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Co-partnering is the establishment of liasons with a different segment of the industry from what you produce. It builds on the strengths of both organizational sections. From the small entrepreneurial or small food business, co-partnering of major food companies has served to enhance the stranglehold that major companies have on segments of the food companies. However, it is possible liasons could serve to leverage their product into the market place. A recent survey (Anonymous, 1993October) has found that 20% of the respondents on their Executive Advisory Panel found that co-partnering was advantageous. The survey obtained the following data for partnering. 71 % said that product development was the most important reason for the partnership they built. Productivity came in a second with 42% of the respondents attributing that to partnerships. Interestingly, only 14% indicated it was to squeeze-out a competitor.
A reason for co-partnering is the changing nature of the food industry itself. As food processors restructure and downsize, becoming focused around a common commodity or strategy, it means that one company does not do it all. Companies can co-partner to have a number of competencies which allow them access to new suppliers, technologies and market places (Morris (1996)). Much of the partnering occurs with material suppliers. Simplot indicates "partnering" occurs mainly with material suppliers and "joint venture" means joining with another company to form a new company, with shared ownership.
Partnering is important to product development within an organization with several divisions. Dave Hettinga (Anonymous, 1995, September), Land O'Lakes Inc., has indicated that copartnering is important as "For R&D, it's important to partner with your manufacturing, sales and other forces." Thus, one must not just think of it as between totally separate industries. He turns this around by indicating that it is important to have a strategy for product development and the strategy should drive product development, not the corporate structure.
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The advantages of copartnering is seen to the right. Such an alliance may continue to grow and develop.
The availability of partnering and joint ventures has indicated to be possible if there is congruency with the following criteria (Morris, 1996). However, in any case there are five key factors for partnerships and joint ventures.
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| CONSIDERATIONS OF CO-PARTNERING Trust Quality (zero Defects) Certification Maximize customer service Innovation Productivity improvement Technical support Competitive advantage Total cost vs. unit cost Volume incentives Electronic Data Interchange Open communication Environmental responsibility Financial Stability |
