What if you could actually work WITH the other companies in your industry to grow your business?
Wait, what? Why would you work with your competition? In the traditional world of capitalistic business, this is a foreign concept.
Actually, you can see it happening all the time. Look at attorneys, for example. Many attorneys handle a range of cases. They may handle business law, tax law, and even family law, all at the same time. However, you will see attorneys referring cases to other law offices all the time, even when they could handle the case themselves. Why? They may be too busy at that time to take on new cases. They may know of an attorney especially suited to a particular case. This is active cooperation with their competition.
This concept is known as Co-opetition.
What is Co-opetition?
This business strategy works on the concept that competitors can benefit from each other if they work together. They know that there is plenty of business out there for everyone to share in. By cooperating with each other, they are benefiting their companies and their industry at the same time.
Another way to think about Co-opetition is from the view-point of abundance versus scarcity.
Traditional business works on the scarcity model. This thinking says there is only so much to go around and the business must focus on taking everything. That means using business practices that not only boost your business but put down the competition. It means not working with competitors in any way shape or form.
Those that believe in the abundance model realize that there is plenty of business for everyone. By cooperating with each other, they are improving their own business while remaining competitive with each other.
Examples for Clarity
Do you need a couple of examples of co-opetition?
In the traditional scarcity model, each antique dealer would need their own business space, their own advertising budget, and their own operating expenses. The concept of an antique mall goes against the scarcity model. It offers a single place for antique lovers to visit to see multiple antique dealers.
By cooperating with each other the dealers have more people coming to their stalls. They share a space and the operating expenses of that space. They use common advertising to bring people to the mall. Yet, they compete with each other because they are vying for the antique lover's purchase.
PC companies are in competition against each other. They want you to choose their company for your next desktop, laptop, or tablet. Yet, if you look under the covers, you will see a good deal of cooperation between the companies.
PC companies use the same architecture in their computers. They have industry standards they cooperatively develop and follow. This keeps research costs down and offers multiple suppliers of PC parts. While each company has its own standards, by cooperating on common standards, they are improving the marketplace for PC companies overall. It drives costs down which increases the profitability for everyone.
The abundance viewpoint realizes that by cooperating with competitors, you are not only boosting your company, you are boosting your industry. That can increase innovation, bring down operating costs, and make everyone more competitive in the marketplace. Lower costs bring in more buyers.
How can you move your company from the competition stance to co-opetition stance?