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5 key benefits of collaboration for the growth of your business
It's undeniable - the business ecosystem is rapidly changing at an unprecedented pace due to technological change and its spill-over effects. Aimless competition should perhaps now give way to strategic collaboration to meet common goals, and manifest mutual benefits.
What is a Collaboration?
Collaboration is a powerful business tool pooling effort and expertise of different organisations to proactively innovate and grow. Financially, collaborations help boost sales in new markets, even enabling smaller companies to tender for larger contracts. Operationally, sharing resources leads to cost-efficiency. From a human resource development perspective, employees of both organizations develop their skills and capabilities alongside safeguarding their jobs which boosts the overall morale. Intellectually, a collaborating R&D unit will leverage combined expertise to innovate and yield positive results.
Why collaboration matters?
Most entrepreneurs and businessmen are driven by a single point focus to expand their business within the realms of their set products and services portfolio. This often leads to several lost opportunities and stunted business growth, due to a myopic approach to business. While collaboration offers a wider range of opportunities, addressing problems and challenges across segments, businesses are still skeptical to explore this, due to various perceptions and fears. However, if handled with transparency and trust, businesses can work together to grow and explore solutions to common problems, often transforming a win-lose business scenario into a win-win partnership!
Key benefits of a business collaboration
1. Expand customer base
When companies collaborate, they get an opportunity to reach the audience of their competitor turned collaborator without sacrificing their brand or its identity.
When Starbucks and Spotify collaborated to launch a marketing campaign focused on creating a musical ecosystem for people who drink coffee, Spotify artists got access to Starbucks consumers. Starbucks got access to Spotify's 25 billion hours of music, an add-in feature to their Mobile App, and Starbucks employees got a Spotify premium subscription.
2. Expand service portfolio
The acclimation of rapid technological advancement gives a shorter life-cycle to products while raking astronomical R&D costs. If companies collaborate, they can pool resources to cut costs and mutually benefit from disruptive technological innovation.
Mobile phones and cars are equipped with in-vehicle car telematics like Google's Android Auto and Apple's CarPlay, helping both industries grow together.
3. Accelerate growth with latest technological advancement
R&D requires innovative thought leadership and gargantuan resource allocation. Using a polycentric innovation model, companies, and countries could turn sustainable ideas into reality. Take Biocon for instance. In October 2010, Biocon and Pfizer struck a $350-million marketing alliance to make four insulin bio similar products more commercial. Since then, Biocon has created a global innovation network which now co-creates and co-markets new solutions. In fact, Biocon is largely responsible for the readily available affordable medicine across India.
4. Equip businesses to handle challenges
The start-up ecosystem in India competes aggressively to find solutions to unique but similar problems. They have limited resources, demanding investors, and enormous challenges to overcome. Oftentimes, this leads to start-ups racing towards their own extinction.
Start-ups can cooperate in some activities while competing in others. That's what online platforms Swiggy and Spotify did with their #EatThePlaylist collaboration. Combining good food and good music, they collectively expanded their consumer base.
5. Enhance Brand credibility
When organizations come together to produce innovative products, it topples the competition. It also multiplies the combined market share of the collaborating companies, cumulatively enhancing their credibility. Sony Corp. and Samsung Electronics joined hands to develop and produce LCD flat-screen TV panels in 2004. This birthed the now popular Sony 'Bravia" and Samsung 'Bordeaux."
If larger corporations are collaborating, what's stopping the cash-starved Indian start-ups from following in their stead? The benefits far outweigh the risks of business collaboration in a world which is rapidly moving towards integrated service offerings. Synergy is rightly defined as 2+2=5.
By Rohit Raul, Founder & CEO, Business Opportunities Club...