February 22, 2007   

Competitive cooperation


José Ignacio Gafo Gómez-Zamalloa

Yesterday the Ministry of Health in Spain decided to stop a project of law that would have forbidden any alcohol drink including wine and beer to be advertised. The big winners for this were the wine and beer producers. The big losers, the young people the law was trying to protect.

Leaving apart ethical considerations, what is really interesting to me here is how fierce competitors turned into amazing cooperation to protect the industry interests. Where properly organized and recognized, it is usually called LOBBY, and is from my perspective a very powerful Marketing Tool that the companies should not lose out of sight..

In all Strategy and Marketing Courses you are prevented against competitors and advised to make their life impossible. Because the worse they do, the more you will be able to gain. This is partially true and should not be taken as an absolute dogma to be applied under all circumstances. It is based on a Win – Lose situation that can replaced by a Win –Win one when there is an opportunity for everybody to win.

This is the case for instance when you can work together in order to enlarge or to avoid reducing the market for a specific product or service. An example of the first would be when you launch a new product category and invest money in order to educate the customers on the benefits of it. An example of the second would be what the wine and beer producers did for avoiding the referred alcoholic law to go ahead: They unified criteria, worked through an organization and put an incredible amount of pressure in the government for not going ahead with it.

So do not lose out of sight this: Your objective is to maximize your revenues and profits (while satisfying your customer needs). For doing it you might go against or hand in hand with your competition. Actually, if you think it carefully, the profitability of a sector is highly correlated to the amount of cooperation you find within the players in that specific sector. Make your choice.


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Posted on 22 February 2007 in International Marketing

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