Thursday, August 14, 2008

A By-product of a Tough Economy: Enemies as Friends, or at Least as Willing Partners

I don't know anyone who says, "Thank God the economy is tanking!" That doesn't mean there aren't some positive, and unexpected, side effects of our latest economic decline. With dollars scarce, investors leery, and earnings expectations scrutinized like never before, companies previously considered bitter enemies are sharing marketing dollars, cross-promoting one another, and sharing best practices.

And we're not just talking about retailers like Bed, Bath, and Beyond and The Container Store who have a very small amount of overlap in product. This week in The Economist there is an article detailing that even bitter rivals like the New York Post and the Daily News are discussing ways to share distribution; car companies are considering the co-production of common parts. 

These kinds of previously unheard of collaborations beg the question about competition: Is the competition level to the extent that we have it in the U.S. necessary, or even sustainable? Is it good for us? I don't doubt that healthy competition is the basis of a stable free economy; it is the corner stone of a capitalistic society. But is too much competition, well, too much?

I think about all the choices that we have in grocery stores, big box retailers, car lots, and the endless supply of different brands of products available on-line that do essentially the same thing. Look at all our choices of social networks and on-line communities. My friend, Jon, and I were discussing the likelihood that at some point some of them have to die out or merge. Maybe the same is true for companies like newspapers, retailers, and car manufacturers. Tough times can make strange, though perhaps necessary, bedfellows. And maybe they'll even persist once we come out the other side of this latest downturn. In difficult times, maybe we learn to mend fences and see their value even when we don't have our backs against the wall.             

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