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Co-opetition is a term that refers to a business strategy whereby competitors in the same business simultaneously engage in competition and cooperation with the aim of gaining more business advantage. The main context behind this form of the business alliance is that businesses are likely to benefit a lot when they work together than when they operate independently. Those who engage in this tactic often believe that the concept will enable them to expand the market and establish new business relationships and interactions. Businesses have always established mutual relationships between competition and cooperation for business advantages. This is an indication that the concept of co-opetition has been in use long before the term was finally formalized. According to Nalebuff and Brandenburger (1996, p. 54), co-opetition was first developed in work carried out within the game theory where it was realized that, through cooperation, competing businesses could bear a ‘win-win’ scenario. Nowadays, the concept has increasingly become a necessity for modern-day businesses owing to its outstanding benefits.
Co-opetition has been viewed by many as a perfect route for new competitors in any business to gain market access. Many business alliances have been witnessed in today’s business scenario, especially in the industry of computers and technology where the strategy is implemented to add value to products and services (Walley 2007, P. 28). For instance, the concept has been witnessed between manufacturers and retailers who are eager to fulfil the consumer interests at a lower cost and in a better style. One good example where the concept has successfully worked out can be seen between Philips and Sony, who have always collaborated to develop supply components and optical media standards despite them been competitors in business. Another example can be seen in the cellular telephone market, where manufacturers of handset and communication service providers work hand-in-hand to offer complete products and services to consumers. Through this strategic concept, a mutual collaboration of sellers and buyers is likely to sprout where more value is established, something that would be difficult to achieve had these companies continued to compete with each other independently (Gummesson 1997, p. 19).
Co-opetition offers many benefits to both firms and consumers. The concept is a new way of doing business whereby sharing of resources is enabled, unlike in the way of competition where duplication of resources is the norm of business. The strategy helps in establishing good relationships between firms and customers, as the firms jointly work together in developing quality products and services to their consumers. Another benefit of the strategy is that it helps firms to gain a competitive business advantage over strong competitors. According to Ganguli (2007, p. 8), firms that have formed business alliances would be better placed to outdo strong competitors in the same line who operate solely. More importantly, the concept of co-opetition promotes organizational enlightenment, thus contributing enormously to improved productivity and performance. Firms who participate in this concept have a great opportunity to learn from their partners and acquire valuable business skills as they protect their independent position in the market (Cruz 2006, p. 883). This collaboration paves the way to fast access to the knowledge, thus enhancing credibility and competitiveness in business. With these observations, it can be concluded that the role of co-opetition in today’s world of business can never be underestimated. A concept is a crucial approach for those firms that want to make a difference in the competitive world of business.
Reference List
Brandenburger, A & Nalebuff B 1995, ‘The right game: use gametheory to shape strategy’. Harvard Business Review, July-August, p. 57-71.
Cruz, L 2006, ‘Towards sustainable development strategies’. Management, vol. 44 no. 7, pp. 871-891.
Ganguli, S 2007, ‘Coopetition models in the context of modern business’. ICFAI Journal of Marketing Management, vol. 6 no. 4, pp. 6-16.
Gummesson, E 1997, ‘Collaborate or Compete’, Marketing Management, vol. 6 no. 3, pp. 17-20.
Walley, Keith 2007, ‘Coopetion’. International Studies of Management and Organization, vol. 37 no. 2, pp. 11-31.
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