During a lunch conversation with an alliance executive of a large corporation, we brainstormed in the broadest sense about strategic options and the question “what should your company do yourself, with what things should your company team up with others?” A little bit exaggerating, I challenged him and said “what is the core activity of your company? That’s where your focus needs to be; everything else can be done in partnerships with others.”
Many companies in established industries built their organization over time in a way that they could do it all themselves. However, times are a changing. New competition is arising, often enabled by the internet. Think about the airline industry and low-cost carriers, the banking industry and Fintech, the taxi industry and Uber.
Time to re-evaluate your company’s strategic options. Then indeed the question comes up, for existing and new activities, “what is the most effective way to pursue these activities?” followed by a question like “do we do it ourselves, do we buy what we need, or do we team up with others?”
With others, you can do everything beyond the core activity of your company. Yes, with my focus on collaboration I am indeed biased. In the opening of this article, I said that I exaggerated in the lunch conversation, but now I’m not. Think about how your new competition does it. There are small and agile startups out there that have the potential to bypass you at light speed. They are good at one single thing and they team up with others to create a joint value proposition that their customers love.
Uber, for instance, does not have drivers on the payroll and they don’t own cars either. They are excellent at matching demand and supply. That is their core business, a service they now also extended to food delivery with UberEATS.
For the next new opportunity question yourself; what is your core strength and how can you best pursue the opportunity? I am biased towards collaboration, especially in the form of strategic alliances. However, the world isn’t black and white and there can be good reasons to build it yourself, to buy what you need or even create a jointly owned company with a partner. As long as you make a deliberate choice for the best way to pursue the opportunity and don’t jump into your default mode of growing. After all, for the new competition, there is no default mode. They will follow the best and often fastest path towards success or failure a new lesson.
On the 9th of March 2017, the next Online Global Masterclass will begin. In this Masterclass we will explore alliances and partnerships to grow your company and to pursue new opportunities. Evaluating strategic options is one of the first elements we will discuss. Strategic options for your particular situation. Therefore the Masterclass setup is limited to 8 participants: to ensure full focus and maximum result for you!
This week’s links:
- More information about the Masterclass
- Remix Strategy * by Ben Gomes-Casseres
- Build, Borrow, or Buy * by Laurence Capron and Will Mitchell