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Strategic alignment in facilities

The strategic alignment plays a decisive role in the sustainability of the facilities, given that all facilities perform their duties in various ways, but there are many facilities struggling to survive, but they eventually fail, and in return there are many facilities that succeed easily and may perform less effort and time than Other, what is the reason for this?

The main difference is the presence or absence of strategic alignment, while facilities that are best aligned are the best performers internally, facilities that do not follow the policy of alignment actually falter because they fail to make the best internal forward-looking decisions and change side by side to face the world External that may increase with penalties.

In this article, we will explain the concept and recipes of strategic alignment, its importance, how to achieve it with impressive results, as well as its framework and benefits, and what are the consequences of not practicing it or the so-called strategic imbalance.

What is the strategic alignment?

Strategic alignment is the arrangement of the various internal and external elements of the facility, from its business strategy to its organizational structure, in order to support its goals and goals in the long term better.  

This requires all stakeholders, internal and external, to be similar and commit to achieving one goal, which is the vision of the facility.

What are its Characteristics: 

  • Clearly identifiable, dynamic process. 
  • Consistent with external threats and opportunities. 
  • Conforms with the organization’s internal processes and structures.
  • Changing from time to time.

At upper levels there are three basic proposals for the success of the strategy: value display, profit offer, and display of people.

In order for any successful  strategy, the facility must develop an offer that attracts buyers; It must create a business model that enables the facility to make money from its offers; People who work for the facility or with it must motivate the strategy.

While the content of a good strategy depends on a convincing value of buyers with a strong profit offer for the institution, the implementation of the sustainable strategy depends largely on a motivational proposal for individuals. Stimulating people requires more than overcoming organizational obstacles and gaining people’s confidence through a fair process, as it depends on consecrate and fair incentives. In this sense, the three strategy proposals provide an organizational framework to ensure that the facility takes a comprehensive approach to the formulation and implementation of the strategy.

The benefits of strategic alignment

Creating a strategic alignment to your facility can give various advantages, including:

  1. Access to new markets: Cooperation with another facility may allow you to access new markets and many types of customers who cannot reach them alone.
  2. Resources share: Resources shared with your partner can help you save money and increase efficiency, as the participation of technology, equipment and knowledge can be an example.
  3. Reduce Risk: You can reduce your exposure to potential losses and failures by sharing risks with your partner.
  4.  Synergy: By pooling resources and expertise, working with a partner can create synergy and increase the value of both companies.
  5. Growth opportunities: Strategic agreements can help both facilities to grow by combining strengths and expanding new markets or production lines.

For facilities that aim to increase their spread, reduce expenditures, reduce risk and create synergy with a partner, it can be a strategic alignment as a strong tool.

 Companies can reach new markets, exchange resources and unleash growth prospects that could not be achieved alone by collecting their resources and experiences. However, it is very important to conduct an accurate analysis of the risks involved and build confidence between the partners in order to ensure a good alignment. Strategic alliances may be a great advantage for any organization that wants to maintain its competitiveness and development with the appropriate approach and mentality.

What are the types of strategic alignment?

There are three types of strategic alliances: joint project, strategic alliance of stocks, and non -stock strategic alliance.

  1. joint project: A joint project is created when the mother establishments establish a new sub -company. For example, the company and the facility with (mother establishments) can create a joint venture by establishing the facility C (a subsidiary). In addition, if both the facility (A) and the facility (B ) possess 50 % of the sub-facility, it is defined as a 50-50 joint venture. If the (A) facility has 70 % and the facility (B) has 30 %, the joint venture is classified as a project owned by the majority.
  2. Strategic Equity Alliance:  A strategic equity alliance is created when one facility purchases a certain percentage of the equity in the other facility. If facility (A) purchases 40% of the equity in facility (B), a strategic equity alliance will be formed.
  3. A non-equity strategic alliance:  A non-equity strategic alliance is created when two or more facilities sign a contractual relationship to pool their resources and capabilities together.

How to achieve alignment in facilities

  • Step 1: Determine your business strategy and goals

Before you start looking for potential partners, you must first define your business strategy and goals. What are your business goals, and how can the strategic partnership help you achieve it? Do you want to enter new markets, create new goods, or reduce costs? Once you define your business strategy and goals, you can start exploring potential partners who can help you achieve it.

  • Step 2: Determine potential partners

When searching for suitable partners, check the similar values, cultures and work objectives. Look for facilities that can help you achieve your goals by completing your skills and weaknesses. Consider the facilities that work in related industries or have efficiency in the areas you lack.

  • Step 3: Negotiation on the conditions of partnership

Negotiating with partnership conditions is necessary once a possible partner is found and evaluated advantages and risks, including determining the scope of partnership, tasks and responsibilities of each facility, intellectual property ownership, and resource and expenses. To reduce misunderstanding and problems at a later time, it is very important to have clear and accurate agreements in place.

  • Step 4: Increased confidence through the partnership series

Trust is essential to the success of any strategic cooperation. Trust must be built and maintained between all parties involved, from the original negotiation stage to the ongoing management of the relationship.

The creation of clear communication channels among partners is an effective strategy for confidence. Regular meetings, progress updates, and comments sessions can help everyone on the same page and work to achieve the same goals. This open communication can also help solve any difficulties or fears that may arise, which prevents it from increasing and possibly harmful to partnership.

Transparency is another decisive aspect of confidence. From the beginning, all parties should be open and honest about their goals, capabilities and restrictions. This includes being open and honest about the risks and obstacles that may arise during cooperation. Partners may develop a basis for trust and understanding by being frank and honest, which may lead to a more effective and productive relationship.

Creating common beliefs and goals can also help develop confidence between partners by focusing on the same goal. Partners can cooperate to achieve a common vision, which can improve partnership and lead to greater results.

  • Step 5: Evaluation of benefits and risks

Access to new markets, resources, knowledge and technology are only a few advantages of forming a strategic alliance. However, there are risks included, such as power loss, conflict of interests, and the possibility of partnership failure. Before engaging in a partnership, it is very important to weigh the rewards and risks. Consider the cost of cooperation and the potential return on investment and the consensus of the establishments.

The consequences of strategic imbalance/ strategic alignment challenges

Although strategic alliances create value, there are many possible challenges that must be taken into account:

  1. The partners may offend what they offer to the table (they lie about the competencies they do not possess).
  2. Partners may fail to allocate resources and capabilities to other partners.
  3. One of the partners may adhere to the alliance while the other partner does not commit to that.
  4. The partners may fail to use their supplementary resources effectively.

Strategic alignment is a great way to stimulate growth and increase profits in a sustainable way, while mutual benefits are huge. It is important to do the basics first. You have to give yourself enough time to find the right ally, put clear expectations for both parties and put a strong goal and management plan.

Finally, look for the best software provider to measure progress and keep everyone on the right track. With the correct basis and fixed commitment on both sides, there is no reason that prevents strategic alignment from achieving tremendous success for both partners.

You can contact us to provide you with our advisory services for strategic alignment and other services.