Deal with It: How to Harness Coopetition

Coopetition. Almost every company in the tech industry deals with it, whether they like it or not. The situation comes up all the time. Some customers want your end-to-end products and services, while other market segments seeking out a multivendor solution are clamoring for companies to integrate their technologies and make them interoperable. 

On the surface, the easy course of action might be to abandon competing partners and focus exclusively on selling internally developed products, but it is usually the wrong one. In order to maximize earnings per share, companies need to capture each of these market opportunities.  

“The more and more the ecosystem approach takes off, the more and more we have to work strategically with our partners,” said Jamie Donald, CSAP, program director of technology partners at Axis Communications.

How do you know when and where to compete and when and where to collaborate? How do alliance teams shepherd salespeople through often blurred lines? How should an organization identify competitive and cooperative situations with partner/competitors? Donald walked attendees of the 2024 ASAP Global Alliance Summit through some “guiding principles” that can help all stakeholders, including internal colleagues and partner counterparts, untangle “coopetive” situations in his presentation, “Challenge or Opportunity? Proactively Managing Strategic Coopetition.”

Bang Your Head: Keeping Coopetition from Driving You Mad

Before getting into these principles, Donald and copresenter Spencer Blevens, an experienced manager for strategy and innovation/management consulting at BDO, asked the audience for tips on managing coopetition. The ASAP community didn’t disappoint.

One attendee recommended using common customers as a cudgel to spur a spirit of cooperation within all parties.

“Starting with a group of shared clients, understanding the value they see, that's a good reality check from the customer to bang our heads together,” said the participant. 

Another urged those invested in the partnerships to, wherever possible, find “a random connection of trust—two CEOs went to school, to the same college, together or served in the military.” 

Finally, a third contributor came up with the idea of showing what the company’s top line would look like without these partner-driven sales.  

“How detrimental would it be to all these partners to try to do everything yourself? It probably is not a viable business model.”

Indeed, the numbers usually make the case for managing coopetition, and Donald shared some figures from 2020 that illustrated the point. At that time, 73 percent of companies were competing with business partners. “I imagined that that number has only gone up,” he noted. The ones that felt that they managed it well almost doubled their revenue growth and expected partner-influenced sales to account for 61 percent of future growth.

“You can either stick your head in the sand and sort of pretend it's not there or you can actually deal with it,” said Donald. “If you deal with it, well, you're going to be more successful.” 

When to Collaborate with Partners? When It Works for the Customer

The question then becomes how to deal with it. Donald provided some advice on how to sort out when and with which customers competitors should put aside their differences and collaborate.  

“We're clear on which projects we're going to work on together. That's maybe the easy part,” said Donald. “Let's also be clear on where we're not going to work together, and where we are going to compete. Let the best person win in that [competition] and do it in an honorable way. That has been the trickiest part so far.”

As with any other technology partner, it is critical to monitor changes in your competitor’s technology roadmap, not just to make sure that your company is keeping up with market demands but also to ensure that you are taking advantage of features and functions that can boost sales efforts. 

“Know by working with [your competitor’s offerings] which one fits with which customers,” Donald advised. 

Rewriting War and Peace? Skip to the Good Parts

Of course, there’s always a balance to be struck. It may be tempting to recreate the competitor’s entire catalog, but then you might not be taking advantage of the efficiencies that come with partnering versus building offerings from scratch. Plus, the organization runs the risk of overburdening its product development group and making a mess of its product manual.  

“You end up with this 400-page document of all the features and functionalities, and no one can make any sense of it,” Donald said ruefully.

The more resourceful approach: choose only the parts of each technology/service provider’s needed for each customer implementation. 

“It's easier to sell more to an existing customer that's happy than it is to keep going out and finding that new business all the time,” said Donald. “[Clients are] at the heart of everything.” 

Keep checking back with this blog over the next month for more summaries and highlights of 2024 ASAP Global Alliance Summit sessions!