Coopetition Strategy Research Articles

The effects of coopetition on the innovation activities and firm performance

PurposeThe purpose of this paper involves evaluating the impact of coopetition on the innovation activities and innovation performance of companies.Design/methodology/approachThe study deployed data from the Community Innovation Survey – CIS 2012 and subject to the application of different multivariate statistical analysis processes.FindingsThe authors furthermore conclude that coopetition and the transfer of knowledge to and from competitors generates a statistically significant positive impact on company innovation-related activities and performance.Originality/valueThis work enriches the theory of innovation from the perspectives of game-theoretic strategic and resource theory approach. Moreover, the findings provide several recommendations for managers to effectively conduct firm’s coopetition strategy on innovation performance.

The effect of cybercrime on open innovation policies in technology firms

PurposeOpen innovation is important for technology firms as they can use freely available resources to source creative and innovative ideas. Despite the usefulness of open innovation for technological advancements, few studies have focused on the role of cybercrime in affecting an organizations strategic direction. The purpose of this paper is to examine the effect of open innovation on cybercrime in technology firms.Design/methodology/approachSemi-structured in-depth interviews were conducted on technology firms to understand the role of open innovation in terms of technology scouting, horizontal collaboration and vertical collaboration on cybercrime activity.FindingsThe study found that there is a dilemma most technology firm’s face in having an open innovation strategy and how to manage cybercrime. This means that a coopetition strategy is utilized that helps to not only balance the need to have open innovation but also protect intellectual property.Research limitations/implicationsThe study has implications for emerging technology innovations that not only need to have cyber security but also harness the use of Big Data.Practical implicationsManagers of technology firms need to encourage open innovation as a strategy but manage the cybercrime that comes from sharing too much information in an online context.Originality/valueThis paper is one of the first to link open innovation strategy to cybercrime activity in technology firms. Thus, it contributes to the literature on open innovation and cyber theft and security.

Allocating Marketing Resources Over Social Networks: A Long-Term Analysis

In this letter, we consider a network of consumers who are under the combined influence of their neighbors and external influencing entities (the marketers). The consumers' opinion follows a hybrid dynamics whose opinion jumps are due to the marketing campaigns. By using the relevant static game model proposed in previous works, we prove that although the marketers are in competition and therefore create tension in the network, the network reaches a consensus. Exploiting this key result, we propose a coopetition marketing strategy which combines the one-shot Nash equilibrium actions and a policy of no advertising. Under reasonable sufficient conditions, it is proved that the proposed coopetition strategy profile Pareto-dominates the one-shot Nash equilibrium strategy. This is a very encouraging result to tackle the much more challenging problem of designing Pareto-optimal and equilibrium strategies for the considered dynamical marketing game.

Coopetition as an Emerging Trend in Research: Perspectives for Safety & Security

The study of coopetition has been evolving with rapid growth in the number of academic publications in this field. A number of literature reviews have been published focusing on nature, antecedents of coopetition and future perspectives of its implementation. Coopetition is proved to be beneficial for joint investments and Research and development (R&D) projects, and yet competitive games take place in the global markets that may lead to safety hazards. There are few studies that investigate possible perspectives of coopetition strategy for solutions in safety and security, and therefore considering the global tendencies objective, necessity arises for a more detailed study of it. The analysis begins by identifying over 600 published studies where the terms “coopetition”, “safety”, “security” were used. Using rigorous bibliometric tools, established and emergent research clusters were identified, as well as the most influential studies, the most contributing authors and topical areas for further investigations. The systematic combination of quantitative and qualitative analytical tools helps to identify the potential directions for future research. By combining bibliometric analysis and content analysis, the main perspective areas for coopetition implementation towards safety and security were identified.

