Turning Competition Around: How to Use it For Your Own Benefit
It’s natural to look at your competitors in the marketplace as the enemy. Many companies and CEOs are afraid of [...]
May 2 2011 by ChiefExecutive.net
It’s natural to look at your competitors in the marketplace as the enemy. Many companies and CEOs are afraid of those against whom they compete. And even their allies (will my allies steal my business?). Martin Zwilling for the Harvard Business Review explores why pitting yourself against your competition isn’t always the best strategy.
Zwilling calls it coopetition, or “to partner with your competitor in such a way that both parties can substantially benefit from the other’s resources.” Often times your strengths may be your competitor’s weakness, and vice versa. So why not figure out a way to learn from each other?
Here’s why Zwilling suggests this collaborative approach:
- Best of both creates a new market – you can combine your strengths and weakness to create a better product (otherwise such a product would be prohibitively expensive for you to make)
- Cost sharing and economies of scale – both HP and Dell are competitors, but they both use Intel processors (their products become less expensive and compatible with a larger market)
- Upsell related products after initial sale – you can both support each other’s business by cross or up-selling the other’s product with your own
- Integrate for new or critical mass – your products might complement each other nicely causing a consumer to purchase the bundled product instead of another option
- Cross endorsement – if you have different products you may be able to start referring each other or marketing to the same clientele
- Possible investor – large companies often invest in starts ups that may compete with their own technology which is cheaper than doing your own R&D