Phones4U and the key role of partnerships

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In the wake of the sad news about the unexpected downfall of Phones 4U which broke this week, it’s worth examining why and how responsible businesses can allow a profitable retailer to fail.

Over 500 of the retailer’s stores simply didn’t open on Monday, putting nearly 6,000 jobs at risk, and creating yet more holes in the high street. The news follows the sudden decision of major mobile phone operators to withdraw their products from its stores next year.

It’s a sad state of affairs, and highly unexpected given that Phones4U is a profit making company. From a business perspective, it’s not how business should behave.

Partnerships are vital to good business, offering the ability to pool resources, leverage creativity across companies, and boost the potential to thrive and make money.

There’s no question that they can sometimes be accompanied by calculated risk, but partnerships have the ability to change and evolve the market place and be a force for good, creating jobs, driving creativity and creating new products and services for consumers.

While Phones4U served all mobile carriers well when they needed them, and don’t forget this is a company which generated over £1bn in sales just last year, every brand/business relationship is a partnership of sorts, and partnerships are at risk of being squeezed by evolving business needs.

When one side of a partnership decides to take their business in a new direction, the creativity and enthusiasm at the core of the relationship is inevitably corrupted and broken up.

Naturally, as part of keeping partnerships fresh and forward-looking, procurement teams have to keep demonstrating the cost-efficiencies of the affiliation. However, a black and white focus purely on costs will stifle the potential for more creative ways the companies can work together.

The strongest partnerships aren’t consigned to the boardroom and procurement teams, they’re cultural partnerships too. The third party involvement of any brand has the ability to resonate with all aspects of a business. The involvement of brands can be used as an extension and facilitator of sales and marketing strategies, and enables the business to win new customers.

Ultimately, the term “partnership” is a convenient term used by both sides of any negotiation. This sad news from Phones4U demonstrates that in some instances it isn’t the right word at all.

Many of the news reports have highlighted the incredibly short notice Phones4U was given by its suppliers – not entirely the behaviour of “partners”. Of course, this is business. Both parties share a commercial agreement and must do everything in their power to protect their business from unforeseen circumstances, including a breakdown in any partnership if a brand behaves badly in order to benefit themselves.

That doesn’t stop it being a poor example for business across every industry.


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