Co-opetition will surpass competitiveness-April 2021

Competition between businesses has always driven consumer benefits. But a more collaborative approach can be even more beneficial, as Miguel Turnbull at Infobip explains.

McDonald’s vs Burger King. Coca-Cola vs Pepsi. British Airways vs Virgin Atlantic. Throughout corporate history, there has always been intense rivalry between brands which, on face value, offer the same product. More often than not, this benefits the consumer. It forces companies to keep prices competitive and to continue to up the ante in terms of new product development: more flavours, better quality ingredients, and so on.

Yet, there is another way of doing business – one that is inclusive, open, and encourages dialogue – and that is in the form of partnerships. The latest example of the positive effects of link ups has come from beer manufacturer Brewdog and supermarket Aldi.

What is co-opetition?

In every industry, we see competitors that operate in similar markets, employ similar skillsets and often use the same resources and technologies to address the same challenges. And with the increasing costs associated with research and development, and fresh competition from young upstarts springing up constantly, the modern business landscape is less black and white. Companies are joining forces to collaborate on new products, manufacturing processes, software systems and, of course, on innovation more generally.

This is something management professors Adam M. Brandbenburger and Barry J. Nalebuff cover in their book Co-opetition, claiming that businesses working in the same market that form ‘co-opetitions’ are far more competitive.

Defining success

Take, for example, the world’s biggest retailer, Amazon. Its e-commerce third-party selling platform, Amazon Marketplace, is a business model that demonstrates how co-opetition can work to mutually benefit both parties. It, of course, works for Amazon, which gets a cut from all the sales on Marketplace, while the third-party retailers get access to a massive global customer base.

If we go back to Aldi and BrewDog, a similar partnership is in place. This alliance all started when Aldi made a copycat version of a BrewDog product. In retaliation, BrewDog joked that it would make a ‘fake’ Aldi Beer. But people loved the idea, resulting in its “ALD IPA” being stocked in actual Aldi stores across the UK. BrewDog’s CEO James Watt has since announced the partnership will extend to 2,000 stores in Germany too.

What’s next?

Of course, competing is inevitable as corporations and brands diversify their business and enter new markets. So, for co-opetition to work successfully, businesses need to have a clear understanding of the functions that are unique to their company and where they can partner with others to add value, expand reach and deliver a better service for customers.

Those businesses that are able to find their perfect match and work together using cross industry expertise from both parties to drive opportunities rather than competitiveness, will ultimately see better results for customers. A joint approach simplifies digital transformation, expands the range of services available, and ensures customers get the best expertise, skills and results possible for their investment. And during such a turbulent time for business, embracing collaboration to drive positive results is more important than ever.

The software space is the ultimate partnership hive, particularly those that find complementarities that make 1+1=3. What I mean by this is that the benefits of cooperation between two software companies will bring added value to the market. And in the end, value will always surpass competitiveness.

Miguel Turnbull is Partner Program Development Expert at Infobip.

Infobip is a global cloud communications platform that enables businesses to build connected experiences across all stages of the customer journey. Accessed through a single platform, Infobip’s omnichannel engagement, identity, user authentication and contact center solutions help businesses and partners overcome the complexity of consumer communications to grow business and increase loyalty. 

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