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:
- 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.
- 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.
- 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.
