Fans of Top Gear may recall that classic episode when Clarkson et al attempted to destroy a Toyota pickup. It would have been poor TV if, after a series of dramatic incidents the vehicle would have failed to start but of course being a Toyota, it did. No surprise then, as Toyotas are reputed to be extremely reliable. The famous Toyota build quality is in part due to the innovative manufacturing methods developed by the company, such as ‘Just in Time’ and ‘Lean’, which have become commonplace in UK manufacturing circles. In our own industry, for example ‘lean’ has become a popular tool enabling businesses to eliminate waste and to focus only on activities which add value.
Every so often a new management concept such as ‘Lean ‘comes along, and the current mantra for success in a post Covid world could be ‘Co-opetition’, a term describing the ideal of business rivals competing in some areas and cooperating in others. Of course, this is not an entirely new concept. If you have been knocking around this industry as long as I have you might recall the co-option project involving Blakedown and Far Plants (or Fargro as they were known then), to bring Salvia Butterfly Blue to the market, or indeed the much larger project involving 5 major nurseries in the late 80s to bring Ballerina Trees to the market. These two examples are classic (and early) examples of coopetition where companies in the same market work together to explore market opportunities for new products but remain very competitive as they seek to gain market share. A more recent example of coopetition outside our industry is where 3 companies, Toyota, Peugeot, and Citroen have combined to produce a new city car, but each company is marketing the new car under different badges with minor changes in detail. There is of course nothing new under the sun, but the same thing can appear in different styles and forms.
The advantages of entering a co-opetition type arrangement are clear:
- Costs can be saved across the whole of the business.
- Research can be shared – why reinvent the wheel when someone else may have the answer – sharing technology and outcomes from research is a classic aspect of coopetition
- Market share can be gained.
- Co-opetition allows organisations to concentrate on their core competencies – what they are good at.
As are the disadvantages:
If you are benefiting, so are your co-opetition buddies. In other words, your competitors are gaining as much as you!
By sharing information, you may give ideas or competitive advantage to a competitor. You will be relying a lot on trust, as being open can mean vulnerability.
The key thing is that each business involved should be clear about what they are prepared to give, what they want to achieve, and where the line between co-operation and competition is clearly drawn.
So how does this work in our industry? As our industry is very fragmented (typified by small independent businesses) many small businesses have realised they lack ‘buying power’. Consequently, we have seen a proliferation in co-opetitive buying groups – garden centres working with other centres to aggregate their purchases, thereby reducing the cost price. The success of The Tillington group, Choice Marketing, and Future Marketing are just some examples. Could this type of coopetition work in the landscape sector? I think it could and would provide significant costs savings. Not only is co-opetition alive and kicking amongst buying groups but many other businesses are collaborating by sharing key financial data – not just sales data, but key financial ratios that can be used to measure the success of a business. Some of you might remember the APL scheme called the Landscape Business Improvement Scheme – an initiative that was designed to facilitate the sharing of key data amongst landscapers.
There are also great opportunities in our industry to promote collaboration to build barriers to entry, or to avoid product substitution at a time when we are faced with an increased threat of imports or products being substituted. Businesses in the horticulture sector are also collaborating with each other and consumer organisations to invest in research, product development and marketing. Typically, this is organised by ‘official’ bodies, who are often comprised of members from an industry – outcomes from research and marketing are then disseminated to the wider industry for the greater good. In our industry we have numerous examples of this type of collaboration ranging from research organisations such as the Brassica Growers Association to membership bodies such as the Association of Professional Landscapers. Of course, all these organisations are stronger when they have industry support and involvement.
There is no doubt that co-optition works. Costs are reduced, market share is gained, and knowledge is shared – it sounds ‘corny’ but together we are stronger, and you definitely don’t want to be the one on the outside when all the other businesses have got together! Together we can achieve more, but to make this happen we need to perhaps break down our traditional British reserve and open up to the possibility that working with a competitor might grow our own business. In my experience I have noticed that since the ‘credit crunch’ there has never been so many business opportunities – difficult trading patterns breed creativity. Yet the problem is the single operators do not have the time and resources to exploit opportunities. Together perhaps in a co-opetitive arrangement they might be able to.
Remember the best athletes train together, but once the race starts, they are still out there to win!
Neville Stein MBA
Horticultural Business Consultant
Tel: 0044 7778 005105
Email: info@nevillestein.com
www.nevillestein.com