COOPETITION

Definition

Coopetition is a neologism coined to describe cooperative competition.

Coopetition occurs when companies work together for parts of their business where they do not believe they have competitive advantage and where they believe they can share common costs.

Ignores the point that competition and co-operation can co-exist. Examples include the development of Advanced Photo Film, DVD, etc.

Sometimes it may be in the best interests of players not to jump to the next level of dynamic competitive interaction but into co-operative competition - coopetition

This requires figuring out the situation the firm is facing and then looking at the firm’s valuenet

Questions to ask yourself are: Who are the key players?

duopoly game; oligopoly game; etc… What options are open to the players?

pricing game; advertising game; etc. What goals are the players pursuing

market share? profits?.. Are goals complementary or conflicting?

issues the players agree on, sources of conflict, etc.. What is the time structure of the game?

one shot, repeated, simultaneous, sequential, etc.. What is the information structure of the game?

information as a source of bargaining strength

The ValueNet

Customers

Company

Suppliers

ComplementorsSubstitutors

Cars Auto loans, insurance, roads

Televisions VCRs

TV shows TV guide

Fax machines Phone lines

Catalogs Delivery services

Hardware Software

THE SUPPLY SIDE

Competitive threat or complementary opportunity?

» Movie theaters & video rentals

» Traditional & Internet booksellers (BookZone)

It is Trade Off /Finding the middle path…

For co-opetition to work, companies need to very clearly define where they are working together, and where they are competing.

When restaurants work together, they can create a much larger and more valuable market that they ever could by working individually.

Restaurants can then compete with each other to determine who takes the largest share of the increased number of potential customers.

When there is section of a city or town that has several restaurants concentrated in a relatively small area. 

Why should anybody open a restaurant in an area already full of restaurants?

Abundance of places to eat attracts customers , make their decision when they arrive.

This is where the competition starts….

THANK YOU!!