Looking beyond what you know and diversifying into a new product area or region can be daunting. Finding business partners to aid you on this journey could mean the difference between success and failure.
In such a complex and cutthroat market, businesses need to understand the power a partnership can provide. When expanding into new markets and product areas, the strength of shared wisdom and resources cannot be underestimated.
As a recent article in the Harvard Business Review underlined, competitive threats are coming from everywhere. Agile and ambitious emerging market rivals and homegrown, tech-enabled businesses that play by different rules are disrupting marketplaces across the globe.
Holding on to the competitive advantages your business fought hard to win is getting more difficult as new competitors jostle for position from every direction.
Collaborate to compete
The same article revealed that by 2025 another 1.8 billion people will have joined the global economy, and global consumption is expected to nearly double, hitting $64 trillion. More than half that growth will come from emerging markets.
“Some of the new players focus on responding rapidly to the market, recombining technologies and squeezing out costs,” the article stated. “Others are adept at capturing new growth opportunities or reaching underserved markets with low-cost structures and no-frills products.”
Diversifying your business with new, competitive products and approaches in new markets in the US and overseas will be key to surviving and staying profitable in this rapidly evolving landscape. Many US SMBs will do this by joining forces with local or overseas suppliers.
These partners will help them create new products, break into new markets and spot emerging product and service opportunities.
Collaborate to thrive
Finding business partners to collaborate with has never been more important. Entering into a new overseas market is hard and time-consuming, and the right partnership can help alleviate those pressures.
In emerging markets, suppliers and partners might be pickier than you expect. They may have their own ambitions for joint ventures or reciprocal deals to distribute their own products. Selling the advantages of your own business to them may be just as important as doing your due diligence on them.
In turn, the right local partners will offer a deep understanding and knowledge of their regional markets, their needs and what prices these markets can bear.
A US-based lighting company was looking to break into the Chinese high-end construction market, but dominance by distributors with a local presence made doing so near impossible. One of their Chinese suppliers was looking to expand their domestic sales in China, but lacked the experience or pedigree to deal directly with high-end designers, architects and construction companies. The two agreed to form a strategic partnership in China.
Now, the US company can deal with Chinese clients through its established local presence, while the Chinese supplier benefits from having a partner experienced in dealing with high-end clients, and a boost to its reputation by being associated with an American company. Both were able to diversify and establish a business in China by forming a mutually beneficial strategic partnership.
Leveraging local experts when finding business partners is essential in unfamiliar markets. The south-east Asian market contains a diverse group of economies, consumers, regulations and stages of development. A resurgent India is a huge market for US SMBs looking to diversify into foreign markets, with India’s GDP exceeding $2 trillion last year. However, it can be a perilous market for those without the right knowledge. Partnering with knowledgeable and experienced local partners will help US businesses successfully diversify into these new areas and adapt products to suit the local market.
Use everything to your advantage when finding business partners to diversify
Happily, US businesses no longer need to pay management consultants or other middlemen to manage this process for them. Information on how to find the right partners is increasingly available.
Platforms like Powerlinx are empowering small and mid-sized players to act like big business by forming strategic partnerships and collaborating with like-minded businesses.
As you seek to diversify, finding business partners for your business in the US and beyond has never been easier thanks to the reach and insights the Powerlinx platform offers your business.
And while the competition will be fierce and the profits hard won, the good news is that for businesses prepared to form the right strategic partnerships, the potential payoff is substantial.
By Andrew Stone