Leveraging Partnerships for Strategic Advantage
In my April 9th post on the investments required in building business and customer relationships in Japan, I framed the strategic dilemma for small firms and business units trying to gain a foothold in the Japanese market, especially with larger Japanese businesses. After discussing the market realities in Japan, I summarized:
Thus, a firm in this situation cannot be completely dissatisfied with short-term losses associated with such an investment of resources. It is a cost of doing business in such a market and requires a combination of patience, steady determination, and a commitment to relationship development. At the same time, for a business unit evaluated on profitability, such a situation eventually requires tough choices--drop the project all together or work your tail off to find new sources of cash flow elsewhere in order to subsidize already dedicated resources.
I didn't touch on ways to find new sources of cash flow, but recently a few online magazines have recently made notice of the announcement by Manhattan Associates and IBM to strengthen their commercial partnership--a move I would categorize as one strategic way of opening new sales channels and building a solid project pipeline.
On way towards discussing how such a partnership can work in our dilemma above, I want to briefly detail the Manhattan-IBM partnership via a couple articles. The first is from Logistics Management and titled, "New Manhattan Associates, IBM partnership aims to offer shippers more integrated platform."
First, in a description of the partnership:
Supply chain software vendor Manhattan Associates announced earlier today it has bolstered its partnership with IBM in an effort to implement and sell supply chain technology offerings that are built on IBM's open technologies for global shippers in the retail, consumer goods, manufacturing, and transportation sectors.
The companies said that this initiative will focus in on certain geographic markets, including Asia-Pacific, Europe, Latin America, Middle East, as well as its current interests in North America, where they share roughly 1,000 customers.
"This partnership is a great opportunity for us and makes a lot of sense with what are are doing with our supply chain solutions-and the innovation we are bringing to our customers-along with what IBM offers in terms of technology and R&D," said Jeff Cashman, Manhattan Associates senior vice president of business development.
Prior to today's announcement, the partnership between the two companies was described as a "go to market" relationship by Cashman over the last 15 years. It focused on re-selling hardware and the concept of working together in the future on global services, as well as possibly using IBM software.
Later in the article, I think it hits on where such a strategy will help deal with the above dilemma:
In terms of how today's news positions Manhattan in a highly competitive marketplace, Cashman said that IBM's global reach is a boon, along with its technology expertise in the industry.
The second article from Computer Business Review Online, titled "Manhattan Toasts New IBM Partnership," is more to the point:
Manhattan is hoping to tap into IBM's global sales and marketing channels and strong service capabilities to push its supply chain offerings to market.
Basically, this set-up allows Manhattan to reduce the risk in developing new sales channels and customers in a market like Japan where it requires more unrecoverable costs. At the same time, IBM is able to tap into Manhattan's expertise in supply chain execution technologies to deliver better solutions to its customers, both current and potential.
The Chinese IT firm I worked with in Beijing also utilized this strategy in a partnership with IBM. However, because IBM is so big, at the time it seemed certain parts of the business had poor visibility of what other business units were doing in China. The firm I was with, in just one week, outbid IBM for one project, joined a presentation and news conference with IBM on their partnership, and received a sales visit from two reps from a division of IBM. Thus, a company like Manhattan has to be sure they can manage this type of partnership dynamic and be able to interact consistently with the entire IBM organization.
For my former Chinese company, it was quite embarrassing for the IBM sales team to arrive in office and yet have no clue that IBM was a partner on the mainland.
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