Business competition can be cutthroat especially in this digital age. In fact, the greater focus in formulating business strategies is usually premised on looking at the competition. Naturally, entrepreneurs are bent on avoiding or thwarting their competition by all means possible. Have you ever stopped to think that there could be hidden prospects in collaborating with your competitors? Anyone’s first instincts would be to shun any possible collaboration with their competitors. What you probably do not realize is that collaboration between competitors is quite normal in the business world. In this article, I will delve into the dynamics of collaborating with your business competitors.
Ways In Which Business Competitors Can Collaborate
There are many ways in which business competitors can collaborate. They can get into joint ventures for various reasons. They can enter agreements where one or both of them outsource from each other. Research is a big part of running a business – competitors can join hands to conduct research together. Developing new services or goods or entering new markets can be the reason why competitors collaborate. All this sounds great and all but it is not always black and white. Collaborating with a competitor is akin to dining with the enemy. Thus you must tread carefully lest your competitor gets more out of the collaboration than you. In light of this let me discuss some important things you must know:
Some Things To Consider In Business Collaboration
Set Clear Boundaries
I am not sure how best I can emphasize this – be vigilant about boundaries. Your business and your competitor are two different entities with their own respective goals and aspirations. With that in mind, it is vital to assess the implications of your competitors’ business goals on your business’. As tempting or difficult it might seem, never ever compromise. Never lose sight of the fact that they are still your competitor. For all intents and purposes, collaboration is actually a variation of competition. So it is important to never let your guard down. If you are not careful your competitive edge or inside information can be stolen or compromised.
Do Not Look Too Far Or Too High
Who you collaborate with matters in the long run. It would be best to be the dominant partner in the collaboration. That way you will be operating from a position of strength. However, that might not always be the case but it is usually preferable to collaborate as the dominant partner. You should not be too hung up on being the dominant one though – there are times when collaborating with a dominant partner will be strategic for your business. So what do I mean by not looking too far or too high? When looking to collaborate with a business competitor, start with ones that you probably interact with already. It would be easier to start exploring collaboration because you already engage with each other. So, before you think of big and distant competitors consider the ones within your vicinity.
When Thinking About Competition Do Not Only Think About Direct Competition
Probably all this while you have been thinking about direct competition. Well, some of the best business competitors to collaborate with can be indirect ones. This is because your direct competition might not even be wary of indirect competitors. For instance, you do a business where you make and sell cakes. Typically you would consider other cake makers more or solely as your competition. However, you will be turning a blind eye to indirect competitors such as wedding planners, for instance. You might even outsmart your direct competitors by collaborating with indirect competitors.
How To Pick Who To Collaborate With
I am sure you know this basic principle which says you must always negotiate from a position of strength. This is something that also works when trying to make the decision of who to collaborate with. Look inwards first i.e. what do you want to accomplish? What do you stand to benefit by being in collaboration? Ask yourself, what am I bringing to the table? What you are bringing to the table will determine whether you will be the dominant partner or not. Whether you are the one pitching or you are the one being pitched to these questions matter. Objectively look at these questions because they will guide you in making the right decision. Explore and hypothetically project how working together can accrue benefits both ways.
You probably might have gone through this article and might still feel like collaboration is not a great idea. Well, you must know that it has been proven that as times ensues focusing on being competitive alone loses its fizzle. Bringing in collaborative initiatives can be the missing ingredient for your business because you have focused on being competitive for too long. Apple was at one point in their history kept alive by investment from Microsoft. Sony and Nintendo worked together in history too. The bottom line is that you must embrace the idea of collaboration with business competitors because you might need it at some point.