Industries Must Now Consider Coopetition as the Ultimate Business Model
Cooperating with your competitor is not exactly a vocabulary that exists in the traditional sense of business. But we are living in disruptive times, and “traditional” is slowly becoming outdated as people and businesses find themselves sucked up into new ways of doing things.
In the life sciences industry, the reality is that costs and complexities increase with every rise in the standards of care. The problem with this trend is that it becomes constantly more difficult and costlier to advance any further.
Despite the increased effort that organizations in this industry put in to sustain their output, there’s a constant decline in the overall return on investment, with the value added to patients shrinking at each level.
That is not a sustainable trend. So companies in this industry are under pressure to come up with smarter ways to innovate. The problem is that pharma is one of the industries that has yet to fully adopt and utilize progressive technologies like the cloud, which could have a significantly positive impact on the increasing R&D budgets.
With shrinking revenues occasioned by the increasing R&D costs at companies within the life sciences industry, there’s less and less money to invest back into R&D.
Data driven decisions for increased efficiency
Right now, life science companies have to consider strategic digital transformation as a way out. With this transformation comes more efficient and automated processes that have been proven to increase R&D success.
At the core of this change are smarter predictive analytics tools that yield more data-driven decisions. Today, data is the currency of any enterprise that would like to build its business around a sustainable model, and companies within life sciences are not an exemption.
The idea is to be able to mobilize data all across the enterprise and transform work, which is easier done when technology is symbiotically used by these enterprises.
Time to build new business models for the future
Biopharma and sciences industry companies have to now adopt a more forward thinking approach to their R&D and way of doing business if they are to create real value for patients and survive into the future.
The question is how to make that happen.
Already, industries such as hi-tech and automobiles have shown that if you want to really save on design and development costs while accelerating the pace of innovation, then you must be willing to develop innovative and relationship-driven partnerships.
What can we, in life sciences and pharma, learn from the fact that some social-media sites such as LinkedIn allow new users to log in using their existing Facebook or Twitter credentials rather than force them to create fresh new credentials that are exclusive to these sites?
Or the simple fact that some competing automakers such as Toyota and BMW have jointly designed and developed new platforms underpinning new cars like Toyota Supra and BMW Z4?
These are competing businesses. Why then are they working together when they’re supposed to be focusing on outdoing one another?
Welcome to the coopetition, the business model of the future
The concept is called coopetition. It involves partnering with other businesses on those activities that are not your key differentiators in the market, while going solo on your ‘secret sauce’ or those core competencies that are exclusive to your product or service offering(s).
In the above two examples, the sites are cooperating with Facebook and/or Twitter to simplify the user’s journey and attract more users while enhancing Facebook and/or Twitter; a perfect win-win scenario.
The automakers, on their part, are sharing many parts of these new cars as a cost-savings strategy, but still differentiate at the end in the interior and exterior finishes that appeal to their respective markets.
If you look at things through this kind of lens, the concept of coopetition becomes practically a no-brainer for companies in life sciences where R&D costs could be hugely reduced by cooperating in the cloud, a shared environment that offers unlimited data and computing resources with limitless ways to cut costs through such cooperation.
In this space, there’s no limit to how pharma and social sciences companies could collaborate on various overlapping areas which would otherwise cost money to research and develop alone. Working together in a strategic partnership allows these companies to combine their product and/or service strengths with minimal cost and time expenditure. As a result, this leads to a much faster pace of innovation and expands the market for both collaborators.