Road to Growth – Collaboration, Not Competition - Image

Road to Growth – Collaboration, Not Competition

Working with, not against, competitors, may provide the boost many firms need to drive expansion, according to a survey by takeaway ordering service Just Eat.

Feedback from over a thousand small businesses revealed that almost one in three believed that some form of collaboration with competitors would be the most effective route to growth in the year ahead.

The survey also identified that many firms are very familiar with the practice of joint working with competitors. Only 14% of businesses admitted that they have never worked with other firms in the same market as themselves.

“We’ve uncovered a real culture of collaboration in businesses in the UK,” said David Buttress, Just Eat’s UK managing director.

Recession brings businesses together

The appetite for joint working has been fed by the long recession, according to the survey. While the enthusiasm for collaboration is high, many firms admitted that when the economy improves, they will be much less inclined to cooperate with their competitors.

It’s no surprise that tough times have encouraged closer relations between firms targeting the same customers. With profits under pressure, many have been forced to focus on a narrower range of products or skills. This has led to a greater use of competitors where customer needs have been broader than those they could supply.

How collaboration feeds growth

It’s this focus on the customer which is helping firms reap benefits, even when they bring in their competitors.

It may be that a business wins a contract which it is not really big enough to deliver alone. Choosing to struggle through with limited resources is a strategy with a high risk of failure. An alternative is to let a competitor get involved, balancing the risk of them poaching the customer against that of the benefits of being seen to do a good job.

Collaboration can also be successful because the customer sees that their needs are being put first. Rather than trying to retain all the work, and profit, for themselves, a supplier brings in outside help to get the job done faster or more effectively, to the benefit of their client.

The outcome should be a satisfied customer, who may be more willing to commit to further business, or be an advocate for the firm, providing valuable word-of-mouth marketing.

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