Horizontal Versus Vertical Coopetition: The Tunisian Manufacturing Industry

By opting for coopetition strategy, some companies prefer the horizontal one while others opt for the vertical. Furthermore, some coopetitions are rather aggressive, while others are rather cooperative. Nevertheless, the reasons for using one or the other of these strategies remain still ambiguous.
 This article aims to explain the reasons, both internal and external, for the use of each type of coopetition and its nature. By adopting a quantitative hypothetico-deductive approach, and through a sample of Tunisian industrial companies, this study confirms that the need for strategic capabilities holds the strongest weight that the competitive intensity in the explanation of the coopetition type and its nature.

Horizontal capacity sharing between asymmetric competitors

A common practice to address supply-demand mismatch is capacity sharing, whereby a firm possessing excessive capacity collaborates with its rival that is incapable of meeting captured demand. However, previous studies have seldom focused on the role of capacity sharing in shaping market competition. In this paper, we investigate coopetition strategies under two widely used contracting mechanisms of capacity sharing, namely, the linear transfer payment contracting mechanism and the revenue sharing contracting mechanism. In a model of two competitors with asymmetric capacities, we find that the larger firm becomes less aggressive in market competition and benefits more from capacity sharing. Competition between the firms will be softened by capacity sharing. Moreover, competition intensity is more likely to be higher under the linear transfer payment contracting mechanism than under the revenue sharing contracting mechanism, while it may be lower if the total capacities are slightly larger than the aggregate demand.

Coopetitive solutions of environmental agreements for the global economy after COP21 in Paris

The decision of the 45th US president on June 1, 2017, to withdraw the United States of America from the COP21 Paris agreement caused a deep change in the environmental scenarios of the global economy, which risks moving away from the virtuous path of a green economy. The major conclusion of our model is to prove the existence of infinitely many economic scenarios in which a strong commitment towards the global green economy will allow gains for each country participating in a green deal project and guarantee significant advantages with respect to a non green undesirable scenario. For this purpose, we propose a dynamical duopoly-type model–for a generic type of green (i.e. low Greenhouse Gas (GHG) emissions) technology good–based on coopetition. In our game model, we suggest coopetitive strategy profiles as solutions for a continuum of possible global economic interactions after the Paris agreement on climate change, given the 45th US president's decision to abandon the agreement itself. More specifically, we construct a game theory coopetitive model with two macro actors for our duopoly game–the United States and the group of countries that still hold to the COP21 global agreement on climate change. Our multidimensional coopetitive model naturally shows a continuum of possible global economic games–within COP21–based on cooperative paradigms and strategy designs, in order to improve the efficiency and strength of the policies enforced by the countries and in order to mitigate climate change and build a truly green global economy. Our approach shows how the actors of the game can expand the pie of their possible gains and to share those gains fairly. A limitation of our analysis concerns the chosen deterministic nature of the parameter expressing the degree of accession to COP21 agreement. A probabilistic approach would be more suitable, and this could constitute a development of plans for future research. Another limitation consists in assuming the total COP21 goal fulfillment of the countries accepting the COP21 agreement. In both cases our model could be easily generalized to overcome these drawbacks.

Dynamic Coopetition Strategies: Why and How to Cooperate with Competitors?

Dynamic Coopetition Strategies: Why and How to Cooperate with Competitors?

Effect of Coopetitive Activity on Innovation and Management Performances in the Structural Context

This study intends to demonstrate whether firms’ cooperative activities, particularly ‘coopetition’, affect business performances. Coopetition, which is cooperation with competitors, is a strategic concept that suggests competition and cooperation between firms can exist simultaneously. More specifically, in order to investigate cooperation as a part of innovation mechanism, this study analysed the mediating effects of product and process innovation performances in between cooperative activities and management performances. For this purpose, we applied a structural equation model (SEM) by integrating a regression model and a logistic regression model. The former analysed the effects of cooperation and innovation on management performances, whereas the latter studied influence of cooperation on innovation performances. For empirical analysis, we utilised data from Korea Innovation Survey (KIS), which incorporates information on Korean firm’s innovation activities and their relevant performances. The results from this study can be applied to addressing and diagnosing issues in Korean industries by analysing relationships among cooperative activities, innovation outcomes and management performances in the structural context.The analysis showed that coopetition, compared to other types of cooperation, has enhanced the performance of process innovation. Furthermore, the analysis demonstrated that cooperation related positively to management performances. This study, however, also addresses the problem that Korean firms have limitations in linking these innovation performances to actual management performances of financial growth. The results highlight the significance of strategic openness and flexibility, even to competitors, as the business environment and technology market may change drastically. Coopetition strategy can work as a facilitator in providing windows of opportunity for sustainable growth through field-based innovation.

