Competition is a core factor driving most business. Unless your idea or product is the one of its kind in the market and you have a monopoly on the sector, chances are your business is constantly taking into account what rivals in the space are up to.
Competition, they say, is healthy for business, driving innovation and pushing companies to find better ways to serve their customer base.
But, are there benefits to quashing competition and holding back a business rivalry in favour of a partnership? Perhaps a ‘you scratch my back and I’ll scratch yours’ angle could play a strong hand in boosting your business growth?
James Spenceley, Chair of Airtasker and Swoop Telecom, NED at Kogan and VC Investor
“You just never know when your enemy might become your friend.
“Having completed 20+ acquisitions, it has taught me that you never want to make an enemy as they won’t take your phone call when you want to make an offer to buy their business. The Telco Industry has had more startups and consolidations in the last 20 years than most industries, and it’s been incredible to see someone who you might have once viewed as a competitor then become an investor, or (less enjoyable) an investor who becomes a competitor.
“Some of my best business decisions have come from swallowing my pride, or by not reacting when pushed. The only constant in life is change, so don’t be a constant and you’ll be surprised what additional opportunities come up.”
Kym Huynh, Former President (2019/20) of Entrepreneurs’ Organization Melbourne, Founder of WeTeachMe
“I subscribe to the idea that “a rising tide lifts all boats”… and that together a greater industry can be built where everyone wins if the key players work together.
“I’m a big fan of reaching out to competitors and extending an invitation to coffee/breakfast/lunch/dinner. The insights, experiences and learnings that I gain from doing so are invaluable, and in my experience I have found most of my competitors open to: (1) meeting; and (2) developing a relationship.
“In particular, I have found that reaching out to competitors, that operate in different geographical locations, have been particularly helpful not only in willingness to connect but also the sharing of diverse thoughts and experiences.”
Mark Rendell, CEO, BK’s Gymnastics franchise network
“The franchise model basically operates on the premise that your ‘competition’ can be used to your advantage because there is room for everyone and there is strength in numbers. So yes, there are certainly ways that working with rivals can be advantageous.
“In business, goodwill really does pay off and this goes for business-to-business relationships as well. Knowing your rivals well and what they offer can allow you to refer customers in situations where you may be overbooked or you’re not able to offer specifically what the customer needs – and vice versa! And how often have we seen a successful campaign to attract customers to, for example, a particular region because competing businesses rally together to be more powerful, better heard and better funded as a combined unit. It’s certainly not a concept that any business should automatically exclude.”
Nick Browne, Director, Jameson Capital
“Partnering with a rival you respect, who can provide a complimentary skill set to that of your own, can be extremely beneficial. Where I’d advise considering this as an option is if you partner with a similar sized group to that of your own so that you can improve your offer and beat out a larger competitor that you couldn’t otherwise beat by yourself.
“I would also advise considering a partnership with a rival where you can share the benefits of a more lucrative transaction that you both then get a part of rather than competing head to head on something to the point that it becomes unprofitable for you both just for the sake of ‘winning.'”
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