A Study on the Palette Strategy for Small-and-Medium-Sized Firms under Hypercompetition

Most of us believe that innovation is one of the key success factors for enterprises, SMBs, and entrepreneurs and to be their unique identity for cooperate missions and selling point on business. Yet, creativity most importantly comes from talented people, including internal and external sources. The more talented staff a company possesses the better chance of getting a leading position in their particular industry during their growing life cycle. Unfortunately, if a company could not create multiple growth curves over time to support their continuous growth, then its future is uncertain and its business may decline. This thesis addresses how to efficiently embrace external talented people, resources, and most importantly how to create new demand from the existing market. The key point is how to significantly reduce the developing time in order to unleash the potential of market success. Innovation does not need to be generated internally. It can be achieved by alliances with other companies. But the main criteria for finding correct partners is that they have to be either famous or at least influential on their market bases even if their business scale is not so big. Therefore, two or three little giants can join together to design and create a product based on each partner’s strength and capabilities. Also, their business partnership can achieve the best fit condition and everyone can obtain extra benefits from this alliance. The advantage of such a alliance group mode can be conceptualized as what I propose as “Palette Strategy”. There is no precise guideline for this type of cooperation nor certain principles to be followed. It is all about setting goals about what the end product should be and find a business model that fits this alliance group. After all, each party can obtain decent profits from the big pie and sharing mechanisms makes each party feel fair at least at the initial stage. They can both have the right to alter the cooperation mode after their first success. We also discuss the implications and suggestions for applying palette strategy in real world situations.