Salesforce growth strategist shares car case study
“Growth and comfort never co-exist." - Ginni Rometty, chairman and CEO of IBM.
There are 10 paths you can take to grow your company.
- Customer experience (inspire more purchases and advocacy)
- Customer base penetration (sell more existing products to customers)
- Product expansion (sell new products to customers)
These growth strategies rely on keeping your friends close, but there’s another strategy that keeps your enemies closer.
It’s the underappreciated path called Co-opetition, and it’s resulting in unlikely and unexpected partnerships such as the recently announced alliance between Fiat Chrysler Automobiles (FCA), BMW, Intel Corporation, and its newly acquired subsidiary Mobileye, to develop autonomous cars.
In her book Growth IQ, global customer growth and innovation evangelist at Salesforce Tiffani Bova says the first cars from the group are due to roll off the production line in 2021.
She explains that three of the group (BMW, Intel, and Mobileye) had formed a trio back in 2016, but lacked mass and scale.
“What the team needed was one more partner, one targeted at the mass market, especially global customers – even if it meant that partner might be a potential competitor of BMW,” Tiffani Bova writes in Growth IQ.
Enter Fiat Chrysler, one of the world’s largest automakers.
The new group is, according to Dean Takahashi of VentureBeat.com, talking about “creating both co-pilot driver assistance technologies, and full-blown self-driving cars. They will leverage each other’s strengths and resources to do so, and will co-locate engineers in Germany to do joint work.”
Indeed, BMW AG chairman Harald Krüger was quoted saying the 2017 alliance would allow global scaling.
Bova writes that A.T.Kearney estimates the apps, equipment and vehicles related to autonomous driving will pull in $US232 billion in revenues by 2030 (around 7% of the total automobile market). It’s expected to double between 2030 and 2035, representing 17% of the global automobile market.
It’s too much money to leave on the table by staying in your silo.
Nissan Motor, Renault and Mitsubishi Motors are "in the final phase of talks" on joining Google's camp for developing autonomous taxis and other services using self-driving vehicles, according to Nikkei Asian Review this week.
And, Toyota in January 2018 announced its own Co-opetition strategy, partnering with Amazon, DiDi (ridesharing platform), Pizza Hut, Mazda, and Uber to collaborate on “vehicle planning, application concepts, and vehicle verification activities.”
Bova says it’s an example of using two growth path strategies Co-opetition and Partnerships, in combination, to extend brands, and gain access to a new customer set.
She makes two points about deploying growth path strategies:
Point 1: It’s not just which growth strategy is chosen, it’s the context in which it’s deployed, and the combination and sequence of initiatives.
Point 2: Which path you choose will, and should, change over time. No growth path should be written in stone.
Tiffani says the most dangerous part of Co-opetition is not what competitors agree to do together but what they won’t do – especially when it comes to proprietary tools and assets that they refuse to share, even hide from their partners.
“In this partnership (BMW and Fiat), it’s BMW that appears to hold the upper hand when it comes to software acumen. Will it actually share with Fiat Chrysler…the proprietary code BMW develops to remain competitive..?” she asks.
Bova says of all the growth paths, the Co-opetition path may be the most fraught with peril, and the long-term success of the BMW-Intel-Mobileye-FCA partnership is far from guaranteed. However, she says the players have achieved a presence they never could have accomplished on their own.
“Proceed with caution,” she says.
Under what conditions is Co-opetition a good idea?
Tiffani Bova cites three:
- If the partners’ strategic goals converge while their competitive goals diverge;
- The size and market power of both partners is modest compared with industry leaders;
- Each partner believes it can learn from the other, and at the same time limit access to proprietary skills.
Our exclusive livestream interview with Tiffani Bova, growth strategy and innovation evangelist for Salesforce, on Tuesday, February 19 at 8.30 a.m. will be available to members of The Growth Faculty On Demand business book club. Members who log in can access the interview on the day by clicking here.
To become a member, and receive discounts to live events, click here.