The first time I heard the term “coopetition” (or “co-opetition”, or “coopertition” if you are from Kentucky) was during a call of a NASCAR race by Hall of Fame driver turned color commentator Darrell Waltrip. In the stock car world coopetition refers to a situation where two cars from opposing teams work together to gain positions on the race track. This most commonly occurs on superspeedways like Daytona and Talladega where two cars working together, or drafting’, can go faster than a car lapping the track by itself. At the time I was amused by the term and thought it was something cute just for television, but when the word came up in class yesterday I thought I’d better take another look. Upon Googling the word I found numerous articles from thesis papers to articles in Forbes. So, if the word is good for the business community, academia, and NASCAR I should devote some analysis and synthesis to it. Since I am employed by a multinational corporation, this journal entry will focus on coopetition amongst global entities rather than stock car racers.
Ray Noorda, the founder of the software company Novell, is given credit from the business community for coining the term ‘coopetition’. With that, I extend my apologies to Darrell Waltrip. Simply put, coopetition is the blend of cooperation and competition among rival firms. Reportedly, large firms such as Bell Atlantic, Merck, and Procter and Gamble to name a few, have all leveraged the benefits of coopetition. In multinational entities (MNEs), coopetition focuses on an interaction “between two or more geographically dispersed subunits”. Truthfully, the elements of cooperation and competition have always co-existed as entities have struggled to attain the limited resources needed to succeed. In collaboration, MNEs share knowledge while still maintaining their individual competitive advantage. MNEs compete on the basis of resource and market expansion. They cooperate on the basis of technological, operational, organizational, and financial acumen. Finding the proper blend will allow all parties involved to expand their economies of scope.
As one can imagine, there are a number of hurdles that come when “cats and dogs” try to play together. One significant hurdle to coopetition amongst MNEs is navigating the complex political landscapes that exist within each of the entities arenas of operation. In this context, political hurdles can arise from governmental, societal, or economical issues. These hurdles force business executives and managers to intimately educate themselves on the situation at hand, all the while fostering proper intra-firm rivalries and keeping the firm’s own interests and principles in focus.
Coopetition: Ford wishing GM Happy 100th Birthday!!! source: http://www.scottmonty.com/
In every scenario, the elements of cooperation and competition are neither fixed nor predetermined. Pressure from competition and product similarity will bolster competition and cooperation. In order for the two to work together it is up to the leaders of all parties involved to nourish the proper environment. In the modern business world, coopetition is here to stay. It is a significant element that rolls up into the concept of globalization. It’s a new spin on a series of old ideas. Those who keep their eyes wide open and recognize the opportunities will benefit the most.
Resources:
Brandenberger, Adam and Barry J. Nalebuff. “What is Co-opetition?” (accessed January 22, 2012). http://mayet.som.yale.edu/coopetition/answers.html
Dorrenbacher, Christoph. “Intra-firm Competition in Multinational Corporations: Towards a Political Framework” Manchester, UK, July 2007.
Luo, Yadong. “Toward Coopetition with a Multinational Enterprise: A Perspective From Foreign Subsidiaries” Journal of World Business. (Elsevier: Coral Gables, FL) 2005.
Monty, Scott. “Social Media Encourages Co-opetition” The Social Media Marketing Blog. September 16, 2008 (accessed January 22, 2012) http://www.scottmonty.com/2008/09/social-media-encourages-co-opetition.html
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