Growing: Co-opetition

The Strategic (and Smart) Business of Collaboration

Networking_WomenThere’s nothing like a swift economic crash to force business owners to immediately go into crisis-management mode. All businesses have scaled back spending, increased business development efforts and have continues of boot strapping to ride out the storm. From times like these come the adage, “never waste a crisis,” and nothing could be truer. A year ago the business environment was overflowing with opportunity. Now most businesses have experienced decreased profits, increased pressure from delayed payments, reduced or eliminated credit, loss of customers and overall contracting. However, in light of such misfortune, a greater opportunity exists. This requires a shift in thought process. Co-opetition is a counter-intuitive method of practicing business. It happens when you, recognize another business with a similar value proposition. It requires reaching out to another business with a historical competitive advantage and working together to gain market share as partners. Inherently, the practice of co-opetition makes us uncomfortable because essentially we feel we’re joining forces with the enemy. But in an environment where opportunity is lean, it is best to embrace the mentality that it is better to share 50 percent of something than to have 100 percent of nothing. I highly encourage business owners to consider their competition as potential collaborators. For example, one area of business opportunity which has been minimally impacted, and is receiving direct support through stimulus dollars is government contracts. For anyone who has competed in the contracting world, you know that it is a highly competitive arena full of “big dogs” who may engage small and minority enterprises to subcontract with them. It is difficult to gain an advantage against the larger corporations. The easier path is to sub-contract with a large primary contractor. There are numerous opportunities in the small to mid-value range that may be less appealing to larger contractors. Many of these contracts are up for grabs. As a small business, it would be beneficial for you to cooperate with another firm that, when combined with yours, makes you a medium-sized dog. This method isn’t only effective in the procurement arena. When seeing shrinkage in your customer base, it is obviously time to ask yourself, “What can I do differently to attract a more diverse client base?” Sometimes co-opetition does not involve your competition, but rather a company that has a relevant demographic similar to your own. For example, your baby-clothing store could do well to partner and share space with a maternity store. This brings both of your markets to one location for at least five years of continued patronage. While this course of action may not seem ideal, you should at least consider it. Co-opetition could lead to an entirely new and profitable business model. And, it still beats the alternative—doing nothing at all. Jane Pak, Guest Blogger View more posts by SCORE’s Guest Bloggers
Jane Pak

Comments

Thanks for the comment

Thanks for the comment Michelle! Its counter intuitive for us as small businesses or start ups. We're the little guy and the little guy always gets the crumbs...but when a bunch of little guys get together - well, you get my drift. More pie for the bigger guy (or gal!) Its about gaining market share and sometimes you need to collaborate in order to compete. If you don't - the big dogs - they'll eat your lunch.

Hope you have a success story to share with SCORE soon!!

Agreed!! Sometimes we have

Agreed!! Sometimes we have to remember that there's feasting in the sharing...I hope you have a success story you can share with SCORE soon!

Thanks Mizanur - glad you

Thanks Mizanur - glad you enjoyed it!

Thanks for the great article!

Thanks for the great article! I could get used to co-opetition! I would have never of thought to partner with a competitor even though someone in a similar industry would work as well. I also love the fact that it would unite professionals to a similar goal. Thanks!

Amen to that Joanna! The

Amen to that Joanna! The power of collaboration is amazing, I'm always thrilled to see business owners see the greater value in a collective effort - increased value propositions are good for the goose and the gander. Thanks for the comment!

Thank you for your

Thank you for your encouragement. I'm willing to take the risk to bring my concept to the public arena through the Cosmetology Industry.

Yes! What a great article.

Yes! What a great article. Not only does Co-opetition (or as I call it: supportive collaboration) help your business, it also helps the world by bringing together two professionals or organizations in a powerful way to create a powerful product together.

Imagine how different things might be if we all believed that by working together, we'd create MORE business for ourselves!

Thank you for your great

Thank you for your great information about business.

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