BY DR. TANAI CHARINSARN

NOVEMBER 05, 2016

“If you do not seek out allies and helpers, then you will be isolated and weak.”—Sun Tzu, “The Art of War”

Whether in the world of business, sports, or any competitive game with more than one player, everyone always thinks of competing for victory. Whoever has an advantage wins. However, the age of such advantages is getting shorter every day, and the number of players is increasing, especially sub-players.

Meeting consumer needs in the past In the past, those who could meet the needs of consumers and had high production capacity often dominated the market. However, over time, more players began to see the business opportunity in focusing on emotional needs, even if the products were similar. If they had a better design, looked better, or were more appealing, they could capture customers from the traditional market leaders. This is even more evident in the current era, where information sharing can be done globally, and accessing low-cost manufacturing facilities in other countries is not difficult. Competition in terms of product specifications and production capacity can no longer create a competitive advantage. Many businesses in the same industry face intense competition, resulting in lower revenue and profit.

Evolution of Strategies to Meet Consumer Needs Therefore, the idea of collaboration emerged as a replacement, creating partnerships (Alliances) to generate new, unique values for consumers. Collaboration can occur at various levels, from joint campaigns and cooperation agreements to joint ventures or even mergers and acquisitions. However, it is essential to consider that not all collaborations are successful. Often, conflicts arise between both companies, leading to their eventual separation. Based on the study of such cases, three key success factors for collaboration have been identified.

1. Organizations Must Have Different Positioning or Value Propositions Both organizations must have different positioning or value propositions because if they offer the same value proposition and target the same audience in the same market, collaboration may not be as effective as when they have different value propositions. A difference in positioning or value proposition allows the partnership to offer unique value and potentially attract customers from the traditional market leaders. For example, when Honda collaborated with bicycle dealers in different provinces to help sell Honda motorcycles, Honda gained access to showrooms and outlets without the need to invest in creating new ones. Meanwhile, the bicycle dealers earned a higher income through motorcycle sales.

2. Partner Organizations Must Support Each Other's Capabilities The abilities or competitive advantages of partner organizations must complement each other. Collaboration can occur between two companies in the same industry, even when one has a competitive advantage in one aspect, such as product manufacturing or design, while the other excels in distribution or transportation networks. Partnerships between organizations with different abilities can be successful as long as they support each other's collaboration efforts.

3. Compatibility and Cultural Alignment Often, conflicts and disagreements arise when senior management holds different opinions and have incompatible cultural values. It can lead to delays in decision-making or decisions that lack commitment and follow-up. Therefore, collaboration can be successful when there is compatibility and alignment in organizational culture. When both parties share a similar vision, goals, and values, they can successfully drive the collaboration.

In conclusion, to succeed in collaboration and partnership, organizations must have different value propositions, support each other's capabilities, and ensure compatibility in culture and values. These factors are essential for creating and maintaining successful collaborations.