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Build, Buy or Partner?  How To Best Maintain and Develop Your Business Relationships?
Your customers rely on your expertise in a given service area, or for specific solutions. Someday they might need more than you currently provide. Plan to meet their needs before they seek another vendor with broader capabilities. Sometimes your customers require expertise that extends beyond your core capabilities. To respond, you have to choose the strategy that best supports your customers needs and your business objectives.
Buy Capabilities Externally
Purchasing capabilities from another company can help you expand your customer base and generate greater revenue from existing customers. However, finding the right supplier has its own time, human resources, and financial requirements. - Build Capabilities Internally Within Your Company
Like purchasing capabilities from another company, building your own capabilities can be costly. It requires researching new technologies, consulting experts, and hiring and training staff — all to compete with companies who have more experience and expertise in the same business solution. - Partner with Another Organization
Teaming up with another company whose solutions complement — but don't compete with — your own lets you tap into new business capabilities without the risks of buying or building the capabilities you seek. With this solution, you need a collaboration management system both you and your partners can mutually accept and agree to follow.
How Partnering Can Benefit Both You and Your Customers
Collaborating with another organization enables you to generate new leads and provide a greater range of solutions to your existing customers. Your customers benefit by eliminating the need to acquire solutions from additional vendors. They’ll save time and money, receive a better-integrated solution and grow stronger with your organization.
Today, all organizations need integrated solutions in many areas—for example, in their business processes, from the customer relationship to the supply chain. This means that great opportunities exist for partners to pool their skills and pair competencies to offer better-integrated solutions cost-effectively without having to carry the cost of the entire infrastructure or risk.
| | BUY Purchase complementary skills or products from a vendor and integrate | BUILD
Recruit new resources, expand skills, or open a new office or subsidiary | PARTNER Partner with other organizations to deliver full-service offerings | | Potential Advantages | 1) Grow business and add skills quickly 2) Strong local connection 3) Vendor competition for your business | 1) Easier to manage 2) More gradual approach 3) Integrated with existing business | 1) Low cost 2) Faster to market 3) Strong local connection 4) Shared risk | | Challenges | 1) Cash outlay
2) Learning curve
3) Integration process 4) Assume all risk | 1) Cash outlay 2) Slow process with limited scalability
3) Disruption of existing business 4) Assume all risk | 1) Finding the right partner
2) Less control of ownership 3) Organizational alignment | | Skills Required | In-house capabilities to stand alone | Organizational agility and competency to invent | Communication and collaboration |
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