Co-opetition – Why Work With Competitors?


We’ve all been taught to be competitive in business, and competitiveness is at the heart of what we value in business.  But there are times when businesses must cooperate with competitors – leading to the phrase, “co-opetition“.  Typical scenarios include:

  1. There is a common competitor that has to be surpassed.  Here companies cooperate to best the common competitor, but compete amongst themselves in other ways, such as service levels, excellence, etc.
  2. A goal cannot be achieved alone, but can in cooperation with others.  This may be where some form of industry standard is needed (e.g. USB), and being proprietary makes no sense.
  3. A competitor has a feature your customers want. Instead of investing directly in that feature, limited cooperation may be best.

Co-opetition requires maturity and a clear sense of purpose, but when executed well, it reaps rewards and achieves higher customer satisfaction.

Two examples…

  • Apple cooperates with Yahoo for content on their phones – both worry about supremacy by Google.
  • Apple cooperates with Samsung on hardware issues – they each have items the other requires.

Please see some links below, including a lengthy academic set of charts that show how co-opetition is really just a form of traditional game theory.

 

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