Joining forces to create more wealth while remaining in competition: this is the paradox raised by the concept of coopetition. From heavy industry to technology companies to aircraft manufacturers, this strategy is praised by all. An overview of its strengths and weaknesses.
A POSITIVE-SUM GAME
A neologism coined by the founder of Novell in 1996, coopetition refers to ” a system of players who interact on the basis of a partial congruence of interests and objectives” (Dagnino, Le Roy, Yami), simultaneously combining competitive positioning with cooperative relationships. Although these phenomena have existed for a long time, they have multiplied since the advent of new technologies and globalization. The alliance between Sony and Samsung led to the emergence of LCD technology, while that between Airbus and Thalès enabled them to catch up with Boeing.
Paradoxical at first glance, coopetition is based on a positive-sum game that increases the size of the cake for everyone. Pooling financial and human resources enables us to develop breakthrough innovations rapidly and at lower cost, giving us a head start over competitors from other countries/continents. Beyond innovation, the pooling of resources has enabled many companies to reduce their logistics costs. By pooling talents and skills, we can also find solutions to problems that were previously impossible to solve. For all these reasons, customers have a strong demand for this type of relationship.
Embarking on the path of coopetition can be beneficial, as long as the process is properly managed. Both companies need to be clear from the outset about governance bodies, information sharing and intellectual property rules. Compartmentalizing activities, through dedicated cells or legal structures, is a prerequisite for any company wishing to keep its information secret. Building a relationship based on trust and honesty is another. It is then up to companies to develop their comparative advantages to increase their share of the pie.
A REPLICABLE STRATEGY
Co-operation is not exclusive to innovative companies. Although they don’t bear the name, regulated professions have long been developing this type of strategy. Referring a colleague and building multi-disciplinary teams are common practices in the field of coopetition. Internationally, it is common practice for law and accounting firms operating in the same sector to enter into partnerships to share knowledge and support their joint clients.
With the advent of Legal Tech, “traditional” coopetition is set to evolve. Customers expect their advisors to provide a 360° offer, combining expertise and innovation. On this last point, Legal Tech has a clear comparative advantage. Creating your own digital offering is a costly process for firms: it’s better to join forces with existing structures and build an offering that responds immediately to customer needs. So, what are you waiting for?
See : Gide X Regimbeau
Further information
Coopetition strategies
Co-opetition, Adam Brandenburger and Barry Nalebuff, 1996
Stratégies de coopétition, rivaliser et coopérer simultanément, Frédéric Leroy and Saïd Yami, 2010
