Frenemies: Turn a Competitor Into a Competitive Advantage

BY ROY CANIVEL, EDITORIAL FELLOW@ROYCANIVEL_JRN

Some matches just work: Taco Bell and Salt & Straw's recent chocotaco collab is indeed a work of art. But then some pairings are just, well, tougher to get a handle on.

Exhibit A in the tougher-to-get-a-handle-on department: Consider a fast food chain selling a breakfast item made by another fast food chain. That's what Wendy's will be doing with Cinnabon later this month. Starting February 26, Wendy's is offering a breakfast option called Cinnabon Pull-Apart. 

Wendy's could have made its own new breakfast item, so why didn't it? Does the partnership itself have value? Kelly Goldsmith says "yes." The marketing professor at Nashville's Vanderbilt University, notes that the true value to the tie-up is in the intrigue.

"When you see a collaboration that you're not expecting, it catches your attention and it makes you want to learn more," says Goldsmith. "That is, I think, one of the main reasons why we see these collaborations."

"It's definitely something small businesses can take advantage of," she adds. However, she said this would be difficult for relatively unknown brands since this strategy requires a certain degree of familiarity. For the public to find something unusual, they must be used to it being something else.

"I do think there has to be some level of familiarity and fondness, ideally. But conditional on some level of familiarity, you can still use it to promote that intrigue and potentially get customers to pay attention and come into the store."

A collaboration of this sort can also expand your market by tapping your partner's audience. This can work to the benefit of lesser known brands. For example, a local boutique can work with a local spa. "If they see that this boutique that they like has endorsed the spa, maybe they'll end up going to the spa as well," explains Goldsmith.

Experts call this co-opetition, a term that was coined in the early 90s to describe a situation where business rivals work together to achieve a specific goal. They're still competitors in most aspects, but in some, they cooperate, thus the portmanteau: "competition" and "cooperation."

Another secret to successful pairings: It's ideal if both partners are under the same umbrella but aren't one-for-one competitors. There should be "enough critical differences" for the partnership to be beneficial, says Goldsmith. She cited the 2017 collaboration between Louis Vuitton, a high luxury brand, and streetwear brand, Supreme. The limited edition collection, which consisted of a broad range of apparel and accessories from bags and footwear to hoodies and jeans, was considered a game-changer, one which the Financial Times described to have prompted a "global shopping stampede."

In other words, collaborating with a competitor may seem unusual, but when done right, it just works. It's a marketing strategy that can pique public interest, even if the initial reaction is a mix of awe and disbelief. But Goldsmith also said businesses have to be careful with this. "You don't want to have the sum be weaker than the individual parts," she says. 

Photo Credit: Getty Images.