Growth Mindset – Coopetition

Welcome to the first of a short series of articles focused on sales growth by Where Now Consulting.

This article is on one of the lesser used levers for growth, Coopetition. Collaboration between competitors for mutual business benefit is a mindset that has existed for many years in the form of trade associations. Since the mid 1990’s alliances between competitors have been used in a more formal way to achieve growth particularly in the pharmaceutical, IT and automotive sectors, creating growth opportunities to great effect. Coopetition takes many forms from joint product development utilizing the differing skills of competitors such as the alliance between Ford and Toyota for the development of hybrid cars to the market for home sales marketing houses via websites such as Primelocation.

Despite the proven success of coopetition alliances, they remain underutilized as a growth strategy and alliance leaders often face strong resistance as they try to develop coopetition alliances. Like all partnerships there are some fundamental areas that must be considered;

• Are both parties aligned on the strategy?
• Is there a balance between the parties in terms of what each brings to the relationship?
• Is there a cultural fit between the parties?
• Can a high level of trust be developed?
• Are the boundaries of the partnership defined and understood by all? This is particularly important with regards to customer relationships and intellectual property.
• How long is the partnership to remain active and what happens when it ends?

With changing customers seeking more choice and experience and technology disruption finding the right channels to access customers is becoming more segmented and complex. To achieve excellence in the growth mindset more choices are required to reach customers that are becoming more discerning in what they buy and the way they buy it. Coopetition could be one of these choices.

Although coopetition is often seen as being a strategy for Tech and pharmaceutical business many other companies are using it to achieve increased growth and improved customer experiences. Over recent years Steelcase, the global leader in the office furniture industry, has developed a number of coopetition alliances. The most recent is an alliance with Bolia, a Danish producer of furniture that focused predominantly on the residential market selling online and through retail stores situated across Europe. Steelcase recognized that changes in workers and the workplace was driving a trend towards a more residential “homely” feel to many workplaces. The agreement with Bolia resulted in a curated selection of the Bolia portfolio being added to the Steelcase portfolio under the Bolia brand. This coopetition provided Steelcase with a rapid and relevant evolution in its offering to its clients, its partners and business partners whilst offering Bolia access to the commercial interiors market globally.

Coopetition may not be the first option for creating alliances to increase growth and does require good capabilities within an organisation in managing alliances and partnerships but, as part of a wider strategy of alliances and channels it is a valuable addition to the growth mindset.