Why your best friend can be your competition
Do you see your competitor as the enemy, like most small businesses. Do you see them as the biggest threat to your business, someone to be fended off at all times.
Have you ever been limited in taking advantage of an opportunity because you didn't have sufficient capacity to meet the requirements called for? You may have all the required skills but can't meet the volumes required.
Or what if you can only meet some of the requirement, but not all because the opportunity calls for a range of skills, products or services beyond the capability of your business.
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.
The dilemma arises because the businesses most likely to have the required capacity or additional capability may well be your competitors. And most small businesses are extremely distrustful of their competitors.
Collaborating is one way to take advantage of an opportunity presently out of reach of individual businesses operating in their own right. Benefits include:
Adding to each others knowledge
Developing closer working relationships with suppliers
Doing research, marketing and development together
The opportunity to meet customer demand for products/services may be improved
Strengthening negotiating and purchasing
Acquire new experience and expertise
Partnering or collaborating with your competition I call co-opetition.
So what is the basis of co-opetition?
Co-opetition may be built in a variety of ways. It can be in the form of:
formalising a joint venture for a specific opportunity or project;
an on-going formal relationship looking for a variety of opportunities, where a new business is formed to provide the vehicle for the co-operation;
one business agrees to be the lead vehicle for co-operation in an on-going formal relationship looking for a variety of opportunities;
a continuing informal relationship seeking various opportunities;
Where three or more businesses become involved the partnership can be regarded as a business network.
Five characteristics must be met for successful co-opetition:
Each business needs to believe they will benefit if they are to be motivated to join the network or partnership;
Members of the partnership need to have a good relationship with each other and develop a commitment to each other and the business project;
Every member must have something to offer;
Participants should have 'domain overlap' between them.
The business climate needs to be right.
And how to head off 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:
Partnership members moving into competition with one another when there is a partnership opportunity;
The partnership deviates from its core business;
A motivated, self[starting champion is not in the group
Business opportunities are not opened up by members to the partnership
Absence of dedication to a group effort
One member operates entrepeneurially without regard to the interests of the others.
To succeed partners need to do the exact opposite of these factors.
If you give it a try by committed co-opetition with your competitors you will reap rich returns.
It is worth consideration.
Do you see your competitor as the enemy, like most small businesses. Do you see them as the biggest threat to your business, someone to be fended off at all times.
Have you ever been limited in taking advantage of an opportunity because you didn't have sufficient capacity to meet the requirements called for? You may have all the required skills but can't meet the volumes required.
Or what if you can only meet some of the requirement, but not all because the opportunity calls for a range of skills, products or services beyond the capability of your business.
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.
The dilemma arises because the businesses most likely to have the required capacity or additional capability may well be your competitors. And most small businesses are extremely distrustful of their competitors.
Collaborating is one way to take advantage of an opportunity presently out of reach of individual businesses operating in their own right. Benefits include:
Adding to each others knowledge
Developing closer working relationships with suppliers
Doing research, marketing and development together
The opportunity to meet customer demand for products/services may be improved
Strengthening negotiating and purchasing
Acquire new experience and expertise
Partnering or collaborating with your competition I call co-opetition.
So what is the basis of co-opetition?
Co-opetition may be built in a variety of ways. It can be in the form of:
formalising a joint venture for a specific opportunity or project;
an on-going formal relationship looking for a variety of opportunities, where a new business is formed to provide the vehicle for the co-operation;
one business agrees to be the lead vehicle for co-operation in an on-going formal relationship looking for a variety of opportunities;
a continuing informal relationship seeking various opportunities;
Where three or more businesses become involved the partnership can be regarded as a business network.
Five characteristics must be met for successful co-opetition:
Each business needs to believe they will benefit if they are to be motivated to join the network or partnership;
Members of the partnership need to have a good relationship with each other and develop a commitment to each other and the business project;
Every member must have something to offer;
Participants should have 'domain overlap' between them.
The business climate needs to be right.
And how to head off 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:
Partnership members moving into competition with one another when there is a partnership opportunity;
The partnership deviates from its core business;
A motivated, self[starting champion is not in the group
Business opportunities are not opened up by members to the partnership
Absence of dedication to a group effort
One member operates entrepeneurially without regard to the interests of the others.
To succeed partners need to do the exact opposite of these factors.
If you give it a try by committed co-opetition with your competitors you will reap rich returns.
It is worth consideration.
About the Author:
Adam Gordon is recognised as an experienced mentor to small business owners, helping them lift their profitability and creating more free time, by finding and sealing leaking profits in their business. Visit the Profit Leak Detective now and grab your free copy of 7 Clues to a Profit Leak.. Free reprint available from: Co-opetition - How to Win By Working With the Enemy.
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