As this recent HBR post on how to make your competition work for you, even if you are afraid that your allies will steal your business, in today’s economy, a creative collaboration with your biggest competitor may be the best opportunity for revenue and survival.
They key to survival is coopetition — finding a way to partner with your competitor in such a way that both parties can substantially benefit from their shared resources without stealing customers or damaging credibility. While easier said than done, there are advantages.
- Best of Both Creates New Markets
If your strengths differ from your competitor’s strengths in a complementary way, a strategic combination of your solutions can win in a new segment of the market which neither of you could enter.
- Economies of Scale
If companies work togehter on business segments where they can minimize costs but not jeopardize unique attributes, they can share costs and economies of scale.
- Opportunities for Upsell
If a customer would benefit by having another product that you sell, or that your competitor sells, there will be an opportunity to upsell the customer at a later time.
- Integration for Critical Mass
If your competitor has a product your customer base also wants, it can help you get critical mass a lot faster.
If your competitor isn’t directly competing with your market, then you can refer business to each other without losing customers.
- Potential Investor
Once credibility and value has been established, a strategic partnership can extend to a financial relationship. They could have the finances you need to launch more NPD. Or a merger could allow for economies of scale that will free up even more money for NPD and marketing.
And once both companies are working in sync, there will be the following benefit:
- Supply Chain Streamlining
You can partner on procurement, logistics, and NPD. And, if you’re lucky, you can conquer your space like Apple conquered theirs through a best-in-class supply chain.