Because companies can no longer possess all potentially nec-essary competencies themselves, strategic partnerships with customers,suppliers, and other businesses are becoming ever more essential. Manyfirms maintain multiple partnerships and rely on strategic partners to sus-tain a competitive position.

“Strategic marketing alliances are vitally important to the growth of anycompany, and Bluegreen clearly recognizes this fact,” says Joe Russoniel-lo, senior vice president of marketing at Bluegreen Corporation. “In orderto reach new customers and achieve maximum growth potential, as wellas overcome DNC [do-not-call] issues, a company has to be creative. Oneway to do this is to develop alliances outside of their own industry, lookingto partners whose customer base has an affinity for their product.”

The company has turned increasingly – and with great success – topartnerships outside the timeshare industry to overcome marketing chal-lenges. “For example, the relationship with Bass Pro Shops and Big CedarLodge represented a good strategic fit into our marketing mix. There wasa demographic synergy, and their products overlaid our own.” (See thecase study.)

For many companies, the process of identifying and implementing astrategic alliance can be daunting. Frequently, thebenefit potential of a relationship resulting from thealliance is overstated or unrealistic. Strategic part-nerships, moreover, need to be well constructed andmanaged – a process not always understood. Com-panies often lack the necessary strategic-thinkingand partnership-management capabilities.

Jeff Weiss, of Vantage Partners, a Cambridge,Massachusetts consulting firm that specializes inalliances, believes they require dedicated manage-ment. In a 2002 article in Harvard Business Update,Weiss presents evidence from a three-year study onbest practices in alliance management. His conclu-sion: “More and more alliances are being formed, yetthere is still a very high rate of failure.” His firm’sstudy found that of the 70 percent of alliances that failed, poor day-to-daymanagement was the cause in 64 percent of the cases.

Although there are very clear best practices for managing an alliance,most companies don’t take managing an alliance seriously, according tothe Vantage research.

Successful corporations continuously improve internal and external collab-oration. “To make these relationships work, you need to be systematic. Devel-op a strategic map and a well-thought-out communications plan – even plansabout how often you will meet or speak,” counsels Bluegreen’s Russoniello.

Success Factors For External CollaborationClearly defined alliance objectives – mutual goals, realistic expectations, andactive and intensive communication between the partners – are importantsuccess factors for the improvement of external collaboration and vital formanaging strategic partnerships once they are established.

Mutual goals. Strategic partnerships can work only if the partners’strategies and visions of the future are compatible, and if those visionsand strategies are constantly being reviewed and developed. The compa-nies must be compatible both in terms of strategic and operative man-agement, as well as problem-solving approach.

To this end, you must set out to understand your partner’s goals. Find-ing out what matters to your partner eliminates friction and inefficiencythat can be caused by trying to interpret their actions.

Build and manage trust. To make an alliance work, employees mustbe able to transcend their own company’s inter-ests and work for the broader good of the alliance.Russoniello points out that “the real game is togrow the whole pie, not to slice it up so your com-pany can get a bigger piece. You do that by trust-ing the people in your alliance, by realizing thattrust is built between people, not organizations.”

A key way to build trust is to make sure thatsome of the people negotiating the alliance willalso be managing it once its in place, so delega-tion and “handing off” from negotiators to rela-tionship managers should be kept to a minimumand closely managed.

Also, it is paramount that commitments madeduring the negotiation are kept, whether it’s a

meeting date or a responsibility to deliver marketing materials in anagreed upon way. Deviations from an agreed-upon routine and inconsis-tency could very well promote distrust.

Finally, build consensus step-by-step and do not jump to immediatesolutions as you address specific issues in the alliance.

VACATION INDUSTRY REVIEW J U LY - S E P T E M B E R 2 0 0 316

BY WILLIAM J. BROWN

The Power Of StrategicPartnerships

Strategic

partnerships

need to be well

constructed and

managed – a

process not always

understood.

Audit the relationship. In a 2002 issue of The McKinsey Quarterly, con-sultants James Bamford and David Ernst wrote that “despite the ubiquity ofalliances, few companies systematically track their performance … leadingmany alliances to be run by intuition and incomplete information.”

Measuring business and technical milestones may not be enough – this iswhy it’s helpful to designate a relationship manager who will be responsiblefor tending to the alliance itself. The business issues are certainly critical,but no more so than, for example, communication, conflict management,and organizational values. These are often the keys to alliance success.

