Strategic Partnerships

Partnerships have always been an important strategy for businesses looking to grow in unfamiliar markets, attract new customer segments, or sell additional products and services. But they have also been tricky to work due to clashing corporate cultures and different business aims. Let’s look at some of those strategic partnerships that have happened lately and what are the business aims behind them.

The Japanese auto-maker Toyota and the San-Francisco based ride-sharing company Uber are entering into a strategic partnership. Toyota is backing up Uber with undisclosed sum. What are the main aims behind this partnership?

• Uber drivers can lease their vehicles from Toyota and cover their payments through earnings generated as Uber drivers. The lease conditions are flexible and according to the driver’s needs.
• Toyota aims to explore with Uber the in-car apps that support Uber drivers, but also has a further-reaching goal, to explore the self-driving technology opportunities which the auto-maker takes very seriously.

In this way the two companies get what they need from the partnership and as a bonus Uber becomes more competitive on the ride-sharing market and receives a solid investment. With the Toyota’s backup it will become more competitive in a market where its rivals have already been backed up by some strong auto-makers. Who are Uber’s rivals on the market?

Apple and the Chinese Didi Chuxing

Didi Chuxing already got its strong backup from Alibaba Group Holding Ltd and Tencent Holding Ltd. It now operates in 400 Chinese cities with 14 million registered drivers, offering services from taxis and private cars to social ride sharing and test driving. Apple investment in Didi aims to achieve a few strategic goals for the future of Apple in China:

• To learn more about certain consumer segments in the Chinese market
• To diversify its investments as the iPhone technology has reached its maturity
• To keep its presence in the Chinese market strong and display confidence despite the recent difficulties it experienced- such as closing down of their online book and film services in China

Investors are also interested whether Apple will enter the automotive market with developing its own self-driving car.

General Motors and Lyft

 In January, 2016 GM and Lyft teamed up in a joint venture to develop a driverless car. This put them on a level playing field with Uber which is developing its own autonomous technology. In the short term, GM and Lyft will work together on a series of national rental hubs where Lyft drivers can rent short-term vehicles, unlocking new ways for people to earn money without having to own a car. And in the long-run they will aim to develop a driverless car which will change the way people move around.

Volkswagen and Gett

Volkswagen Group invested $300 million in Gett, a Tel Aviv-based black car-hailing app which marked the desire of Volkswagen to diversify by entering the highly competitive ride- sharing market.  VW says it aims “to become one of the world’s leading mobility providers by 2025,” according to Matthias Müller, chair of the Board of Management of Volkswagen Aktiengesellschaft. The group aims to “provide integrated mobility solutions that spotlight our customers and their mobility needs”.

Thus competition in the ride-sharing market is increasing the the strategic partnerships between technology companies and auto-makers will surely result in new products and services in the future.