Coopetition 1: Would you cooperate with your competitor?

Summary

A few months ago, on a cup of coffee under a humid weather, my friend and I had a discussion about collaborating with competitors. We both agreed that when competition is indirect and there is an added value, such collaboration is the right strategic step. However, we could not have agreed on collaboration with direct competitors. So, I've decided to share this issue with you, the readers, to help in resolving this disagreement.

This post is the first in a series of posts on this subject, and I really hope that it will be interactive with your help. Would you coope(ti)rate with me?

What's Coopetition? - The Roots

The concept seems to have been taken up most extensively in the computer industry, where strategic alliances are common in order to develop new products and markets, particularly between software and hardware firms.

Ray Noorda, the founder of Novell, is regarded as a pioneer of coopetition, both the term and the concept. Noorda was the first to articulate that the many interoperating parts of the computer industry meant that one company needed to cooperate with another to ensure their products worked together.

Imagine the web, computers, hardware, and software, and eventually the social media and user- interfaces, without cooperation between the competing companies in this industry. A total mess and absolutely useless.

As a general rule, cooperation can be beneficial to participating parties when competition is indirect and the parties can provide each other complimentary products (technology, service, etc) with added value. Well, in coopetition the rules of the game are changed: it is a situation of possible cooperation between two or more direct competitors.

Competitive advantage - Such collaborations may not provide the coopetitiors with competitive advantage over each other. However, competitive advantage can be achieved by the organizations outside the alliance.

Why to Coopete (cooperate with competitor)

The only reason is leveraging value for the coopetitors. The value can be long term or short term, it can be quantitative and qualitative, but in the bottom line the coopetitors benefit from such alliance more than if they wouldn’t.

Networked world and economy

We live in a flat world. Networking is the most common and accepted business tool available today, and it is spreading everywhere. Business dynamics have changed. Social media brought these networking tools to our personal lives and the personal “real world”. Try not to coopetite in these circumstances

TO BE CONTINUED...

Photo source: http://articles.sfgate.com/2006-10-23/news/17318303_1_half-marathon-leukemia-lymphoma-society-ocean-beach