Want to Beat the Competition? Try Partnering with Them First

competitor partnerships

Strategic partnerships are vital to business growth – 85 percent of business executives agree. While partnerships are traditionally thought of as alliances between businesses with complementary, but not identical, services, partnerships between industry competitors can be just as effective.

Throwing the words “partnership” and “competitor” into the same sentence might turn people off but, if planned correctly, these very partnerships can yield huge results. Here are four ways leading businesses made it big by partnering with competitors.

Defining the Competitive Landscape

The first thing to remember when considering partnerships is that “competitors” do not necessarily equate to “threats.” Every company has its own core competencies that competitors cannot match. For example, though McDonald’s and Pizza Hut seem to be direct competitors in the fast food market, their offerings (hamburgers and pizza, respectively) appeal to different people at different times. Though the two businesses “compete” for a share of the same market, they do not compete for the same consumers within that market.

Partnerships between competitors tend to work well between early stage companies that are equal players in the same rapidly growing industry. Businesses in this stage should look to competitors of an equal size and outline points of direct rivalry and areas for potential collaboration.

Competitor Collaboration in Tech

The tech sector is one industry where collaboration between competitors has brought about huge success. Current industry giants Apple, Microsoft, Nokia, Yahoo, Google and more can attribute much of their early success to partnerships with competitors.

One of the most profitable partnerships in the technology industry was between Microsoft and Intel, known as the Wintel Alliance. The partnership allowed each company to funnel resources into one core competency: Intel into hardware development and Microsoft into software creation. Eventually this created a domino effect that later allowed Microsoft to join forces with IBM and create the revolutionary PC DOS operating system.

More recently, as Microsoft and Nokia struggled to produce mobile devices that could snag market share from iOS and Android devices, the two businesses formed a merger that would combine Microsoft’s software strengths with Nokia’s hardware expertise. Now, after the Microsoft-Nokia acquisition, Windows Phone stands a chance of competing with the big players in mobile.

Competitor Collaboration in Pharma

Collaboration between companies – especially in the pharmaceutical industry – is easier now than ever before thanks to the Internet and other new, advanced technologies. Today pharma companies are teaming up to share resources and information in order to speed up the creation of life-saving drugs.

In the search for a cure for cancer, two of the world’s largest pharmaceutical companies, Pfizer and Merck, have entered a strategic partnership. The two competitors will pool resources in order to bring new cancer treatments to market faster. Belén Garijo, president and chief executive of Merck’s biopharmaceutical division, said as much:

“Collaborating globally with Pfizer will allow us to benefit from the strengths and capabilities of both companies in immuno-oncology, further accelerating this promising asset in the race to address the needs of cancer patients across multiple tumor types.”

Competitor Partnerships at Powerlinx

At Powerlinx our goal is to help businesses grow in exciting new ways. As a business matchmaking platform, we occasionally identify one of our member’s competitors as a potential business partner – a result that has brought about big growth for our members.

Powerlinx member and precision steel ball manufacturer New England Miniature Ball (NEMB), for example, was able to diversify its products and enter into new geographic markets by partnering with another ball manufacturer Nanoball. When Nanoball received an order for a specialized product it did not produce, Nanoball passed through the order to NEMB. Through this partnership with a competitor NEMB was able to expand into a new market and double the output of its China facility. Nanoball was able to maintain its relationship with a valued client. This is just one example of a win-win alliance between industry competitors.

Want to learn more about how a partnership with a competitor or another company could spark new growth for your business? Learn more about how Powerlinx can help.

partnership strategies


Featured image by Tristan Martin