Growing Stronger Together

Large white-owned businesses are forming alliances in growing numbers through short-term ventures to strengthen their product offerings and increase their revenue base. A recent Coo-pers & Lybrand study on strategic alliances shows that in 1996 over 61% of the 458 firms surveyed participated in them, compared with 55% in 1993. According to the survey, companies use alliances for business expansion, joint marketing or promotion programs as well as for planning future investments. Almost three-quarters of high-tech growth firms engage in strategic alliances versus only half of non-high-tech companies. Over the past five years, firms engaging in alliances have experienced revenue growth 49% higher than other firms.

The implication for black-owned businesses is twofold. First, as large white-owned concerns seek additional alliances, it benefits black-owned businesses to form partnerships with larger concerns — white- or black- owned — to capitalize on their areas of expertise without investing hefty amounts of revenue. Second, perhaps black-owned firms should learn by example. Our 1997 BE Company of the Year, BET Holdings Inc. (see “The Branding of BET,” June 1997), has formed a variety of ongoing strategic alliances with companies like Encore Media to expand its programming and generate capital.

While many CEOs resist allying with other companies, fearing the loss of control over their businesses, they could be encouraged by the old adage: nothing ventured, nothing gained.

America’s fastest-growing companies are using 48% more strategic alliances now than in 1993

 

1993

1996

Presently have alliances

55%

61%

Planning alliances in next 12 months

8%

7%

No alliances

37%

32%

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