Coopetition

Coopetition or co-opetition (sometimes spelled "coopertition" or "co-opertition") is a neologism coined to describe cooperative competition. Coopetition is a portmanteau of cooperation and competition, emphasizing the "petition"-like nature of joint work.

Basic principles of co-opetitive structures have been described in game theory, a scientific field that received more attention with the book Theory of Games and Economic Behavior in 1944 and the works of John Forbes Nash on non-cooperative games.

Coopetition occurs at inter-organizational or intra-organizational levels.

At inter-organisational level, coopetition occurs when companies interact with partial congruence of interests. They cooperate with each other to reach a higher value creation if compared to the value created without interaction and struggle to achieve competitive advantage. Often coopetition takes place when companies that are in the same market work together in the exploration of knowledge and research of new products, at the same time that they compete for market-share of their products and in the exploitation of the knowledge created. In this case, the interactions occur simultaneously and in different levels in the value chain. This is the case of the arrangement between PSA Peugeot Citroën and Toyota to share components for a new city car—simultaneously sold as the Peugeot 107, the Toyota Aygo, and the Citroën C1, where companies save money on shared costs while remaining fiercely competitive in other areas. Several advantages can be foreseen, as cost reductions, resources complementarity and technological transfer. Some difficulties also exist, as distribution of control, equity in risk, complementary needs and trust. It is possible for more than two companies to be involved in coopetition with one another.

At intra-organizational level, coopetition occurs between individuals or functional units within the same organization. Based on game theory ^[1] and social interdependence theories, some studies investigate the presence of simultaneous cooperation and competition among functional units, the antecedents of coopetition, and its impact on knowledge sharing behaviors. For example, the concept of coopetitive knowledge sharing is developed to explain mechanisms through which coopetition influences effective knowledge sharing practices in cross-functional teams.^[2] The underlying argument is that while organizational teams need to cooperate, they are likely to experience tension caused by diverse professional philosophies and competing goals from different cross-functional representatives.^[3]

History of the word

The word coopetition and its variants have been re-coined several times:

• In 1913 by the Sealshipt Oyster System^[4]
• In 1937 by Rockwell D. Hunt^[5]
• Around 1975 by Doug Chamberlin in a class at Adrian College, responding to an instructor's request for an appropriate new word with which to refer to "conflict over how to divide up the benefits produced by cooperation." Incorporated in 1981 college textbook Thinking About Politics: American Government in Associational Perspective (N.Y: D. Van Nostrand, 1981), chapter 9, p. 257. Text is available on-line .
• Around 1992 by Raymond Noorda to characterize Novell's business strategy.^[6][7]
• In 1995, Daniel Ervin, CEO of Phoenix Fire Inc., which is an international business development agency that focuses on building business partner channels for technology companies, started using the word Coopertition to describe the approach of creating a partnership between two or more competing software vendors. This type of partnership enables vendors with nominal overlap in their solution portfolio to quickly gain more market share together than when they are operating apart.^[8]
• In 2000, FIRST Robotics had a competition game titled Co-Opertition FIRST. In 2009, FIRST cofounder Dean Kamen received a patent titled "Method for Creating Coopertition" (spelled as one word, with no hyphen), which involves giving FIRST Robotics teams some points scored by other teams, to encourage cooperation even as they compete.^[9] US FIRST now claims a trademark on the term on its Web site.^[10]
• In the mid-2000s, "coopetition" began to be used by Darrell Waltrip to describe the phenomenon of drivers cooperating at various phases of a race at "high speed" tracks such as Daytona and Talladaga where cooperative aerodynamic drafting is critical to a driver's ability to advance through the field. The ultimate goal for each driver, however, is to use the strategy to win.^[11]
• One of the examples of coopetition in practice in high technology context is the collaborative joint venture formed by Samsung Electronics and Sony formed in 2004 for the development and manufacturing of flat-screen LCD Panels.^[12] Coopetition is becoming more critical in high technology contexts because of several challenges such as shrinking product life cycles, need for heavy investments in research and development, convergence of multiple technologies, and importance of technological standards. While it is quite challenging to engage in coopetition (or cooperate with a competitor), coopetition engagements are helpful for firms to address major technological challenges, to create benefits for partnering firms, and to advance technological innovations that benefit the firms, the industry, and consumers.
• In 2009, the importance of coopetition was emphasized for Small and Medium-Sized Enterprises (SMEs). As technological battles intensify and technologies become more complex, SMEs face numerous challenges such as rising R&D costs, high risk and uncertainty in technological development, and lack of resources to pursue large-scale innovation projects.^[13] SMEs can more effectively deal with these problems if they work together by combining their own resources and expertise and develop their collective ability so that they can compete effectively with large firms and advance technologies they may not be able to advance alone.
• In 2012 and 2013, the concept of 'Coopetitive Knowledge Sharing' was inspired by inter-organization research literature toward developing a Coopetitive Model of Knowledge Sharing that explains (1) how coopetition should be conceptualized,^[14] (2) What forms coopetition (three formative constructs of outcome (goal, reward), means (task related), boundary (friendship, geographical closeness, sense of team belonging) interdependencies),^[15] and (3) How coopetition and its interrelated components interact and influence knowledge sharing behaviors in cross-functional software teams. This series of publications in the Journal of Systems and Software and Information Processing & Management conceptualize and operationalize the multi-dimensional construct of cross-functional coopetition and presents an instrument for measuring this construct. Cross-functional coopetition is conceptualized with five distinct and independent constructs, three of them are related to cross-functional cooperation (task orientation, communication, interpersonal relationships), and two are associated with cross-functional competition (tangible resources and intangible resources).
• In 2013 Compassion Games International, an activity of the Charter for Compassion, used "coopetition" to describe their annual games between cities about who can commit the most acts of kindness and compassion.^[16]
• In 2014 the Caring Citizens' Congress, an Empathy Surplus Project, used "coopetition" to describe how to create "compassion primaries," where candidates for party office try to find allies in the other parties to cooperate around advancing freedom, compassion and human rights as governing principles.^[17]

