Smart entrepreneurs go completely against the herd mentality of business. They don’t compete and this is how they build highly successful businesses. How could they not compete you ask, arguing that competition is the core of an economically viable company and economy. Interestingly enough, smart entrepreneurs do not compete, instead they take advantage of their
Smart entrepreneurs go completely against the herd mentality of business. They don’t compete and this is how they build highly successful businesses. How could they not compete you ask, arguing that competition is the core of an economically viable company and economy. Interestingly enough, smart entrepreneurs do not compete, instead they take advantage of their competition and make strategic alliances with them.
Keep Your Business Enemies Closer
Indeed, smart business owners keep their partners close, but their economic enemies even closer. Although this may seem counter-intuitive, developing strategic alliances with your competition to expand the overall pie, ensuring that you both get a larger slice of profits.
The need for strategic alliances is especially strong in industries where competition is fierce. Many entrepreneurs can feel very isolated in their business, feeling as if the competition is closing in on them. With that said, simply by altering your mindset, you can quickly begin to see the opportunities in your industry. Indeed, you can quickly turn the competition lemons into sweet, profitable lemonade for all parties involved.
Shifting from Competition to Strategic Alliance
For the vast majority of business owners, it is not easy to embrace the competition and that is completely understandable. However, once you begin seeing the beauty of your competition, you can capitalize upon their standing in the market place to further your exposure and profitability. There are several modes of analysis that can help you make the jump from typical competitor to smart ally:
1. The closer you hold your competitors, the greater you will understand how to differentiate your niche, giving you an economic edge in both the short and long-run. For example, although two competing companies may sell spyware software, upon closer evaluation, they are not the same. Company A’s target audience are consumers, while Company B targets the technical directors of major corporations. Having in-depth knowledge is incredibly powerful, both in terms of perfecting a branding strategy and generating higher levels of sales.
2. There are plenty of fish available in the sea, especially if you are targeting clients on the Internet. The Internet provides an endless plethora of traffic, which means you have a nearly limitless supply of clients. This eases potential conflict tensions, and instead, boosts the overall exposure for the entire industry. The selection of blogs, all who quote, cite, and link to their competitors, is a testament to the power of strategic alliances within one industry.
3. With enough creativity, harsh competitors can turn into great strategic alliances that boost your revenues and help your business reach the next level of profitability. For example, website design is an incredibly competitive industry, with new companies entering into the field every day. However, it is still very effective for two competing companies to become partners. Every single company, regardless of how competitive the industry is, has a specific niche. In the case of website design, one company may be excellent in Flash, while the other company specializes in Java. Thus, by referring clients to each other that are seeking a specific type of programming, both companies benefit.
The internet has changed the face of business and economic processes dramatically, and it is those smart businesses that can harness the power of strategic alliances that will be able to reach their full profitability potential.