[R268]Restaurants And Las Vegas

So in case that you are not familiar with the term, let's start by defining coopetition. Wikipedia gives us this definition:

"Coopetition or Co-opetition is a neologism coined to describe cooperative competition. Coopetition happens when companies join forces for areas of their business where they don't have competitive advantage, and where they can share common costs. A good example is the cooperation between two automobile manufacturers: Peugeot and Toyota sharing components for a new European compact car in 2005. In this case, companies will save money on shared costs, while remaining fiercely competitive in other areas. For co-opetition to work, companies need to very clearly define where they are working together, and where they are competing."

Long-term business success comes not solely from competing successfully with other restaurants but also by working with them to your advantage.

Coopetition is part competition and part cooperation. When restaurants join forces, they can create synergies that allow them to be much more efficient than working alone. Restaurants can then compete with each other to determine who takes the largest share of the potential customers.

A good case for restaurant co-opetition is when there are many restaurants concentrated in a small area. If you look at this from a traditional business point of view, it looks like this is a bad idea.

Why should anybody open a restaurant in an area already full of restaurants?

However, the reality is that all this abundance of places to eat, attracts customers who may just go to the area without any specific restaurant in mind until they arrive and make their decision over there. This is where the competition starts.

The restaurants with the best ambiance, or the best sounding menu, or the best quality/price or funny enough, with the most people usually bring the most customers...

Of course, there are many other examples of coopetition like:

- Food courts: All the restaurants are together in places like shopping centers, etc. sharing tables, trays, cleaning services, etc. Again, they all bring customers to the same spot (cooperation) and then compete for their business (competition).

- Advertising: sometimes restaurants group to put together a food magazine or a restaurant flier where they all pay and contribute (both in money and in content) to the publication.

- Special food events: Several restaurants could organize together food-related events where they can all bring their dishes. Because of the participation of many restaurants, many people attend these events (there is usually music involved and often many other activities as well).

- Etc.

As you can see, these are some of the possibilities for coopetition. However, there are some other intriguing ideas for you to consider. Here you have a few to think about:

- Cross-Promotion with restaurants that offer different food than yours. Often you don't compete directly with other types of restaurants. If a person is in the mood for Italian food, for example it won't go to an Indian restaurant, or viceversa.

Perhaps you can join forces with restaurants in your area that have other styles of cuisine, and together create a coupon book that you can distribute to the regulars of all the participating restaurants. Or maybe you could create a discount card that your customers could use in any of the restaurants in your area. This will attract more customers to your neighborhood.

- Coopetition with restaurants that offer similar kind of food than yours to do cross-promotions. But that are not located near your place.

Again, usually people prefer to go to restaurants that are near their homes or workplace. If there is a French restaurant nearby and they are in the mood for French, they won't travel far to a different French restaurant... at least that this other French restaurant is so superior that it is worth it the trip and this where the competition kicks in.

So what can you cross promote? Well, if you have an ethnic restaurant, you could create a newsletter sharing printing and perhaps distribution costs to clients of all the restaurants involved. The newsletter should cover articles about the foods, culture, geography, etc. of the restaurant's native country.

But what if your restaurant is an all American place? You still can have trivia, etc. about the specific States, some local recipes, etc.

- Join Forces to negotiate better deals for linens, food providers, bulk printing for menus, etc. For example, you could talk to the owners of nearby restaurants and agree to use the same distributors for common goods like table papers, glassware, appliances maintenance and supply, printing services, etc. You could then get a volume discount from these distributors and everybody will benefit.

These are just some quick examples of coo-petition. Joining forces with your competitors could be a win-win proposition. Just be smart about it and think about areas where both of you could benefit.

Can you think of more areas for coo-petition? I would love to know.

Happy Co-opetition!