Securing your niche through coopetition

Dr. Linda Falkenstein

The idea isn’t new. Coopetition, that is. It’s been around since the 80’s and has been used by companies large and small to address mutually shared needs. It can be very powerful when used judiciously and with a watchful eye on your niche.

One of my favorite more recent examples is the union between the French car manufacturer PSA Peugeot Citroen and Toyota – a deal allowing each company to share components for a new city car. The products of that limited, carefully defined marriage were the Peugeot 107, Toyota Avgo and the Citroen C1. In essence, the companies saved money by sharing costs of development, resources and technology transfer. They remain fiercely competitive, however, in all other areas. Each is protecting its niche like a momma bear with a new cub.

The key here is knowing what your niche is in the first place. The fact is, when you’re really well niched, you have no competition. It’s a contradiction of terms. A niche is singular, unique, one-of-a kind – the only game in town. By being clear about your niche, you can confidently develop mutually beneficial relationships with other companies and/or organizations, without worrying that you’re going to lose business.

Another version of coopetition is when companies strategically share valuable space and/or a location to create critical mass, which, in turn, makes them more visible to potential customers. Think about the last time you bought gas, went to a fast food restaurant, or checked out cars. More often than not, these businesses aren’t lone wolves out in the prairie. They cluster together, creating a visual critical mass that is far more effective in catching your attention than a single establishment sitting out there all alone. And once they’ve got your eye, they are quite literally “banking” on the power of their niche to pull you in the door, to distinguish their place from the rest of the pack.

If you’ve never engaged in any kind of alliance or coopetition before, you may be gun-shy. Perhaps you’re saying to yourself, “How can I be sure the other guy won’t take my customers?” You’ll not be surprised when I say it all comes down to your niche. You need to be clear who your target customers are and equally clear who they are not. Once you’ve answered that and other key questions about your focus, you’re ready to identify a great coopetition partner. The following tips and/or questions will help you with that process:

Carefully identify your business’s product/service and niche.

List the resources you need to make your product or business more successful.

Think about and identify other businesses that have similar needs. They may well be in a related line of business or service.

Think win-win. Whether you call it classic alliance marketing or coopetition, the bottom line is the same: you are winning by helping someone else win.

A carefully designed coopetition agreement assumes that you know your niche, understanding the fact that you can’t be all things to all people.

Dr. Lynda Falkenstein is a business consultant and author of NICHECRAFT: Using Your Specialness to Focus Your Business, Corner Your Market, and Make Customers Seek You Out. To contact her with questions or comments, email This e-mail address is being protected from spambots. You need JavaScript enabled to view it or call 503.781.0966. Please note that the Vancouver Business Journal and Dr. Niche reserve the right to publish your letter or an edited version in all print and electronic media.

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