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Nexia Ebner Stolz

Alliances are more popular than acquisitions

The era of the lone wolf in the SME sector is over: 94 per cent of small and medium-sized companies in Germany have already gained experience with strategic alliances. 88 per cent are planning to engage in alliances in the future. These are two core findings from Ebner Stolz Management Consultants’ study, “Strategische Allianzen. Wirkungsvolles Instrument oder überschätzter Hype? Das sagt der Mittelstand” (“Strategic Alliances: Effective Instrument or Overrated Hype? What the SME Sector Has to Say”). The management consultants surveyed 500 corporate leaders as part of the study. The analysis includes the experiences seen in more than 300 alliances.

The figu­res show that, in the SME sec­tor, busi­ness coa­li­ti­ons are effec­ti­vely dep­loyed instru­ments to make com­pa­nies fit for the future. Today alli­an­ces hold even grea­ter rele­vance than mer­gers and acqui­si­ti­ons. In parti­cu­lar, the sig­ni­fi­cant advan­ta­ges of alli­an­ces include lower finan­cial com­mit­ments, risk sha­ring and are rela­ti­vely easy to dis­mantle.

Alliances are more popular than acquisitions © Thinkstock

Col­la­bo­ra­ti­ons often occur in core areas

The study also addres­ses the pre­con­cep­tion that alli­an­ces are only sui­ta­ble for the ent­re­p­re­neu­rial peri­phery. Quite the con­trary: The SME sec­tor’s col­la­bo­ra­tive prio­ri­ties lie in purcha­sing (19 per cent), rese­arch and deve­lop­ment (17 per cent), manu­fac­tu­ring (17 per cent) and dis­tri­bu­tion (15 per cent).

Yet alli­an­ces are not only popu­lar, they are usually crow­ned with suc­cess as well. 65 per cent of SMEs sur­veyed rated the alli­an­ces they had joi­ned hereto­fore posi­ti­vely and attest to the mea­su­ra­ble impact these alli­an­ces have had on cor­po­rate growth. Con­ver­sely, howe­ver, this means that one-third of SMEs did not achieve the objec­ti­ves and expec­ta­ti­ons they had set. The rea­sons for this often lie in their imp­le­men­ta­tion. Only a small por­tion (12 per cent) of these com­pa­nies fol­low cle­arly defi­ned pro­cess steps. Yet it is struc­tu­red, tho­rough imp­le­men­ta­tion that forms the basis for a suc­cess­ful alli­ance. This is espe­cially true with respect to the legal arran­ge­ments. A well draf­ted con­tract can be cru­cial to a suc­cess­ful alli­ance for­ma­tion for all par­ties invol­ved, and can pre­vent con­f­licts and ensure suc­cess in the long term.

Select part­ners care­fully

In any case, the study shows that an alli­ance is not a sure-fire suc­cess. Indeed, there are nume­rous hurd­les to over­come in terms of their imp­le­men­ta­tion. The grea­test obst­a­cle, howe­ver, is dif­fe­rent cor­po­rate cul­tu­res. In addi­tion, part­nerships often fail as a result of com­pe­ting claims to lea­dership, a lack of con­sen­sus in terms of objec­ti­ves and stra­tegy, and ina­de­quate com­mu­ni­ca­tion. These points demon­s­t­rate just how important the choice of part­ners is. Nevert­he­less, oppor­tuni­ties are often mis­sed. 37 per cent of res­pon­d­ents are loo­king for the right team player amongst their cur­rent busi­ness con­tacts. Howe­ver, they rarely turn to other exter­nal resour­ces, such as asso­cia­ti­ons, events, pri­vate net­works or con­sul­tant con­tacts. The pro­ba­bi­lity of fin­ding a com­pany per­fectly sui­ted to an alli­ance in terms of their exper­tise, stra­tegy, objec­ti­ves and cor­po­rate cul­ture is the­re­fore much lower.

Despite all of the dif­fi­cul­ties invol­ved in their imp­le­men­ta­tion, stra­te­gic alli­an­ces have taken hold amongst small and medium-sized enter­pri­ses. Nine out of ten study parti­ci­pants are plan­ning to join for­ces with other com­pa­nies in the future as well. A majo­rity of those will even go beyond alli­an­ces. In the coming years, part­ners from abroad will be under inc­rea­sing demand. For example, 29 per cent of SMEs hope to col­la­bo­rate with busi­nes­ses in ano­ther EU coun­try; nearly the same per­cen­tage is also loo­king for a part­ner out­side of the EU.

All of the study’s fin­dings are available in the spe­cial edi­tion of the custo­mer maga­zine FORE­CAST.


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