Striking the right balance in tension management. The case of coopetition in small- and medium-sized firms

Henrik Virtanen,Soren Kock

doi:10.1108/jbim-10-2021-0469

Henrik Virtanen, Soren Kock

Open Access

https://doi.org/10.1108/jbim-10-2021-0469

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Abstract

Purpose The purpose of this study is to elaborate on the management, sources, levels of strength and dynamics of inherent tension in coopetition between small- and medium-sized firms (SMEs). Design/methodology/approach An embedded single-case design is applied in the study. Two manufacturing SMEs in coopetition are studied. The units of analysis are their past dyadic coopetition with other competitors, their present coopetition with each other and their view of possible dyadic coopetition with other partners in the future. Findings This study addresses the call for more research on coopetition and tension dynamics. It gives longitudinal insight into the changes of a coopetitive relationship through the evolution of tension inherently present in the relationship. Furthermore, the results show that a partial separation of the cooperative and competitive dimensions enables entrepreneurs’ integration of a contradictory logic. The successful management of tension also relies on mechanisms for mutual value appropriation, which eventually enhances the ability to embrace contradictions. Originality/value This study contributes to the limited knowledge on tension management by showing how partners in coopetition apply different tension management principles or combinations of principles due to how the tension in the relationship evolves. Furthermore, on a practical level, it introduces a mapping or configuration scheme to identify the sources and levels of strength of inherent tension, enhancing coopetition partners’ ability to monitor their relationship over time.

Highlights

Coopetition is a viable strategy, both for large (Fernandez et al, 2014b; Ritala et al, 2008; Yami and Nemeh, 2014) and small- and medium-sized firms (SMEs) (Bengtsson and Johansson, 2014; Chiambaretto et al, 2020; Tidström, 2014; Virtanen and Kock, 2021)
4.1 Mapping market and product overlap The coopetition between AlfaFur and BetaFox stipulates that AlfaFur manages marketing and sales, and BetaFox manufactures the products, which are jointly initiated, planned and developed within the coopetition framework
6.1 Contribution This article discusses the dark side of coopetition between SMEs

Summary

Introduction

Coopetition is a viable strategy, both for large (Fernandez et al, 2014b; Ritala et al, 2008; Yami and Nemeh, 2014) and small- and medium-sized firms (SMEs) (Bengtsson and Johansson, 2014; Chiambaretto et al, 2020; Tidström, 2014; Virtanen and Kock, 2021). Competitors perform similar activities, manufacture similar products, use the same technology, have the same marketing interest and need similar raw materials. They face many of the same opportunities and challenges (Gnyawali and Charleton, 2018). This creates a natural rationale for coopetition (Bouncken et al, 2015; Park et al, 2014). Owing to their liability of smallness and newness, coopetition is a way for SMEs to create and sustain opportunities in the markets (Bengtsson and Johansson, 2014).

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