Coopetition and innovation. Lessons from worker cooperatives in the Spanish machine tool industry

PurposeThis paper aims to investigate how the implementation of the inter-cooperation principle among Spanish machine-tool cooperatives helps them to coopete–collaborate with competitors, in their innovation and internationalization processes and achieve collaborative advantages.Design/methodology/approachThe paper uses a multi-case approach based on interviews with 15 CEOs and research and development (R&D) managers, representing 14 Spanish machine tool firms and institutions. Eight of these organizations are worker-cooperatives.FindingsWorker-cooperatives achieve advantages on innovation and internationalization via inter-cooperation (shared R&D units, joint sales offices, joint after-sale services, knowledge exchange and relocation of key R&D technicians and managers). Several mutual bonds and ties among cooperatives help to overcome the risk of opportunistic behaviour and knowledge leakage associated to coopetition. The obtained results give some clues explaining to what extent and under which conditions coopetitive strategies of cooperatives are transferable to other types of ownership arrangements across sectors.Practical implicationsFirms seeking cooperation with competitors in their R&D and internationalization processes can learn from the coopetitive arrangements analyzed in the paper.Social implicationsFindings can be valuable for sectoral associations and public bodies trying to promote coopetition and alliances between competitors as a means to benefit from collaborative advantages.Originality/valueFocussing on an “ideal type” of co-operation–cooperative organizations – and having access to primary sources, the paper shows to what extent (and how) strong coopetitive structures and processes foster innovation and internationalization.

Production Coopetition Strategies for Competing Manufacturers that Produce Partially Substitutable Products

This study examines the strategic choices of two rival manufacturers between competition and coopetition. A complex relationship exists between these two firms, who manufacture substitutive products. In addition, each of these firms has an option to purchase (or sell) a key component from (or to) the other. We develop a benchmark competition model and two coopetition models in which the manufacturers compete for end‐customer demand while simultaneously collaborating on component production through wholesaling (wholesaling coopetition) or licensing (license coopetition). By comparing the equilibria of the competition model and two coopetition models, we find that the optimal strategy for coopetition is determined by not only the degree of product substitution but also the inter–firm power relationship in the negotiation of a cooperation contract (i.e., wholesale price and license fees) and the difference in production efficiency between the two manufacturers. Our research comprehensively examines how the external, relationship‐specific, and internal factors affect firms’ optimal strategy selection and suggests a broad set of decision outcomes. Our study provides important managerial implications that can be utilized as strategic guidance for firms to pursue coopetition in various business environments.

Coopetition Strategy and Pricing Timing in an Outsourcing Supply Chain With Uncertain Operation Risks

At present, an increasing number of original equipment manufacturers (OEMs) often outsource their product manufacturing to original design manufacturers (ODMs) that also produce their own-brand products and then become powerful competitors of the OEMs. Following this, our work explores whether two such direct competitors should still cooperate in their original contract manufacturing and how coopetition decisions affect their preferred pricing timing when they enter the downstream product market. We establish a multistage model including an OEM and its competitive ODM and derive some managerial insights. First, we find that the OEM and the competitive ODM prefer to cooperate in contract manufacturing as the OEM is more risk loving, the competitive ODM is more risk averse and the wholesale price is relatively small. Second, we illustrate that the two parties are more likely to achieve an agreement on cooperation in the ODM-pricing-early game relative to the two other games. Third, we show that when the OEM is sufficiently risk averse, the two parties’ preferences for pricing timing remain the same regardless of whether they cooperate in contract manufacturing. However, once the OEM becomes risk loving, it will be less willing to move later as the wholesale price increases, which is different from classical Bertrand competition.

