Can competitors become partners?

If you think that by partnering with a competitor you will become less competitive and lose market share, you are wrong. Competition and cooperation is a balance that everyone needs in this day and age. In a resource-constrained environment, competitive collaboration minimises costs. Indirect or indirect competitors bring alternative products to the market, sell them in different segments and do not compete with each other.

Even within the same niche, you can find areas for cooperation, especially if you operate at different price points. A key aspect of a good partnership is the equal sharing of information and resources.

Law of the jungle? Take care of your strength
"The most adapted species are not the most aggressive. Fighting your competitors is an expensive proposition, both in terms of manpower and money. Especially if there are many competitors or if you are just starting out. The strategy of seeing a competitor as a partner has many advantages. To survive and grow your business, you often need to make contacts and look for opportunities to collaborate. The most important thing is to have shared values and real partnership agreements.

Combine knowledge
Complementarity is useful and promising for both parties. The alliance between Samsung and Sony made it possible to launch the first LCD (liquid crystal) TVs together with S-LCD Corporation. Samsung's development of flat-panel TVs has progressed rapidly thanks to its contacts with Sony. Working with a stronger partner allows you to gain additional expertise. It is important to strike a balance between what you can share and what you keep to yourself. Being too closed or too open is counterproductive.

Reduce your costs
Henkel and Reckitt Benckiser have merged their freight logistics centres. As a result, they have reduced their logistics costs by 20%.

Collaboration is efficient and beneficial for business competitors. A good example is Uber Eats. To reach remote small communities, the company partners with local restaurants or delivery services. This has allowed Uber Eats to expand the audience and geography of its delivery service, which would have been difficult and costly without working with competitors.

Increase sales volume
It is difficult to produce and sell a complete range of products. For example, companies that specialise in supplying specific equipment may work with indirect competitors. If a customer places an advanced online order and wants to buy additional equipment or order-related products, they can buy everything in one place.

Toyota, which specialises in hybrid and petrol cars, goes out of its way to meet customers' needs and, if necessary, supplies them with parts from competitors Ford or Honda. By selling cars, safety or navigation systems from competitors, Toyota increases the turnover and sales of its dealers and global distribution network.

Cutting costs
When two companies competing in the same market decide to pool their resources in a particular area, they usually reduce their costs significantly. They don't need to duplicate efforts in research and development, manufacturing and marketing. It is important to remember that it is easy to work together in this way if everyone starts on a level playing field. To avoid wasting time and money developing and testing new transmissions, Ford and GM decided to share their production technologies. But they decided not to develop the idea of a common diesel engine for pickup trucks. In the first case, the companies cut costs significantly. In the second case, they took no risks.

Cross-selling related products
Companies may offer their customers complementary products or services offered by their competitors. Apple and Samsung compete in the smartphone market, but sell phones and accessories through their mobile operator networks. This approach allows the tech giants to advertise and promote their products to different market segments. It also gives customers a wider choice of smartphones and communications plans.

Competitive collaboration
Indeed, competitive collaboration is becoming the norm in modern business. Apple and Samsung, DHL and UPS, Ford and GM, Google and Yahoo - examples of such partnerships speak for themselves.

Effective competitive partnerships require well-designed partnership agreements and strategic vision. Competitive collaboration can be a powerful tool for achieving common goals and ensuring sustainability and growth for all companies involved. HLTS Co. Ltd conducts market research on partners and competitors in the early stages of business formation. Our marketers examine the current competitive environment, identify customer needs and analyse their price sensitivity. HLTS's online marketplace provides guaranteed income, helps sell goods, works with regular business partners and connects drop shippers and manufacturers.