Saturday, September 13, 2008


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Dear Friends:

Competition requires a tremendous effort at defending your business against others potentially serving your chosen marketplace. The competitive spirit, combined with entrepreneurship, have created every great business, and every giant industry. The will to succeed and the will to be noticed above others are powerful motivations for achievement -- especially during times of general economic prosperity, and during the initial phase of a company's trajectory.

The practical truth, however, is that it considerably more efficient to consolidate and build alliances (often through either the absorption of competitors or the sharing of turf with them contractually) than to spend time in a defensive/offensive alternating strategy. Befriending and negotiating are more effective than alienating and issuing challenges. The great planners and designers of conglomerates and cartels understand this and use it is as a primary strategy. They absorb and grow. They promote sharing.

In a tempestuous economic time, blind competition becomes increasingly suicidal, even when the thought of sharing a "smaller pie" becomes contrary to certain hard-wired survival instincts.

Ask yourself these simple questions, on the subject of partnering and cooperating:

  1. Why should I invest new money in something that someone has already developed?

  2. Why should I fight for market share when I can consolidate marketshare?

  3. Why shouldn't I consolidate and add more products (diversification), as well as expand and cross-pollinate my customer list?

  4. Isn't a larger company (through consolidation) going to get better vendor terms, greater credit facilities, and a more diversified talent pool of employees and staff?

  5. Can't I grow my entire business (markets, products, talents) more quickly through consolidation?

  6. Can't I create efficiencies (through elimation of redundant positions and functions) through consolidation?

  7. Can I integrate businesses with a supplier, my consumers (if they are resellers), or with a competitor?

  8. Can I combine forces with a company outside of my industry if we sell different, non-competitive products to the same market?

  9. Can I combine forces with with a company who uses the same vendors that I use?

Substantial tasks and skills are required to form the alliances and partnerships which annex business "territory" and create the means to defend it by sheer virtue of size or dominance. Some of these tasks and skills are enumerated quickly below:

  1. Networking. You must create as many contacts as you can in order to either create or be presented with potential opportunities;

  2. Research. You must learn about the strengths and weaknesses of your prospective target partner. What are the existing and prospective benefits and costs?

  3. Negotiate. Weaker partners are usually extremely easy or extremely difficult to acquire (a curious, ideosyncratic bi-polarity,), while stronger partners are almost invariably more challenging to deal with -- this is largely due to the perception that they have much more at stake to lose. They can take their time to evaluate the pros and cons. You must appear strong, yet reserved in your acquisitiveness, in order to court these desirable allies. Also, if you present your quarry with a parade of all of the benefits you offer, and don't discuss a bit of what you expect (or demand) in return, you will seem less than credible;

  4. Communicate. Be in touch with your chosen allies as frequently as possible. This increases their comfort with you, their reliance upon your presence as a voice in their affairs, and the free flow of valuable intelligence back to you for your use. Be participatory. Be real. Be present.

  5. Share. It would seem to be elementary, but this aspect of partnership and alliance-building seems to be forgotten. If you hear of any news which could have an effect upon your ally or partner, get that information to him/ her immediately. Also, if you discuss a resource which you have discovered which has increased or enhanced your business in any way, share that information as an added benefit to your partners and allies. By making it obvious that you care about them, you make it easier for them to let their instinctive guard down, and begin to trust and care about you.

These are tempestuous economic times. Fortify yourself, and your business interests with powerful circles of well-chosen partners and allies.


Douglas Castle

p.s. Internationalists! Two quick actions that I would recommend...

  • Click on THE NATIONAL NETWORKER and subscribe to get your free networking newsletter immediately. The letter is fabulous;

  • Click on THE RELATIONSHIP CAPITAL TOOLKIT and start monitoring the site for highly-specialized services and products designed to monetize your networking efforts and acquired contacts. These tools will only be available to subscribers to the THE NATIONAL NETWORKER.


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