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All Businesses Are Interdependent - Is That A Good Thing?

Unless you work in a Communist State or in the Public Sector, all businesses are interdependent. What this means is that without other similar businesses around, your business would struggle to exist. Is that a good thing?

The supply chain

Although you may think that you can survive by yourself, just stop and think about how reliant your are on receiving your wholesale supplies. This doesnít just apply to products. There are many wholesale suppliers to the service industry such as IT Services or the Yellow Pages. Could you really exist without any external help?

Keep your supply chain options open

Itís all and well having a reliable, automated set of suppliers. But what happens if a supplier goes bankrupt? What happens if a supplier goes on strike? You have to have an alternative plan in place in case the worst happens.

If you donít have an alternative plan in place then itís your customers that will suffer. Even although you may have existing service level agreements in place with your suppliers, nothing is guaranteed in business.

Arrange an alternative supply chain

There are bound to be supplier companies out there dying to win your business. Why not arrange a Ďfirst alternativeí option with them? I.e. If your existing suppliers let you down, youíve already arranged which company you will call. This has two benefits for you. Youíve already ascertained that the alternative supplier has the capability of meeting your volume requirements. Youíll also be able to agree a price before the emergency happens. Then the new supplier wonít be able to hold you to ransom.

Are your competitors really your competition?

Itís also important to conduct a thorough analysis on your competition. Then meet them for lunch. First of all review your local competitorís product and service offering. Review how much theyíre charging and who their existing clients are. The chances are that after you take your magnifying glasses off youíll realise that your businesses are more different than similar. This means that you both have a lot to talk about.

You donít have to be scared about meeting your Ďcompetitioní for lunch. Youíre not going to talk about you existing profits or your existing operating systems. So youíre not divulging any significant trade secrets. The worst thing that will come out of the meeting is an occasional customer referral. The best thing that will come out of the meeting is a long-term strategic alliance.

Do you co-exist or are you making things hard for yourself?

The majority of businesses that try to survive without continually analysing their supply chain and interacting with their so-called competition arenít living up to their full potential. The fact that businesses are interdependent is a good thing only if businesses themselves recognise it and embrace it. Only then can they take full advantage of the subtle relationships that can significantly impact their customer offering.

About the Author: David Bain is founder of the business articles resource Build Your Own Business features hundreds of different business articles on 28 different subjects including Strategy, eBusiness and Change Management. Latest additions to the website include a Top 5 Business Articles Podcast.

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