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  • Writer's pictureAustin Jones

Business Tips - Utilize Your Competition To Optimize Output

Updated: May 29, 2023

team embrace
Teamwork makes the dream work

One of the best business tips you'll ever master is learning to work with your competition and not just against them.

Competition is often seen as a negative force that should be attacked head on. Companies often try to outdo each other in terms of market share, sales, and profits. However working with your competition can actually be beneficial for businesses of all sizes. Learning how to share the stage so to speak. By collaborating with competitors - you can tap into new markets, share resources, and reduce costs.

The most well known examples of competition working together is "operating agreements" or "strategic alliances." These are agreements between Fortune 500 Companies that are in direct competition with one another.

There is a trade agreement between Apple and Samsung.

Although these two companies are competitors in the smartphone market, they also have a complex relationship that involves both collaboration. Apple and Samsung rely on each other to produce various hardware parts that are interchangeable and even customized to fit their competitions devices. This mutually beneficial relationship has allowed both companies to maximize their profits and maintain their competitive edge in the smartphone market.

There's a trade agreement between most major auto manufacturers.

Ford, Chevrolet, Ram, and plenty more all agree to stay within a similar performance level of their vehicles. The premium sports car models from each manufacturer ever year - all stay within the same realm of performance in top speed, acceleration, and more. Not to mention there is a growing stretch of international manufacturer trade agreements, for instance the auto industry is trying to make it illegal to work on our own cars or bring it to a private repair shop. Forcing repairs to only be done at their manufacturer specific shops.

There is the partnership between Microsoft and Sony. The two companies announced that they would be working together to develop cloud-based gaming services. Even though Microsoft and Sony are both competitors in the gaming industry, they recognized that they could benefit from each other's audiences. This collaboration has allowed both companies to expand their reach in the gaming market, increasing both companies profits.

Burger King and McDonald's will throw shade at each other on social media or even in their advertisements. This creates kind of a joke loyalty test among their customer bases, where it gives them something to talk about that encourages purchasing food from both establishments to truly compare.

Trade agreements and working with competition isn't alien to the biggest companies in the world, it's actually integral to their success. You see this in most major industries and small local business is of no exception -

Small local businesses can also benefit from working with their competition.

For example, two small coffee shops in the same town could collaborate on a joint marketing campaign that promotes the benefits of buying local coffee. By working together, the two businesses can reach a larger audience and increase their customer base.

I just saw a Facebook group pop up called "850 food truck owners" and this is exactly the type of energy we need. These competitors can discuss what locations have the best crowds. They can compare food distributors and menu item profit margins. An appliance breaks down, one truck owner of the whole group likely knows a good repair person.

Landscaping companies often niche into their own specialty.

Irrigation systems, lawn maintenance, tree cutting & stump grinding, bush-hogging, etc. Often times a customer will ask for a service that their landscaper doesn't provide. If all the landscapers in a local area network together - they can give referrals to boost each others sales while building rapport with their customers.

My hometown of Destin has a big recreational and commercial fishing industry. Captains are often so over booked that they keep a list of other boats for referring customers they can't serve to. During the peak tourism fishing season, its hard to even find a boat captain to book with. So captains can make extra money from referrals - just booking out their competition.

Restaurants hosting cook off competitions, surf shops hosting product expositions, the limits are truly endless. If it works for fortune 500 companies, it can work for mom n pop shops too.

Working with one's competition can be a smart business strategy for companies of all sizes. By collaborating with competitors businesses can tap into new markets, share resources, and reduce costs. This approach can also lead to stronger relationships between companies while increasing innovative growth in the industry. These tactics can strengthen your community and commerce, not just your enterprise!

Follow Business Goals Group for more business tips.

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