What is co-opetition?
“Coopetition (also spelled co-opetition) goes beyond competition and cooperation, combining the advantages of both. It develops win-win scenarios in which a business strives to gain more…” The world is moving towards more distributed and collaborative models of doing business and, despite the world’s population expanding, as consciousness rises, more people are viewing the world in terms of abundance versus scarcity. In this new world, evaluating collaborative alternatives in your planning will become more important. Co-opetition and frenemies are becoming commonly used terms – As my partner Brigitte says, in describing the paradoxes in this dualistic world we live in, sometimes it’s “Both And”.
How to create leverage through co-operation?
The Financial Times Lexicon describes co-opetition well. Co-opetition is “simultaneous competition and cooperation between a company and external players such as rivals, government agencies, suppliers, distributors, and partners. Co-opetition goes beyond competition and cooperation, combining the advantages of both. It develops win-win scenarios in which a business strives to gain more, not necessarily by taking market share or profit from a contender, but by creating a bigger market in complementary areas. Companies often work with selected rivals, suppliers, distributors or alliance partners to collectively enhance performance by sharing complementary resources and committing to common goals (such as improving industry standards, research and development, and consumer or market awareness). At the same time, they compete by taking independent action in other areas (such as product quality, market share, sales growth and cost effectiveness).” In general, co-opetition arises from and results in a growing interdependence between businesses as well as increasing demand for strategic flexibility and collective action in certain areas or functions.
This is the case in the arrangement between PSA Peugeot Citroën and Toyota who shared components for a new city car that was simultaneously sold as the Peugeot 107, the Toyota Aygo, and the Citroën C1. The companies save money on shared costs while remaining competitive in other areas. Some challenges have to also be overcome, including distribution of control, equity in risk, resolving competing needs and general trust. Not only is it possible for two companies to interact within a coopetitive environment, but several partnerships among competitors are also possible.
Next time you’re doing a competitive analysis to develop your plans and product roadmap, ensure that you not only consider how you will compete to win but also how you might cooperate to win-win. For each of your competitors brainstorm a list of how you might work together, for example to create or capture new markets or capture more market share jointly. For each potential frenemy develop a list of helping factors and hindering factors that can affect a collaborative (or more collaborative) relationship. Create a list of criteria and perhaps a weighted scoring system for your team to prioritize the coopetitive ideas for further research and stage gate action planning. Consider using Edward De Bono’s 6 Thinking Frames to ensure that all perspectives are thoughtfully considered (read more on the 6 Thinking Frames method here).
So, if you’re interested in greater business growth, a powerful point of leverage might to expand your view of your business coopetitively as sometimes it’s better and easier to increase the size of the pie together than to fight over the pieces.
by Rob Pilz, Copyright 2014 Revelation Business Solutions Ltd.
Improving Decision Making Using Edward DeBono’s 6 Thinking Frames, Article by Rob Pilz
Wikipedia on co-opetition
Co-opetition, a slide deck by Barry Nalebuff, Yale School of Management, 1996
Co-opetition, a book by Adam M. Brandenburger, Barry J. Nalebuff, 1997
Empathic Civilization – The Race to Global Consciousness in a World in Crisis, by Jeremy Rifkin, describes how human empathy is beginning to extend to all of life in the biosphere, including business life, leveraged by the power of distributed networks and collaboration.
Co-opetition, TEDx video by Berit Oskey