One of the most important business trends in recent years is to form alliances or partnerships with major customers or suppliers.
1. With little ability to pass on price increases to customers, companies turn to suppliers for cost reductions.
2. The current wave of industry consolidations leads companies to seek cost reductions through leverage buyouts with major suppliers.
3. Because retaining customers is generally more cost effective than developing new ones, businesses seek partnership relationships to reduce customer attrition rates.
4. Because partnerships have produced significant returns for companies that have employed this strategy, many companies are following suit.