Co-opetition: a strategic tool

Abstract

Co-opetition is a business strategy that goes beyond the old rules of competition and cooperation to combine the advantages of both. Co-opetition is a pioneering, high profitmeans of leveraging business relationships. In this report we look at co-opetition in its many forms that is currently prevalent in the industry. We look at the motivations and the guiding factors for these co-opetitive arrangements. We also briefly foray into Game Theory to understand how companies in a co-opetitive arrangement succeed and trust each other. We then look at deriving a framework for analyzing the reasons of when a firm needs to get into co-operating with its competitors. In particular we propose three propositions which provide a starting point of when firms think of co-opetition as a viable strategic alternative. We also look at deriving an index called the Co-opetition Scope Index that indicates the extent to which co-opetition is possible in the industry. We then tie this index to Porter s framework and show that co-opetition is an important moderator in determining the attractiveness of the industry.