Why forming alliances is so important for your business

In this article, Simon Joyce, managing director, Anchor Vans explains how making alliances between competitors can help your business.

We create alliances all the time in business. The relationship with our customers forms the very groundwork for our business. The same is true for our suppliers. Without clients and suppliers, there would be no business. We work on these relationships all the time, in an effort to build strong, long and fruitful alliances.

From continued custom to complimentary word of mouth and preferential service, there is no question that the benefits of good client and supplier relationships are far-reaching. These are everyday alliances, however, establishing more formal alliances with other organisations or bodies and being part of connected associations can also be very useful in growing your business.


An alliance refers to a formal agreement made between two or more organisations in order to achieve a set of mutual benefits, in pursuit of a win-win situation for both parties.

Companies in the same industry might team up to take a larger market share, or a supplier might cut an exclusive deal with a retailer or provider. All types of resource may be shared in a partnership, from knowledge and expertise to products and sales channels.

Partnership alliances can be extended to mergers and acquisitions, where two companies combine their services or a larger parent corporation takes over a smaller company.

Bringing a supplier or smaller rival in-house, or using the combined weight of two businesses to establish a new company, usually involves significant investment and is therefore generally undertaken by larger businesses.

Affiliate marketing

Where alliances are formal links between trading partners, affiliate relationships are more casual. Like alliances, forming an affiliation with other groups or individuals aims to deliver mutual benefits to both partners. These affiliate partners can include sponsors, industry campaigners, trade networks and associations, and affiliate marketing.

There are numerous ways to employ affiliate marketing to grow your business. In its most basic form, it is a commissioned recommendation of a product or service by another company or individual. Whilst affiliate marketing has been around for years in various formats, the development of the internet has fuelled plenty of new opportunities for marketers. However, this is now a highly competitive arena due to the sheer volume.

Common forms of affiliate marketing today would include blogger recommendations and reviews, employing social media ‘influencers’ to share products, being featured on discount code websites, and appearing in online magazines. Sponsored web content, where articles are carefully written to include promotional material, is another common form of affiliate marketing often seen on the web.

Forging an alliance to grow your business

Traditional businesses used to require that rival companies avoided each other and kept their work a closely guarded secret, but the modern company is far more open to sharing ideas and resources with others in their industry. Forming alliances can be as simple as reaching out to your suppliers and to companies in your field and proposing a deal that could benefit each party well.

Creating a business merger or setting up a new company is a legal process and it will likely require a good amount of capital investment. However, agreeing on an exclusive supply deal on your products or securing an affiliate marketing contract is a relatively low-cost way to get started. We highly recommend you join relevant industry associations as well, as these can significantly grow your company’s influence.

Advantages of alliances

The biggest advantage of these mutually beneficial partnerships is access to resources. Two companies working together have the shared labour and materials, creative thinking and capital to achieve aims that might be outside the scope of a solo business. Whether companies are bound together in a formal agreement or simply form a close working bond that allows each to support the other, pooling resources is a fast way to grow any company.

Alliances can help companies take on a larger market share and create security for themselves in the process. A crowded marketplace can leave many companies fighting for a small share, while a large competitor takes the largest sector comfortably. If those smaller companies join an alliance and share their client base and resources, they can take on bigger rivals.

Alliances also give companies power when it comes to politics and regulations. Small companies often struggle to have their voices heard, but a network of affiliated businesses, suppliers and representatives can put a lot more pressure on lawmakers. If restrictions by regulators are strangling your company, joining a trade campaign group or recruiting other businesses to your cause can help you get your message heard.

Disadvantages of alliances

The downsides to alliances and affiliations are slight, but they must be considered. Cost is the biggest barrier for many businesses looking to create deeper working partnerships. Mergers and acquisitions are expensive, and the administrative cost of partnerships can be prohibitive for smaller businesses. However, the tradeoff is that increased exposure to your desired market through alliances and associations should increase business, and eventually offset incurred costs.

Benefits of Association Membership

The most important alliance to create for your business is, arguably, an association membership. Associations are official bodies established to represent a trade or industry, often acting as an advocate for that industry and also as a regulator. Though there is usually an annual cost to join, being part of a relevant association is an important step for companies looking to cement their place within their industry.

The key function of a professional association is to act as the customer’s ‘stamp of approval’. To join an association, companies need to meet and adhere to the standards expected by that agency. Customers know that any business bearing the official logo of the association is sure to do a great job – and increased confidence from the customer translates to increased sales for your company.

Trade associations usually carry benefits for members, from discounts on industry related services to specialist advice and training programs. As a member, you could also count on the support of the association in the event of any problems linked to your company or industry, which could include legal representation, single-issue campaigning and lobbying, and even handling the media.

Start forming associations and affiliations today

Now that you understand how different forms of an alliance can benefit your business, it is time to start looking at forming your own partnerships and growing your network of business relationships. Start by signing up with a trade association today, and get access to a wider market filled with customers who know they can have confidence in your service.

Next, reach out online and find affiliate partnerships that can grow your influence. Find bloggers who might be willing to promote your products, share content linked to your business on social media, and contact companies who might agree to share links or create content on an exchange basis.

Finally, consider forming some solid working relationships with your suppliers, or investing in a company that could increase your own product offerings. Formal alliances should only be undertaken if your business is in a position to cover the costs of the project, and you should always seek legal or financial advice before making such a big decision.

If investment in another company is outside of your scope right now, concentrate on forming strong partnerships through network building and affiliate marketing deals.

Simon Joyce is managing director for Anchor Vans

Further reading on alliances

Owen Gough, SmallBusiness UK

Freddie Halvorson

Owen was a reporter for Bonhill Group plc writing across the Smallbusiness.co.uk and Growthbusiness.co.uk titles before moving on to be a Digital Technology reporter for the Express.co.uk.

Related Topics


Leave a comment