Collaborative mechanism of project profit allotment in petroleum engineering service chain with customized integration

The framework of implementing oilfield project is viewed as an engineering service chain consisting of serial different links supplied by multiple service providers in their specialized technical fields. It is the challenge for an oilfield project proprietor to ensure the consistency of accountability for quality performance of engineering services and acceptance of time limit for the project. This paper, from the view of general contractor as a group company, focuses on the tradeoff analysis of two different business strategies that are independent integration strategy and customized integration strategy, in which the factors affecting their comparative advantages are studied. The mechanism of how to distribute project profits between members of the engineering service chain is investigated. Our findings show that the optimal solution presents win-win profit distribution through the negotiation of outsourcing prices between the general contractor and multiple service providers (subcontractors) under coopetition strategy which characterizes the development trend of petroleum industry.

Marketing madness or financial folly?

PurposeThe purpose of this paper is to explore the implementation of equity crowdfunding (ECF) within the record industry in terms of challenges and opportunities, in addition to the marketing and financial implications for independent music artists and major record labels.Design/methodology/approachThis study adopted a qualitative methodology consisting of two-stage interview-based research methods. A total of 44 semi-structured in-depth interviews were conducted with the CEOs of ECF platforms in the record industry, other related record industry informants, independent artist managers and senior executives from major record labels.FindingsThe loyalty aspect of ECF may have significant marketing potential in terms of inconspicuously using the equity platform as a “prosumer” identification mechanism. As this early career stage of artists is delicate in terms of establishing trust and patronage from their fans, these early marketing and ECF ventures should be implemented directly from the artist without external third-party involvement.Research limitations/implicationsThe implications of this paper’s findings and theoretical model are not limited to the two studied stakeholder groups of the record industry. The insights in relation to the obstinate lack of understanding and clarity (particularly for independent artists) which surround ECF are likely to influence short-term strategic approaches by other players throughout the wider music industry.Practical implicationsThe insights regarding negative approaches towards ECF by the labels may influence future “coopetition strategies” for independent labels, as they seek to navigate the changing industry dynamics.Originality/valueThis paper is the first study to empirically explore the predominantly under-researched area of ECF implementation in the record industry in terms of marketing and financial consequences for artists and labels.

Configurations of firm-level value capture in coopetition

The dualism of collaboration and competition in coopetition arrangements is an enabler but also, a limitation to firm-level value capture. With the assumption that firms may have different alignments for value capture, we employ a configurational approach. A fuzzy-set qualitative comparative analysis (fsQCA), based on a sample of 222 small and medium-sized enterprises (SMEs), finds configurations of consistently high and low firm-level value capture. In their pursuit of an above-average value capture, SMEs can focus on value creation in the innovation or the market domain. Commonalities related to market overlap are a necessary condition for high value capture in coopetitive arrangements. A formal coopetition strategy and past coopetition experiences underlie dissimilar configurations concerning SMEs’ age and size. Formal coopetition strategy also triggers value capture only for mature SMEs. Instead, small SMEs can achieve high value capture in leveraging their coopetition experiences. However, solely relying on coopetition experiences without establishing a coopetition strategy characterizes most dysfunctional value capture configurations of SMEs.

Coping with coopetition—Facing dilemmas in cooperation for sustainable development: The case of the Dutch smart grid industry

AbstractThis paper is amongst the first to examine coopetition strategy for sustainable development at the network level. Companies who want to successfully implement complex innovative technologies that support sustainable development need to collaborate with other actors of the innovation ecosystem, including their competitors, so that they can develop standards, interoperable products, pool knowledge, and resources and bundle forces to compete against other technologies. Collaboration with competitors brings benefits, but also many risks. We investigated how firms cope with these risks when establishing an innovation ecosystem to implement a new technology in society. We conducted research in the Dutch smart grids sector and explored how these firms minimize inherent risks of coopetition. We found that system‐building actors in the Dutch smart grid field not only minimize inherent risks, but from the start of their collaboration they implement so‐called enablers to prevent these risks upfront.

