The news about the Target/CVS partnership is especially exciting if you shop at Target and get your prescriptions at CVS.
What makes this partnership a good deal and what can smaller businesses learn about partnering?
- The health care business is exceedingly complex and requires a knowledgeable workforce to navigate complicated regulations.
- Pharmacies comprised less than 5% of Target’s sales and resulted in negative profitability on the balance sheet.
- Target is big, but its real estate footprint is not as wide as CVS (scale). Plus many CVS locations are open 24/7 giving them an edge in competition.
- Target had other priorities; chasing customers in a highly competitive grocery business requires relentless focus on customer satisfaction.
- Both Target and CVS believe they will benefit from each other’s customers.
Consider the advantages and risks of partnerships:
|Access to knowledge||Loss of autonomy|
|Access to resources||Drain on resources
(it always takes more money and longer than you think)
|Effectiveness – develop more products and services||Implementation challenges|
|Efficiency in operations||Negative reputation impact (when things don’t work out)|
|Stability and impact long term|
|Enhanced reputation and credibility|
Are you thinking about partnering? Consider:
- Would the partnership be mutually beneficial?
- Do my customers have unmet (or difficult to meet) needs?
- Do I have trust relationships with potential suppliers of my customers?
- Would I be willing to offer their product or service to my customers under my corporate umbrella?
- Does my company have products or services that are unprofitable and inefficient for us, but might be profitable when done by someone else?
- Do I have under-utilized resources (people, machines, patents, etc.) that someone else could utilize?
Opportunities abound for people who look for them.
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