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2.2 The long term sustainability and profitability

 

The long term sustainability and profitability of many small to medium sized enterprises depends on their ability to carve out a distinctive competitive advantage in the marketplace that will help them maintain a strong competitive position. Smart businesses realise that there are certain areas where embarking on a joint collaborative initiative with ‘like minded’ enterprises makes strategic sense. Marketing is one such area where SMEs can realise significant synergistic benefits by engaging in a joint marketing or promotional initiative. Marketing collaborations offer a wide range of flexible partnership options depending on the preferred level of engagement and the degree of commitment involved by partner members.

Some examples include:

  • Cross Marketing Collaboration
  • Each partner agrees to refer clients to the other through a cross sell initiative involving low hanging fruit such as creating a hyperlink on each partner’s website, or using WOM (Word of Mouth) to refer prospective business

  • Development of a Marketing Coop
  • This type of collaborative relationship can exist between partners who share a common target market through the provision of complementary products or services. I.e. the tourism industry in Ireland is populated with many local tourism providers who come together in order to market a particular location as a fun tourism destination. This would involve hospitality service providers like hotels, B&Bs, guesthouses, & self catering owners working closely with providers of activity based interests (horse riding, water sports, biking, hiking, historical places of interest, fishing, quad biking etc) to create a compelling holiday destination tourism value proposition for a specific area. This type of arrangement typically involves a bigger level of commitment and a longer term arrangement.

  • Joint Venture
  • This type of engagement exemplifies the maximum level of partner commitment where 2 or more SMEs come together and develop a new entity. This new entity is a separate legal company involving ownership of its partners. This ownership is not always shared evenly but the new company has its own branding, naming convention independent financial statements. This type of synergistic marketing arrangement is permanent and is much more difficult to dissolve. (For more information, see Module 4: Joint Ventures.)

    For case study examples of joint marketing collaboration, please read the cases:

  • Galway and Antrim
  • Microtrade
  • Also, for audiovisual advice, look at this video interview:

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