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Module 01: Examples of Collaborations

 

“Collaborate or die” An exaggeration? Or not? Many of today’s top companies view collaboration as central to their business operations, and as you will see in this module, business collaboration can be used very successfully to reduce costs, improve profit margins, reduce risk, gain market share, gain valuable new knowledge amongst other benefits. In this module we will outline the different collaboration options and opportunities. It will not be an exhaustive guide to all aspects of collaboration, but we will provide an overview of different business areas in which SMEs can work together for business benefit, such as; training, new product development, and improved customer service and market development.

At the end of this module you will be able to:

  • Appreciate the different business areas where SMEs can collaborate
  • Understand the different structures in which SMEs can work collaboratively
  • Relate some practical examples of SME collaborations
  • Identify ways to source collaboration partners and be familiar with a range of collaboration tools
  • In order to cultivate business innovation, the condition and tools for the transfer and exchange of knowledge between businesses must be created, as the scale and scope of SMEs often limits their generation of innovation. Individual firms cannot be good at everything. They must specialise and learn to combine their capabilities with those of other firms and organizations. These collaborations consist of identifying possible partners (i.e. clients or suppliers), providing them with appropriate information, setting up a common environment for communication and finally starting commercial operations. Business collaborations are increasingly recognised as a form of informal, yet continuous, learning and can provide SME staff with the knowledge and skills necessary to boost innovation and keep their businesses competitive.

    Although many companies seem to be aware of their endangered position, only few of them have clear strategies for the future. Many share the assumption that synergy and collaboration is only possible if the collaborating companies belong to the same owner. What is not seen is that the benefit of collaboration is more in the bundling of knowledge and skills rather than in the bundling of capital.

    In a recent survey issued by “Collaborate to compete” project team, when asked about the main barriers to collaboration the majority of SMEs from five European countries were identifying lack of collaborative opportunities and lack of visibility on how to collaborate as main obstacles. The common problem was also lack of potential partners and contacts and lack of information on how to collaborate.

    It is therefore not surprising that only few SEMs see networking and collaboration as crucial for success. At the same time the experiences of companies in this field are rather insufficient, which correlates with very different believes and mental models concerning collaboration. Based on the survey results SMEs see business collaboration as a way to identify new business opportunities, access new markets/consumers and improve their product/service and through that also customer satisfaction.

    Five types of SMEs can be identified with their actual understanding of networking, their needs and their fears:

  • The regional market leader – entering collaboration is rather easy for this type of SME because they often have the necessary skills as a prerequisite for collaboration.
  • Six important prerequisites for successful collaboration are:
    (1) A realistic, positive self-image,
    (2) A clear understanding of own vision and values,
    (3) Ability to build up trust,
    (4) Willingness to learn together,
    (5) Ability to endure frustration,
    (6) Long-term thinking.

    Networking is done primarily with the objective to remain competitive at the home market and to expand into new markets. Besides, this type of SME started early with exploring the economic possibilities and the possibilities of collaboration abroad.

  • The national outlet of an international corporation – some managers of this type of SME undertake strong efforts to ensure the existence of this regional outlet. This is done primarily by building up special competence centre or by being a service provider or a logistics centre for neighbouring countries. For building up the necessary core competencies regional networks are sought and used.
  • The internationally successful supplier – this type is especially present in the car manufacturing business. Collaboration is primarily sought with the clients, hoping that this is the best way for sustainable development.
  • The one-dimension endangered enterprise – if at all this type of SME is looking for a dominant partner who brings in capital and the willingness to invest. On top there are also the expectations for new impulses in management and marketing. The willingness to invest (at least to spend time) in collaborative efforts is near to non-existing.
  • The especially risk-avoiding enterprise – new collaborations are viewed rather ambivalent. Because this type of SME is trying to avoid risk it is only looking for collaborations with similar risk-avoiding companies. However, such companies are running into the “information dilemma”. To avoid risk these SMEs are very reluctant to share information with potential partners. In thus happens frequently that by avoiding giving substantial information to each other nothing is done to build up trust among the partners thus failing to set necessary first steps for the collaboration.
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    This is a great program, i would recommend this program to one and all.

    Ian Sayers
    Giant