“Rather than focus on beating the competition, focus on creating a win for your customer.” – Geoffrey James
Working and running a business in a silo or in isolation is no longer possible or feasible. There is far too much competition and they have become smarter, more tech savvy and less risk averse. It makes sense then for companies to seek collaborative ventures, making competitors as allies. This is a smart move that is worth every resource spent on ensuring that these collaborations remain strong and long lasting. Companies may have hitherto been ignorant of or purposefully steered clear of this option and the thought of using competitors as allies. There is no denying that this could have some potential risks, but then there is risk in running a business even alone. There is a well-known quote “there is strength in numbers” and this holds true for business and sensible partnerships too. As long as the idea of having competitors as allies is beneficial for all involved, this is an idea worth considering. Mutually profitable partnerships not only enhances the reputation and clout of a company, such affiliations bring together the customers of the ‘partnership companies’, adding more profitability.
There was a time when competitors were viewed as foes and people to be avoided and even the thought of having competitors as allies did not seem to exist. Succeeding in the volatile market environment is easiest done by focusing on maximizing support and increasing sales numbers. It is in the best interest of businesses to not have to worry about ‘annihilating the foe’ – read competition – as this is sordid waste of valuable and highly limited resources. The fact is that competitors as allies can prove to be an extremely invaluable support and the cutting edge that every company needs. Alliances and collaborations in business are a great way to grow one’s business and profitability, so it is worth investing time in understanding and making allies of businesses that already understand the market and have in their fold a formidable customer base.
Has your company formed any such alliances? Have you thought of combining the efforts and strengths of your company and that of competition? So what can be done to ensure that you can use competitors as allies and reduce the number of foes you have in the marketplace?
– Any new idea / venture should begin with making a SWOT analysis – strengths, weaknesses, opportunities and threats. For a partnership to be successful, it is imperative that all the parties concerned must first know what they possess and what can prove beneficial from the other. A proper identifications and analysis of goals – short term and long term – is necessary too. Your company could lack the bandwidth to acquire more business and or technology and therefore a competitor who may have these assets could prove significantly beneficial for your company. At the same time, your company should highlight its own niche and assets which the other ‘party’ would be lacking – this would make it easier to have competitors as allies. The fact is that everyone has the common goals of becoming more successful and increasing their profit margins. When companies head towards collaboration each one should be getting substantial benefits from the others in order for the partnership to be successful and long term.
– Post understanding what each potential ‘partner’ can bring to the new venture, it would still be wise to make some rounds of checks and verifications – speak with trustworthy stakeholders and customers. They would be able to provide invaluable insights and information that would be different to what you would know about interactions and business dealings with the potential collaborators. Taking risks does not imply negating the safety aspects and hence it would be wise to collect as much data as possible before entering into a partnership, especially when there would be more than one company to be involved in the partnership.
– Smaller companies tend to lose out the most and market share is grabbed by big companies. It would be a wise move to make competitors as allies, from competitors that are nationwide. These other small companies would also benefit – there would be no danger of encroachment, would be better network across the nation and also a larger and more impressive presence that would draw the attention of potential customers.
– We are not implying that despite gaining every detail and information there would not be any shadow of doubt or apprehension. The only way is to go ahead – present the ‘collaborative case’ to the potential partners. Ensure that communication is clear, transparent and concise and your business proposal is detailed and without ambiguity. Each potential partner must be able to get a positive answer to the age old ‘what’s in it for me?’ question. Every aspect of business to be done through the new collaboration must be clearly established – roles and responsibilities, dividing of revenue and profit, extent of customer database access, the kind of support that would be needed and provided and other such details that would keep the business running smoothly and for a long time.
– Being open-minded to accept rules and guidelines suggested by the new partners is also crucial to success. If each company tries to protect their own interests without thinking about the others, it would be tough for the partnership to last. Ensure that everything relating to the ‘new playing field’ is written down, concurred and signed off. There should be flexibility and room for contingencies in the plan too and each partner must have equal leeway and discretion. The idea is to ensure that all the effort and thought put to this new plan is successful – it would be a huge waste if the partnership dissolves too soon. However, the fact is also that the partnership may not be ever-lasting and hence the agreement must also have a clear defined exit plan covering aspects of obligations, risks and other such guidelines.
– Just like all aspects of a business, and maybe even more, the new partnership would require on-going and relentless effort to keep it healthy, open, transparent and with high integrity. The partners must consistently trust each other since any seeds of doubt or suspicion could ruin the partnership for everyone and may be even forever. Put checks and measures in place to manage conflicts and disruptions since this is bound to happen at some point. Pro-actively ensuring that these disagreements don’t dissolve the partnership is in everyone’s best interest.
– Competitors as allies, does not only extend to entering into partnerships. It is possible to be beneficial to each other even without such partnerships. For example – providing to and receiving referrals from, your competitors, helping them with resources and expertise in events and promotions (this will provide visibility to your company as well), endorsing their efforts and other such collaborative measures. So rather than being worried about the ‘company next door’, you would be building a network / an extended team for your company to boost your company’s sales and reputation.
It is understandable that anyone entering into collaboration with ‘competition’ will be wary and would want to tread lightly. The fact is that the more one business can learn from another and build on its own strengths the better it is both from profitability and growth prospects. Working towards common goals while acknowledging the other’s strengths will help all those involved to stride forward on the path to success. Everyone involved must make sure that they are not trying to only gain benefits for themselves but also working collaboratively such that the partnership strengthens and remains beneficial for all long term.
It would not be impossible to make competitors as allies if stubborn mind-sets and self-defeating egos are kept in check. Build on the power of collaboration and become a force to reckon with in the marketplace.
