There’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.