18 February 2020 | pacts insight | Views:

Strategic Business Partnerships: An Example from Origin

We’re better together.

Don’t you think? Planning a surprise party is better as a team - Nathan makes a mean chocolate fudge cake, Selma is a dab hand at decorations, Kate is a pro at coordinating the troops. Or bartering for the best per person deal outside a restaurant (we’re looking at you, Brick Lane) - the bigger your crowd, the better the price!

We think the same principle applies in business. Partnering with like-minded people means you can do everything from pool your resources, to sharing strategy and insights - it’s mutually beneficial.

An example from origin: San Isidro’s Grower Association

Around 40 years ago, eight farm owners in Huila, Colombia needed a new strategy to grow their respective businesses. Coffee growing comes with several challenges - from practical ones, like transporting the green means to market, to financial, like getting a fair price from the market.

By coming together - chipping in the equivalent of around £3 each - they created a partnership that let them, and the association, grow exponentially. Today they have 85 members!

The advantages of strategic partnerships

- Problem-solve

Some challenges your business will face are specific to the industry itself. Finding solutions with the help of a business partner can allow you to pool your knowledge, for a mutually beneficial outcome.

For the farmers of San Isidro, the blocker they bonded over was transporting their coffee from high-altitude farms, via off-road tracks, to centralised selling points. By joining together, they could make less trips and share vehicle costs.

- Share resources

It can make financial sense to partner with a similar business. Complementary companies can refer their customers to each other, saving on marketing costs, and others can share resources - whether specialised staff or physical assets - to accomplish common goals.

For the San Isidro Grower’s Association, partnering meant they could bulk-buy equipment like fertiliser and machinery parts - making it possible to negotiate better prices with their local suppliers. It meant savings all round, and the discounts only got bigger as the group did.

- Market exposure

“Co-marketing” means you can grow brand awareness for each partner, and means growth for one of you could mean you both profit. It also gives you access to a larger market, by engaging an audience you may not have reached before.

Brand awareness is a big thing for San Isidro Grower’s Association. What started as a partnership of convenience has turned into an international brand - with sales of each individual member’s coffee boosted by the association of quality with the group. They’re not messing around - they even have branded doormats!

Mitigating the disadvantages of partnerships

Although the benefits of strategic partnerships can be manifold, there are some pitfalls to avoid. Research shows that the biggest risks are a breakdown in communication, whether related to differing priorities or poor managing of the relationship. The solution: transparency, and social engagement.

That’s where the San Isidro Grower’s Association really gets it right. They might be business partners first, but the 85 members (especially the founding eight) are friends a very close second. Meeting at each other’s farms regularly to eat, drink, and socialise, they keep open lines of communication - and that means they always keep their shared goals at the heart.


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