Develop a protocol for joint decision-making. Joint decision-makingis the soul of every alliance. Stephen Bernhut, a Toronto-based editor whowrites about business and management, and Benjamin Gomes-Casseres, abusiness professor at Brandeis University, describe the key elements in jointdecision making:• Create a task force – and do so before the deal is finalized – consisting of at

least two executives from different operating areas and from each partner.

• List the 20 or so most significant decisions that need to be made, sortthem into categories, and rank them by importance.

• Identify the key stakeholders in the key decisions. Don’t overlook the“shadow” decision makers who can make or block a decision and encour-age their involvement.

• Develop a role that each decision maker should play in making a particu-lar decision: commit, negotiate, consult, notify, or delegate.

• Draw a decision path, a graphic representation of the individuals involvedin making necessary decisions. This can remove anxiety that could other-wise develop when people can’t see what’s ahead. ◆

William J. Brown is assistant vice president of e-commerce for IntervalInternational. He teaches graduate classes involving strategic use of theInternet at both the University of Miami and Florida Atlantic University. Hemay be contacted at William.Brown@intervalintl.com.

17W W W. R E S O R T D E V E L O P E R . C O M

Sound strategic and marketing planningresults in improved market and financialperformance. An excellent example ofsuch can be found in Bluegreen’sstrategic partnership with Bass Pro Shops,a retail chain catering to outdoorenthusiasts. Bluegreen is a leadingdeveloper and marketer of drive-tovacation ownership resorts and plannedresidential and golf communities, and isamong the top-five timeshare developersin terms of gross revenues and newownership sales.

In 2001, Bluegreen entered into anexclusive, 10-year agreement with BassPro Shops that represented the industry’sfirst national retail alliance andBluegreen’s entry into the growingmarket of wilderness vacations. Underthe agreement, Bluegreen has access tomore than 30 million potential customersof Bass Pro Shops and its affiliates, BassPro Outdoor World, Bass ProCatalogues, the Bass Pro Web site, andBig Cedar Lodge on Table Rock Lake,Missouri, where Bluegreen is the primaryvacation ownership developer – and maybe marketed in an environment that iscompetition-free.

In fiscal year 2002, Bluegreen openedstaffed sales outlets in nine of Bass Pro’s15 retail stores, permitting the company torealize further substantial value throughthe alignment of Bluegreen’s brand withthat of one of the nation’s most respectedretailers of outdoor leisure.

The effectiveness of such a strategicmarketing relationship cannot beoverstated. George F. Donovan,Bluegreen president and chief executiveofficer, credited his company’sarrangement with Bass Pro Shops ascontributing significantly to Bluegreen’sfiscal year 2003 first half results. “Salesat Big Cedar Wilderness Club were ...strong,” Donovan stated in a pressrelease announcing quarterly earnings,“… due in large part to an increase inprospective buyer tourism, originatingfrom our marketing agreement with BassPro Shops.” The February 2003 issue ofCrittenden’s Resort Real Estate attributedBluegreen’s in-store marketing to directlygenerating about 30 to 40 percent oftours to the resort.

These financial results were particularlynoteworthy as the second quarter offiscal year 2003 was Bluegreen’s sixth-consecutive quarter of profitability andthe seventh consecutive quarter in whichoverall results improved over thosereported in the same quarter of the priorfiscal year – all of which have occurredduring an unprecedented period ofchallenge for the lodging and travelindustries.

Joe Russoniello, senior vice presidentof marketing at Bluegreen Corporation,points to a bright future for the remainderof the initial term of the marketingagreement. “Bass Pro is continuallyopening new retail locations throughout

the country, allowing us to increase ourpresence with their growth,” he states.“That gives us additional promotionalopportunities and exceptional lead-generation abilities. And with tens ofmillions of customers each year, thatrepresents almost unlimited growthpotential for Bluegreen.”

Bluegreen’s trendsetting approaches tomarketing and sales have placed it at theforefront of the timeshare industry, andthe company has continued to seek outother major brands in the retail industrywith which Bluegreen can form strategicalliances for co-branding andcooperative opportunities.

Bluegreen also said it hassubsequently entered into a separatesimilar marketing agreement with BoyneCountry Sports, which sells ski, snowboard, and golf equipment at eightMichigan locations.

As Bluegreen enters new markets, aclear goal is to align its collaborativemarketing strategy with strong affinitypartners who themselves have long-standing consumer relationships.

“Strategic alliances like the one wehave with Bass Pro and Boyne can workonly if there are synergistic values andgoals, overlaying demographics, sharedprofitability, and a sensitivity to eachother’s brands and an investment inunderstanding the differences betweenthem,” advises Russoniello. “In this typeof situation, everyone has to win.”B

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