"Frenemies" - Sleeping with the enemy'

‘Obamanomics” seem to have taken over Hillary and Bill, the way they endorsed Obama with such precision as the next President of US at the Democratic Convention in Denver. It’s one of those hard to believe handshakes which narrate how sleeping with the enemy is not a sin. Tough times are producing some surprising bedfellows and sleeping with the enemy just seems to be one of them. I call it “Frenemies” and wiki describes it as a portmanteau of friend and enemy which can refer to either an enemy disguised as a friend or to a partner that is simultaneously a competitor. So why am I talking about making bedroom stories with enemies (or rather Frenemies) when I should be concentrating on fixing my business, which is in the midst of a whirlpool of strangling relationship between airlines and the agents? Well that’s coz my margins are exerted and the principles (I hate using the word airlines these days) are turning the heat on my business by cutting commissions and competing with me directly. That makes me take a rabbit out of the hat and think of something as illogical and as radical as cooperating and working together with the rival trade and business entities.

With the global economy on the rocks, businesses everywhere are desperately searching for ways to save money or boost revenue – even if they require collaboration with the enemy. Arrangements in which firms compete vigorously with one another, while also cooperating in specific areas – known in management jagron as “co-opetition” – are not new. Airline (uhhhhg…hate using this word) has shared check in, gate management and other facilities to reduce costs and create economies of scale.

Few rivalries have been as nasty as that between two NY newspapers -Rupert Mudroh’s New York Post and Zuckerman’s Daily News. The two titles likes to bicker over which has bigger circulation and scurrilous gossip about each other are avidly reported. Yet, behind the scenes executives from both the papers are talking about working together in some areas, such as distribution, in an effort to slash costs. Such is the power of being “Frenemies”.

So why not give this concept a try in our beleaguered industry and replicate this model of “live in” relationship between two or more companies that come together for a common cause. Crafting co-opetition is a tricky business, not least because potential partners need to swallow their pride first. Firms have to figure out exactly where you are cooperating and where you are competing, and not get your staff confused.

It makes perfect business sense to consolidate and create economies of scale while retaining your business existence and identity. Travel agents across different markets (both geographically and different market segments) can join hands for a range of services and activities that can make them use size to their advantage. They can form cartels to avert the risk from big sharks and other predators (big consolidators and on line portals) by integrating and consolidating their business backwards. So while keeping the customer interfaces same the operating systems of these businesses can be strengthened by consolidation. Enormous cost and revenue benefits can be extracted from such relationships wherein using scale and size agents can procure and source bigger and better incentive deals from suppliers like airlines and hotels.

Imagine the case of four travel agents in a city serving different market segments getting together and cooperating to achieve higher levels to airline sales and thus attracting higher PLB and other incentives. Not only will they be able to share each other’s core competencies, they will become more competitive and adaptive and be able to service their clients better. Informal tie ups of this kind already exist in the industry through backdoor diplomacy but we need to take it to the next higher level of mutual co operation and understanding through well pronounced tie up and relationships wherein an alliance of kinds can be formed at the local, regional and national level. It’s not hard to imagine a travel agent alliance across India or maybe across the Globe gaining scale and size bigger than airline alliances aka Star Alliance types. So should we say “What an idea Sirjee!”