How do you identify and choose key business partners? By key partners we mean other companies that are so important to you that you could not give up their cooperation. Relationships with them are one of the building blocks of your business model.
Choose key business partners who share your goals
Key business partners are those companies that share a common goal with you. Suppliers that you could change at any time are not included.
In the topic “Product Plan” you may have already described what tasks you will take on in the production of your product or service yourself. Now it’s about who you’re putting the rest on.
Because your key partners are so important to you, you should choose key business partners carefully, and offer them something very special to keep them — and you — loyal. Think about how you can manage to become as indispensable to your partners as they are for you today.
The sanitary technology manufacturer Geberit has identified the installation companies that install its products with the customer as a key partner. It offers them free training, planning software and an extensive service, making their work easier. These key partners are almost even more vital for Geberit than the (final) customer benefit, because the purchase decision here rarely takes the actual customers, i.e. the builders and homeowners, but mostly the ones they commission Installation companies.
Why key business partners are so important
Trusting relationships with the selected competitor, service companies or partners are crucial to your company’s economic success. They are an important part of your business model that you should not leave to chance. Key partners can help you minimize uncertainties and risks and give you access to key resources that can be both material (e.g. raw materials or goods) and intangible (information, professionals, or customer segments).
Examples of key partners would be a large retail chain to add your product to their assortment, or suppliers that pre-finance larger deliveries. A certified supplier can also become a key partner if your business model is based on sustainability.
Not every company plays a real key role. But key partners have become more important overall in recent years. Technological progress, an increasingly interconnected world and modern start-up approaches are the main reasons for this. Many young companies have recognized the advantages of lean structures: those who do not do everything themselves, but rely on long-term relationships with other companies, remain more flexible and can react more quickly to changes in the market.
Whatever you want to start a business, without a functioning key partnerships, it will be hard to establish yourself in the long term. That’s why our template for your business model specifically includes a topic in which you can enter who your key partners are, what distinguishes them, and what you can contribute to the partnership.
Case study… Napster: This happens when you forget your partners
Do you remember the Music Exchange Napster? This platform, which was founded at the end of the 1990s, allowed millions of users to exchange music files. It was based on a revolutionary peer-to-peer approach: software automatically searched participants’ hard drives for music files and reported the results to a central server. With a suitable search query, two computers were connected directly to each other and one user could copy the desired file at the other.
Music fans all over the world were thrilled by the almost inexhaustible – and also free – offer. At times, the Napster community was the fastest growing community on the Internet. Within a short period of time, it reached more than 80 million people.
The customers were happy – but not the musicians and record labels whose works were exchanged on the platform. They had absolutely no idea that Napster made their music files accessible. On the contrary, they had to fear for their revenues.
It didn’t take long, and Napster was overwhelmed with complaints from the music industry. The result was the shutdown of the platform, three years after its foundation. Meanwhile, Napster is history.
Why did this success story end in such a fiasco? The answer is: because Napster had forgotten his key partners. If Napster management had succeeded in involving the music industry in its success, the platform would certainly still exist.
A little later, established large companies and start-ups gradually did things differently. They reconciled the needs of their customers and their key partners and within a few years turned the entire music industry upside down: customers could buy or stream entire albums or even individual favorite songs from a wide range of music. . The rightholders received part of the revenue.
Meanwhile, a number of streaming providers have settled on the market, where music fans can listen to any number of tracks for a monthly fee.
Napster has paved the way for this new form of distribution for the music industry, but is no longer part of it.