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Strategy - The power of two


Published: 09 Mar 2015 Updated: 07 Apr 2022 Update History

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Working with other companies can deliver surprising benefits, as Nick Huber explains.

As the UK’s economic recovery continues to gather pace, corporate profits have also showed signs of improvement. Plans for new products and overseas expansion are once again being considered and boosted by companies.

It’s no surprise then that the global market for mergers and acquisitions flourished in 2014, getting back to the heady days before the 2008 financial crisis, according to some measures.

M&A isn’t the only way to grow. Business alliances, such as distribution deals, joint ventures or even with customers and governments, can provide all the benefits of M&A but without the long-term upheaval and commitment.

About 35% of global corporate revenue comes directly from some form of ‘non-operated business’, whether it is a partnership, alliance or joint venture, according to KPMG research published in 2012.

Alliances can take various forms, and typically last between two and five years. Structures, legal forms and aims differ, but the reasons for entering into an alliance are fairly simple. Two or more companies could have more to gain by collaborating – or by competing.

This is an extract from the Finance & Management Magazine, Issue 230, March 2015.

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  • Update History
    09 Mar 2015 (12: 00 AM GMT)
    First published
    07 Apr 2022 (12: 00 AM BST)
    Page updated with Latest research, adding related articles on strategy. These resources provide insights, case studies and perspectives on this topic. Please note that the original article from 2015 has not undergone any review or updates.

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