Co-opetition: So When is it a Good Idea to Work With a Competitor?
This relationship between competitors is often called co-opetition (an amalgamation of cooperation and competition). It’s a popular theory in gaming where competitors work together for greater good.
The PMA’s Industry Advancement Council has released a whitepaper titled Co-opetition, available for download from our resources page. The following content is a summary of what you will see in the full whitepaper.
Most often collaborative efforts develop organically with two parties coming together based on circumstance – such as networking events, through friends, peers or another party. Other times, businesses are seeking out a partner that has specific expertise in areas they fall short. Either way, businesses need to fully vet a co-opetition partner to make sure it’s a good fit that will be mutually successful.
Here are some questions to consider before entering a collaborative relationship:
Is this a reputable company or a fly-by-night business looking to make a quick buck?
Who is the management team behind the company and what is their experience?
Do they have success cases that I can review and/or clients that I can speak with about their results?
What is their reputation among my friends, peers and colleagues and have any of them done business with this potential partner?
Is the company using a verifiable method for what they are doing or are they just touting some magic behind the scenes that they will not explain or disclose?
Is what they are doing on the up-and-up and not crossing any legal or ethical best practices that the industry and our business strictly adheres to?
What is benefit (time, resources, financial) for our company and our clients?
How complicated is any integration required for on our end or for our clients?
If a potential collaboration partner makes it past the first phase of investigation, you can dig deeper to see if they are a good fit:
Send an in-depth email or discuss the potential partner with your team; get their feedback.
Speak with your in-house development team about the technical merits of the other parties technology – will be easily integrated into your existing systems; how complicated is deployment and set-up; what are the benefits and challenges on that end.
Evaluate with your top managers whether or not this is financially beneficial for your business and costs associated.
Seriously consider which clients can be approached to use as a limited test case and reach out to them to solidify their participation.
Solidifying the Relationship
If all of the above works out, you can usually negotiate a test period and contract. Having a trial period allows you to see if this really works as promised before making a long-term commitment. It also gives you protection by mitigating the risk of exposing all of your clients to something that may not pan out. Yes, there are times when no matter how much work is put into a partnership, it just doesn’t come together as expected. In addition, this enables you to evaluate a real working relationship with the other company to determine if they are responsive, flexible, and work well with your team.
It’s a lot of work and planning to bring third party partners into the mix, but putting your client’s trust and tying your own business reputation to another company is a huge deal. Missteps can be costly, so it pays to understand all aspects of how this partnership will impact your business, your reputation, and the trust you’ve built with clients. However, successful partnerships can also raise your game and lead to other ways to work together that benefit all parties and drive success for clients.
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