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A business partner is a commercial entity with which another commercial entity has some form of
alliance An alliance is a relationship among people, groups, or states that have joined together for mutual benefit or to achieve some common purpose, whether or not explicit agreement has been worked out among them. Members of an alliance are called ...
. This relationship may be a
contract A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tr ...
ual, exclusive bond in which both entities commit not to ally with third parties. Alternatively, it may be a very loose arrangement designed largely to impress customers and competitors with the size of the network that the business partners belong to.


Partnership formation

A business partner or alliance can be crucial for businesses. However, businesses can not choose business partners, called business mating, in any way they want. In many instances, the potential partner might not be interested in forming a business relationship. It is important that both sides of the agreement complement each other and have some common ground, for example in management style, mindset, and technology. If, for example, management style would be to different between the firms, then a partnership could be problematic. Kask and Linton (2013) investigate under what conditions business mating (formation) takes place for startup firms seeking business partners.


Differentiation

The meaning of the term is quite different from that implied in
partnership A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, government ...
, and it is because of the potential for confusion between the two that widespread use of 'business partner' has been discouraged at times in the past. A business partner can be: # A supplier # A
customer In sales, commerce, and economics, a customer (sometimes known as a client, buyer, or purchaser) is the recipient of a good, service, product or an idea - obtained from a seller, vendor, or supplier via a financial transaction or exchang ...
# A channel intermediary (such as an
agent Agent may refer to: Espionage, investigation, and law *, spies or intelligence officers * Law of agency, laws involving a person authorized to act on behalf of another ** Agent of record, a person with a contractual agreement with an insuranc ...
or
reseller A reseller is a company or individual (merchant) that purchases goods or services with the intention of selling them rather than consuming or using them. This is usually done for profit (but can be done at a loss). One example can be found in the ...
), or # A vendor of complementary offerings (for example, one party sells the hardware, while the other sells the software) This is a wider definition than a
business alliance A business alliance is an agreement between businesses, usually motivated by cost reduction and improved service for the customer. Alliances are often bounded by a single agreement with equitable risk and opportunity share for all parties involved ...
.


Cohesion

One example of a business partnership is the "Agility Alliance" originated by Electronic Data Systems. Members of this IT-focused alliance include
Microsoft Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered at the Microsoft Redmond campus located in Redmond, Washi ...
,
Oracle Corporation Oracle Corporation is an American multinational computer technology corporation headquartered in Austin, Texas. In 2020, Oracle was the third-largest software company in the world by revenue and market capitalization. The company sells d ...
,
Sun Microsystems Sun Microsystems, Inc. (Sun for short) was an American technology company that sold computers, computer components, software, and information technology services and created the Java programming language, the Solaris operating system, ZFS, t ...
and
SAP Sap is a fluid transported in xylem cells (vessel elements or tracheids) or phloem sieve tube elements of a plant. These cells transport water and nutrients throughout the plant. Sap is distinct from latex, resin, or cell sap; it is a separ ...
. This highlights two problems with multi-party partnerships: * Two of the companies may be partners with a third member of the partnership, but highly aggressive towards each other. (Oracle and SAP compete against each other in the ERP market.) * One party may be partner to a second party when targeting one market, but competitive against that same company when targeting another market. (Microsoft may be happy to work with Sun when Sun is offering its servers, but far less happy when Sun is proposing OpenOffice.org, in contention with Microsoft Office.)


Business partner search

Business partner search or business matchmaking is the process/service of finding buyers/customers, distributors, licensees, and/or other business partners. This can be provided as a paid service by a commercial organization, or as a free service by the commercial section of a country's embassy/consulate or an association of businesses in a particular area. Customarily, commercial consideration of this service is a one time fee. The fee for this service depends on the business domain, the volume of business of both partners that will end up in a partnership relation as the end result of this service, etc.


Managing relationships with business partners

The collaborative relationships with business partners are oftentimes prone to certain inefficiencies, which are represented by misalignments of either incentives or efforts between the partners. Business actors thus employ various approaches to manage the business relationships and facilitate both cooperation and coordination. Two mostly used mechanisms are legal contracts and social norms (e.g., trust, prior relationships, or continuity of future collaboration).


References

{{Reflist


External links


IBM's Business Partner website

RediffMail Business Partner website

Google Apps for Work Premier Partner website




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