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Coopetition Strategy: Cooperation Over Competition in Business

From its inception, the business world has been viewed as a zero-sum game of competition. Competing businesses often view each other with suspicion and animosity, vying for a bigger piece of the pie by gaining market share.

However, in today’s fast-paced, networked-based economy, that dynamic is changing. The concept of Coopetition Strategy is taking hold as a new way of thinking about business.

This approach involves a shift from competition to cooperation between businesses, with an focus on mutually beneficial outcomes that increase the market size, enhance competitive positions, and utilize resources more efficiently. Coopetition Strategy is not a new idea, but it gained popularity in the late 1990s.

It was first introduced by two professors, Adam M. Brandenburger and Barry J.

Nalebuf, who argued that there were advantages to be had by working with competitors. Coopetition Strategy is beneficial because it allows businesses to set aside competition and work towards a common goal.

It recognizes that companies can benefit from working together in the networked-based economy rather than trying to go it alone. The logic of Coopetition Strategy hinges on the difference between a zero-sum game and a plus-sum game.

In a zero-sum game, one company’s gain is another company’s loss, creating an adversarial relationship between competitors. In contrast, a plus-sum game is where both companies benefit from working together, creating a cooperative relationship.

By moving from a zero-sum game to a plus-sum game, companies can benefit by sharing resources, decreasing costs, and improving efficiency. One benefit of Coopetition Strategy is the ability to expand the market size and develop new markets.

By leveraging each other’s strengths, businesses can create new products and expand their reach in the market. For example, in 2019, Toyota and Ford collaborated to develop a hybrid system for their respective pickup trucks.

The company’s work together to develop a battery that meets the demands of their respective customers, while sharing the development costs. Another benefit of Coopetition Strategy is the ability to utilize resources more efficiently.

By sharing resources, companies can save money and increase profits. In the early 2000s, Sony Corporation and Samsung Electronics partnered to collaborate on developing flat-screen LCD TV panels.

These two companies had historically been intense competitors, but their partnership allowed them to combine their strengths and develop improved technology. Additionally, Coopetition Strategy can enhance a company’s competitive position and increase its market share.

Through strategic alliances and partnerships, companies can license mobile operating system features and patents, allowing them to offer a more robust product without having to start from scratch. For instance, Google owns the Android mobile operating system which Mozilla, Microsoft, and Apple utilize to some extent in their respective products.

By licensing Android features, companies can provide better service to their customers. In conclusion, the networked-based economy is changing the way the business world operates.

Instead of focusing on competition, Coopetition Strategy, allows companies to work together, share resources, and move towards a common goal. Benefits of Coopetition Strategy include expanding market size, utilizing resources more efficiently, and enhancing competitive position by increasing market share.

While Coopetition Strategy may not be the right strategy for every company, businesses that partner with their competitors can gain significant advantages in the fast-paced, networked-based economy.

Examples of Coopetition Strategy

Coopetition is a strategy where companies combine their resources to achieve a common objective. While it is not a new concept, it has become increasingly popular in recent years, especially in the high-tech industry.

In this section, we will highlight some of the leading high-tech companies that have adopted coopetition strategy.

High-Tech Companies Practicing Coopetition Strategy

Apple, Amazon, Blu-Ray, and HD-DVD

Apple and Amazon are two leading examples of companies that use coopetition strategy to survive and thrive in the world of technology. In 2018, Amazon announced they would start selling the Apple TV and Apple Music through their platform.

It was a strategic partnership to combine the strengths of both brands to expand their customer base and retain existing customers. In 2008, two competing tech companies, Blu-Ray and HD-DVD, came together to form a joint partnership.

They created a platform called the Blu-Ray Disc Association which allowed for the creation of a universal, high-score platform for movie lovers. Together, they overcame technological challenges and started producing high-quality Blu-ray players and discs to the delight of movie buffs.

GE Healthcare and Intel Health IT

Another example of companies using coopetition strategy is

GE Healthcare and Intel Health IT. These two global firms in the healthcare sector partnered to make Electronic Medical Records (EMRs) more accessible and efficient.

They used their combined skills to develop new technologies like the Intel GE Care Innovations LLC, which enables the connection and management of patients’ health information. FedEx, UPS, and US Postal Services

FedEx, UPS, and the US Postal Service are all companies that use coopetition strategy.

They realized that they could benefit from working together in order to improve their overall service offering. These companies combine their resources to ensure customers get their packages to their destinations on time, no matter the location.


Examples of Coopetition Strategy

Another sector that has embraced coopetition strategy is the ride-sharing industry. Two of the big names in this sector, Uber and Didi, use coopetition strategy to increase their market share and protect themselves from competition.

Uber and Did are companies that compete in the ride-sharing industry. They combine resources like data, customer information, and technology expertise to enhance their business offering.

For instance, in 2015, Didi invested $100mn in Lyft, allowing them to gain access to Lyft’s technology and to benefit from Didi’s global market share. Coopetition allows these companies to better understand their markets, innovate more quickly, and offer better services to their customers.

Conclusion and References on Coopetition Strategy

Benefits and Significance of Coopetition Strategy

Coopetition strategy is significant because it recognizes that companies can gain an advantage by working together rather than going it alone. In a networked economy, enterprises become more interconnected than they were in the past.

In such an environment, it becomes more important to foster cooperative thinking and collaborative partnerships in various industries. Coopetition strategy allows companies to achieve their objectives more efficiently, enhancing their competitive positions and increasing their market share.

By leveraging each other’s strengths, businesses can create new products and expand their reach in the market. For example, by sharing resources like technology and data, businesses can gain a deeper understanding of their markets and customers.

Such partnerships can lead to the development of new technologies and products, fueling growth and innovation in various industries.

References and Resources for Coopetition Strategy

If you’re interested in learning more about coopetition strategy, there are many resources available online that can help. The online library, Diva Portal, is a good resource for academic articles and research on coopetition strategy.

Strategy-business is another great source for case studies of successful coopetition partnerships in various industries. Other resources include consultancy firms that have developed effective models for various industries.

Whether you’re looking for proven methods or innovative strategies, there are resources available to help businesses embrace the potential of coopetition strategy. Coopetition strategy, the concept of companies working together towards a common goal, has gained popularity in recent years as a shift from competition to cooperation in a networked-based economy.

Coopetition offers benefits such as expanding market size, utilizing resources more efficiently, and enhancing a company’s competitive position. Successful examples of coopetition include high-tech companies and the ride-sharing industry.

The significance of coopetition is in its ability to foster cooperative thinking and collaboration, leading to growth and innovation in various industries. Resources such as online libraries and strategy-business provide insights into proven coopetition models that businesses can adopt.

The takeaways are that coopetition strategy can lead to better outcomes and that businesses that partner with competitors can gain significant advantages in today’s fast-paced economy.

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