Why your competition can be your best friend
Are you like most small businesses? Do you see your competition as the enemy, the biggest threat to your business? Someone to be resisted and held at bay at all times.
Have you ever been in a situation where your lack of capacity to meet the requirements specified meant you couldn't take advantage of an opportunity? Despite having all the required skills you are not able to meet the volumes called for?
Or maybe an opportunity may call for a range of skills, products, or services beyond the capability of your business. You may be able to meet some of the requirement, but not all.
Both these situations can put you in a quandary. You have the choice of forfeiting the opportunity or acquiring additional capabilities or capacity. Formally or informally partnering or collaborating with other businesses is one solution.
While most small businesses are extremely distrustful of their competitors, the businesses most likely to have the required capacity or additional capability may well be your competitors. And that is the dilemma.
Partnering is taking advantage of an opportunity presently out of reach of individual businesses operating in their own right. Advantages include:
Learning from each other and sharing the knowledge
Building closer working relationships with suppliers
Undertaking joint research, marketing and development
The opportunity to meet customer demand for products/services may be improved
Build up negotiating and buying
Access to new expertise & experience
I call partnering or collaborating with your competition - co-opetition.
So what is the foundation of co-opetition?
Co-opetition can be developed in a number of ways. They can be in the form of:
formalising a joint venture for a specific opportunity or project;
forming a new business to provide the vehicle for co-operation in an on-going formal relationship looking for a variety of opportunities;
an on-going formal relationship looking for a variety of opportunities, where one business agrees to be the lead vehicle for the co-operation;
an on-going informal relationship looking for a variety of opportunities.
The partnership can be regarded as a business network where three or more businesses become involved.
Successful co-opetition has five characteristics which must be met:
Each business needs to believe they will benefit if they are to be motivated to join the network or partnership;
The partnership members should have a good relationship with each other and build a commitment to that relationship and the business project;
Each firm needs to have something to offer;
There needs to be 'domain overlap' between the firms.
The business climate should be suitable.
And how to avoid the problems?
The frankness and trust co-opetiton depends on takes a long time to build, and can be destroyed in a very short time. Trust is lost when:
When there is a partnership opportunity but partnership members move into competition with each other;
Deviation from the core business of the partnership;
There is no self-starting, motivated champion
Are you like most small businesses? Do you see your competition as the enemy, the biggest threat to your business? Someone to be resisted and held at bay at all times.
Have you ever been in a situation where your lack of capacity to meet the requirements specified meant you couldn't take advantage of an opportunity? Despite having all the required skills you are not able to meet the volumes called for?
Or maybe an opportunity may call for a range of skills, products, or services beyond the capability of your business. You may be able to meet some of the requirement, but not all.
Both these situations can put you in a quandary. You have the choice of forfeiting the opportunity or acquiring additional capabilities or capacity. Formally or informally partnering or collaborating with other businesses is one solution.
While most small businesses are extremely distrustful of their competitors, the businesses most likely to have the required capacity or additional capability may well be your competitors. And that is the dilemma.
Partnering is taking advantage of an opportunity presently out of reach of individual businesses operating in their own right. Advantages include:
Learning from each other and sharing the knowledge
Building closer working relationships with suppliers
Undertaking joint research, marketing and development
The opportunity to meet customer demand for products/services may be improved
Build up negotiating and buying
Access to new expertise & experience
I call partnering or collaborating with your competition - co-opetition.
So what is the foundation of co-opetition?
Co-opetition can be developed in a number of ways. They can be in the form of:
formalising a joint venture for a specific opportunity or project;
forming a new business to provide the vehicle for co-operation in an on-going formal relationship looking for a variety of opportunities;
an on-going formal relationship looking for a variety of opportunities, where one business agrees to be the lead vehicle for the co-operation;
an on-going informal relationship looking for a variety of opportunities.
The partnership can be regarded as a business network where three or more businesses become involved.
Successful co-opetition has five characteristics which must be met:
Each business needs to believe they will benefit if they are to be motivated to join the network or partnership;
The partnership members should have a good relationship with each other and build a commitment to that relationship and the business project;
Each firm needs to have something to offer;
There needs to be 'domain overlap' between the firms.
The business climate should be suitable.
And how to avoid the problems?
The frankness and trust co-opetiton depends on takes a long time to build, and can be destroyed in a very short time. Trust is lost when:
When there is a partnership opportunity but partnership members move into competition with each other;
Deviation from the core business of the partnership;
There is no self-starting, motivated champion
About the Author:
Adam Gordon is recognised as an experienced coach to small business owners, assisting them lift their profitability and creating more free time, by identifying and plugging leaking profits in their business. Visit the Profit Leak Detective now and get your free copy of 7 Clues to a Profit Leak.
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