific ways. These partnerships concentrate more on business transformation rather than just a business transaction between two companies.Strategic alliances have proved to be stepping stones to success for many small and startup companies. By entering into this partnership, companies are mutually benefitted and add value to each others’ business directly or indirectly. Beyond these obvious advantages, other advantages of an SBP are as follows

1. Vendor Partnership:

  • Through a strategic alliance with vendors or suppliers, a company can get exclusively tailored services that are suitable for their products style and customer needs which ultimately results in product enhancement.
  • Can save the time and money on product research and development, as it will be taken care of strategic partner(vendor). This allows the small companies to focus more on the expansion of business.
  • With increased product quality and a new line of products, there will be a definite increase in the sales and revenue.

2.Outsourcing Partnership:

  • For a startup entrepreneur, outsourcing their accounting process is much simpler and cheaper rather than hiring accounting professionals and setting up a department for the same.
  • Getting access to skilled resources on each niche field is much easier when there is a strategic alliance with another enterprise who are experts in their field.
  • This is much suited for companies where 24*7 customer support is mandatory.

3. Business Consulting & Technology Partnership:

  • Strategic Partnering is the ideal way for small business owners to make use experts’ knowledge on niche areas and technology of another company.
  • Provides startups with clear guidance on trade tactics and strategy
  • Through this partnerships, small companies can expand their product’s reach and gain new customer base beyond all geographical barriers.

At this point in the corporate world, business collaborations and team efforts are the key factors that determine the fate of every startup. Hence, finding the right partner opens up many doors of opportunities for small or startup companies.