See also

• Competitive altruism
• Frenemy
• Cartels are not an example of coopetition because their goal is to limit competition, and the goal of coopetition is to take advantage of the complementary resources of the firms in order to reach lower costs and manage new innovation possibilities, still regarding competition in a further moment.
• Negarchy
• Co-Opertition FIRST
• Philosophy of FIRST

Notes

References

• Brandenburger, Adam, and Nalebuff, Barry (1996). Co-Opetition: A Revolution Mindset That Combines Competition and Cooperation ISBN 0-385-47950-6
• Bengtsson, M., and Kock, S. (2000). Coopetition in Business Networks: To Cooperate and Compete Simultaneously Industrial Marketing Management, Vol. 29, pp 411–426
• Dagnino, Giovanni Battista, and Padula, Giovanna (2002). Coopetition Strategy: Towards a New Kind of Interfirm Dynamics for Value Creation, EURAM 2nd annual conference, Stockholm School of Entrepreneurship, Sweden 8–10 May.
• Musolino, F (2012). "A Coopetitive Approach to Financial Markets Stabilization and Risk Management, Advances in Computational Intelligence". Communications in Computer and Information Science. 300: 578–592. 
• Musolino, F (2013). "Credit Crunch in the Euro Area: A Coopetitive Solution, in Multicriteria and Multiagent Decision Making with Applications to Economic and Social Sciences". Studies in Fuzziness and Soft Computing. 305: 27–48. 
• Schiliro, D (2012). "A Coopetitive Model for the Green Economy". Economic Modelling. 29 (4): 1215–1219. 
• Gnyawali, D. R.; Park, B.J. (2009). "Co-opetition and Technological Innovation in Small and Medium Enterprises: A Multi-Level Conceptual Model". Journal of Small Business Management. 47 (3): 308–330. doi:10.1111/j.1540-627X.2009.00273.x. 
• Gnyawali, D.R.; Park, B. J. (2011). "Co-opetition between Giants: Drivers and Consequences of Collaboration between Large Competitors". Research Policy. 40 (5): 650–663. doi:10.1016/j.respol.2011.01.009. 

External links

• Strategic co-opetition: The value of relationships in the networked economy, A perspective from IBM
• The website to accompany the book Co-opetition by Adam M Brandenburger and Barry J Nalebuff
• Summary of Co-opetition: A Revolutionary Mindset That Combines Competition and Cooperation by Brandenburger and Nalebuff, 1998.
• Channel Register: The ugly truth about coopetition
• Coopetition in the new economy: Collaboration Among Competitors
• FIRST Values: Coopertition
• 2010 FIRST Robotics Competition:Coopertition Award
• Patent 7,507,169: Method for Creating Coopertition