Tough times are bringing competitors together

The economic slowdown is forcing businesses that are fierce competitors to look at ways they can co-operate to boost flagging margins, The Economist.com reports.

The economic slowdown is forcing businesses that are fierce competitors to look at ways they can co-operate to boost flagging margins, The Economist.com reports.

New York’s two mass circulation tabloids, The New York Post and Daily News, are renowned for their intense competition for readers, but apparently they are now working together on things like distribution in an effort to cut costs.

Car makers are looking at doing the same, with BMW and Fiat reportedly considering joint production of components for some of the car models they produce.

And parcel delivery firms DHL and UPS are also getting together to cut their delivery costs in the US, with UPS agreeing to use some of its excess plane capacity to carry DHL parcels – in exchange for fat fee, of course.

But, according to Boston Consulting Group’s Harold Sirkin, botched co-operation between competitors can have damaging consequences – and require competitive pride to be put aside.

“You have to figure out exactly where you are co-operating and where you are competing, and not get your staff confused,” Sirkin says.

 

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