How to Work with Competitors

October 1, 2012 | By | Reply More

Are you overlooking strategic alliances because you call them “competitors”? It is amazing how many business owners and corporate employees view similar businesses strictly as “competitors”. And its sad that these same business professionals throw away some of the best opportunities they face, if only they could see the opportunity.


What do I mean by that? If I own an Italian restaurant isn’t every other restaurant in the city or town my competitor, my archrival? Well, maybe, but not necessarily; but for sure they are just a rival if that’s how you choose to look upon their business and treat them.

A wiser approach would be to look upon these other businesses and think, “OK, so we compete for some of the same clientele or market. But, what can that business and mine offer each other that is mutually beneficial? In what ways can we work together without being at risk?”

My first thoughts in the Italian restaurant example are these:

  1. If I need a part-time employee, perhaps another restaurant has a good solid employee that could use more work. Perhaps the other restaurant doesn’t have that many hours to offer. But, if I have contacts within the other restaurant’s management, then we can save one of us an employee turnover and the other would get good help to fill a part-time position.
  2. If I am having problems with a vendor and their supplies, I could call up the another restaurant manager and “compare notes”. I could get and/or share very valuable information that doesn’t hurt either business, but helps both of us in many ways.

If you think about this scenario for just a few minutes, I bet you can come up with some other examples quite easily.

Here is a prime example that I was personally involved in a couple years ago:

At the time, I was working for a fabric manufacturer, managing a manufacturing facility. Suddenly we had a terrible running condition with a particular product line. Our equipment was bogged down and what production we could get on the product was off quality. Of course, we started looking at our process for something that had inadvertently changed to cause the problem. We checked machine settings, prior processes and so forth, everything we could think of.

Well, you have probably guessed the rest of this story – we finally decided the problem was with the raw material from our supplier. We called the supplier in. But, the best call we made was to a “competing” manufacturing company. Low and behold, we found out they had the same problem from the same supplier’s raw material! And just to be sure, we called a second “competitor” and got the same information. Imagine, all three of us were shocked and elated at the same time! If you have ever struggled with a problem in your business that you could not resolve, you can imagine how good it felt to suddenly have this information. As it turned out, our facility and the management of the two “competitors” worked together to compile information and testing results which gave us huge bargaining power with the supplier.

Now just think how long we might have struggled, or battled the supplier on our own, had we not decided to contact those competitors and work together.

The restaurant scenario and the manufacturing story are both examples of “strategic alliance” between similar businesses. There are many, many ways to form strategic alliances.

Advertising jointly is another opportunity. Everybody advertises where their competitors do. Why not stretch your advertising dollars further by combining efforts in some way. Their ad is going to be in the same publication or on the same radio station anyway. So why not figure out a way to share this space that is financially advantageous to both parties?

Or joining forces with another business to partner on a project for a large customer can be another way. Perhaps you cannot supply all the goods or services needed to complete a project. But, if you would partner with someone in a similar business, you could together satisfy the client’s needs, offer a first-rate proposal, and get business neither of you would have gotten alone.

Endorsing each other is another strategic alliance that Marketing professionals often use. They “endorse” each other’s marketing information product. They both gain creditability to potential buyers.

In the Real Estate industry there are many good examples of alliances. Real Estate brokers work together. Look at the things they do together – they share resources for property inspectors, mortgage lenders, contractors, etc. Why? Because they both want to close sales on properties with prospective clients. They work together and split the commissions on these sales. If they turn their noses up and don’t help each other, then nobody gets any commission at all.

So, back to my comment at the beginning of this article; “its sad that business professionals throw away some of the best opportunities they face, if only they could see the opportunity.” The next time you meet someone that you can see as a competitor, try to look at their business in a different way. Look for those opportunities where you could benefit each other. Don’t just “write them off”, clam up around them and hold them at “arm’s length”. You may be passing up a strategic alliance that could grow your business and give you the help you need.

Recommended Books on Strategic Alliances:

About the Author: 

Kim Eyer of . Offering web site design, affordable web site promotion, logo design, business services, “Master The Web” eBook, and much more. Get her FREE eZine, the WebSiteOwner, for webmasters and small business owners.
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