Regional strategic networks in southern Brazil

Regional strategic networks (RSNs) are long-term purposeful arrangements among firms that cooperate and compete in a regional context allowing them to win or sustain a competitive advantage. RSN coopetitive strategy requires an open approach with inclusiveness of members and internal transparency of the formulation and implementation processes. This open approach of a coopetitive strategy raises questions concerning the outcomes of RSNs. How does strategic openness affect the outcome of RSNs? What are the outcomes of an open strategy formulation and open strategy implementation? This paper focuses on the effects of greater strategy openness on the outcomes of RSNs. To achieve this goal, the study follows a quantitative exploratory survey based on 150 firms associated to 50 RSNs established by a regional public policy in southern Brazil. The unit of analysis of this study are the RSN. Results indicate that an open approach supports the RSNs' coopetitive strategy and ultimately affects their collective outcomes. Results also show a significant relationship between the member inclusion and internal transparency of the strategy process and the networks' outcomes.

THE PROCESS OF COOPETITIVE STRATEGY: A CASE STUDY OF MICROBREWERIES IN PORTO ALEGRE

ABSTRACT Purpose: The study presents a dynamic and complex procedural experience performed by small microbreweries in a cluster in Porto Alegre, Brazil. Thus, this article aims to establish theoretical propositions about coopetition strategies in this context. Originality/value: One of the gaps in the organizational studies is an understanding of how the process of developing a new strategic dynamic takes place. We consider coopetition to be a process that involves narrow strategies of simultaneous coopetition and cooperation between competing firms, in different areas and levels of interaction. Design/methodology/approach: Qualitative, exploratory research was conducted, using data triangulation and multiple methods. The case study technique was adopted to perform an in-depth examination of the phenomenon of secondary data collection, participant observations, and semi-structured interviews. Findings: The results showed that microbreweries are developing a strategic process of coopetition through greater sharing of resources, information, interactions, learning, and inter-organizational and intra-organizational knowledge, essentially in the stages of distribution and sales. The reports and evidence of the research showed synergy between the mechanisms and common goals found, thus demonstrating the dynamic of these small businesses.

Co-opetition Strategy in Volunteer Computing: The Example of Collaboration Online in BOINC.RU Community

Volunteer computing (VC) is a strong way to harness distributed computing resources to perform large-scale scientific tasks. Its success directly depends on the number of participants, PC (some other devices) and time of their work. And while the computational aspect received much effective research attention and solutions; the social problem of VC phenomenon – how persuade the owners of widely dispersed smart machines and devices to participate in VC projects, and how figure out ways to speed and expand the capability of donated computer resources, remains largely unexplored. We think that a motive of self-actualization of participants of volunteer computing is not enough to explain why millions of unskilled people day by day participate in scientific computation. Our research indicates that the answer lies at the intersection of self-oriented motivation and the interactional, organizational possibilities emerging through the Internet. In this paper we investigate Russian community of VC and discuss the suggestion that online collaboration can capture people`s motivation better than only intrinsic motives.

Managing coopetition: implement knowledge transparency between competitors

Being highly knowledge transparent with a competitor seems to be a fallacy. Indeed, it is an invitation to opportunism and to a deskill process by the competitor. The traditional intent of any firm is to reduce its knowledge transparency. However, we argue that being highly transparent is a condition for unlocking the radical innovation opportunities of a coopetition strategy (i.e., collaboration between competing firms). Our research goes beyond this inherent contradiction and reveals how firms could preserve their knowledge transparency in a coopetitive relationship. Answering this question is key to understanding how to unlock the radical innovation opportunities of coopetition strategy. Our case study of Sanofi, a pharmaceutical company which opened two of its radical innovation to its competitor, confirms and extends the key role of the co- management principle. Moreover, our research represents interesting guidelines for top managers by highlighting a specific project design to manage transparency in a coopetitive project.