The Antecedents of Coopetition Strategy:A Conceptual Framework

Abstract

This research questions the determinants of a coopetition strategy. Why do competing companies commit to a “paradoxical” coopetition relationship? Previous research has sought to understand the mechanisms and determinants that drive companies to adopt “paradoxical” and “complex” relationships of competition and simultaneous cooperation. However, the majority of this research has been able to provide answers on the subject, even if piecemeal, always in specific contexts. This present research allows advancing elements of theoretical answers on this questioning, from a synthetic reading of the literature on coopetition. Companies adopt “paradoxical”, “complex” and “counterintuitive” relationships of both cooperation and competition, defined as coopetition relationships, to cope with the complexity of the economic environment and institutional pressures for sharing resources and skills, and innovating. Finally, the representations, perceptions and affects of individuals in and between companies allow companies to engage in these types of relationships.

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Rabii, B. and Cyrine, B. (2024) The Antecedents of Coopetition Strategy:A Conceptual Framework. Open Journal of Business and Management, 12, 1335-1346. doi: 10.4236/ojbm.2024.122071.

1. Introduction

The race for technology and globalization, the repeated failure of mergers and acquisitions, and the internal unavailability of the necessary resources and skills are factors that drive companies to seek out allies. Often the best allies are paradoxically competitors. It is from this dilemma that the strategies of coopetition are born.

Today, coopetition (simultaneous pursuit of cooperation and competition between opposing partners) is becoming an essential strategy in all globalized industries. This new strategy combines two contradictory logics: competition and cooperation. This combination of complementary interests that cooperate while remaining competitive allows the company to benefit from both the advantages of competition and those of cooperation. Competition drives companies to introduce new productive combinations, innovate and improve their product-service. At the same time, cooperation allows the company to access resources, skills, knowledge and technologies.

This research focuses on the determinants that push opposing partners also qualified as “co-opting partners”, to cooperate and compete at the same time. Our research question is: why do competing companies decide to collaborate and adopt a paradoxical coopetition relationship?

This research attempts to provide theoretical answers to this question. It also presents a synthetic analysis of the literature on the different determinants that may influence the behavior of companies to maintain coopetition strategies. In order to give a clear and obvious answer to this initial questioning, we consider respectively three levels of determinants which are presented as main factors of emergence of the strategies of coopetition between firms: the determinants linked to the industry, the institutional determinants, the organizational determinants and individual determinants.

2. Definition of the Concept of Coopetition

Coopetition (simultaneous pursuit of cooperation and competition between opposing partners) is becoming an essential strategy in all globalized industries. This new strategy combines two contradictory logics: competition and cooperation. This rapprochement of interests between complements who cooperate while remaining competitors allows the company to benefit from both the advantages of competition and those of cooperation. Since the initial formulation of the phenomenon of coopetition by Brandenburger and Nalebuff (1996) the authors have established a direct link between this relational mode and the creation and appropriation of value. Coopetition is considered a beneficial strategic option for all actors involved in a value network. The authors propose a first definition of the concept of coopetition as the relationship of a company with its customers, suppliers, complimentary and competitors. This proposed definition seems relatively broad and imprecise and applies to any relationship of the company with its partners. From this first definition, the key dimensions of the concept of coopetition have not yet been identified.

Later, other definitions were proposed in the field of strategic management, in order to identify and clarify the different key elements of the concept in question. The definition of Bengtsson and Kock (2000) considers coopetition as the “dyadic and paradoxical relationship emerging when two companies cooperate on some activities and are at the same time in competition on other activities” (Bengtsson & Kock, 2000: p. 412) . This definition is considered relatively precise compared to that proposed by Nalebuff and Brandenburger. It highlights some fundamental dimensions that characterize the concept of coopetition. This definition helps to identify the level of interaction of the company (the dyad). However, it allows us to emphasize the paradoxical nature of both cooperative and competitive relations between opposing partners. This definition also distinguishes cooperative activities from competitive activities arising from the relationship. In other words, the cooperative and competitive dimensions of the relationship are divided by activities and not by product or market.

Bengtsson and Kock (2014: p. 182) propose a more global definition of the concept of coopetition. The authors define the concept of coopetition as “a paradoxical relationship between two or more actors involved in vertical or horizontal cooperative and competitive relationships”. The proposed definition allows for emphasis on three dimensions. Key concepts: 1) the paradoxical nature of the relationship, 2) the number of actors involved in the relationship and 3) the multiple forms of the relationship (vertical and horizontal).

In a synthetic way, the three definitions proposed by Brandenburger and Nalebuff (1996) , Bengtsson and Kock (2000) and Bengtsson and Kock (2014) made it possible to advance the first outlines and fundamental elements which revolve around the concept of coopetition in the field of strategic management of organizations. These three definitions are the most cited in the majority of academic works in the field of research on coopetition.

The innovation of this research makes it possible to advance knowledge (thanks to the discoveries it makes); promote its results, that is to say, ensure that they are used for the development of the country: technological development of course but also social development.

3. Characteristics of Coopetition Strategy

Coopetition: simultaneous relationship of cooperation and competition

The concept of coopetition is no longer a new phenomenon but rather a practice already existing for decades. Practices of cooperation between rival firms existed for a long time, but certainly did not say their names.

Coopetition has been introduced in the social sciences since 1973 (Deutsch, 1973) and appeared in the early eighties in professional presses. However, the concept saw its emergence in management sciences in the early eighties and known through the famous work of Brandenburger and Nalebuff (1996) . Since then, academic work on the concept of coopetition has proliferated and has affected the different disciplines in management sciences. Coopetition emerged in finance, marketing, logistics and strategy (Dyer & Singh, 1998; Gulati, 1998; Gnyawali & Madhavan, 2001) .

In such an emerging context, coopetition reflects a relationship that emerges from two different modes of interaction: competition and cooperation. The initial idea two firms can simultaneously cooperate and compete (Bengtsson & Kock, 2000) . In this case a firm may decide to cooperate with one or more other competing firms for the same product. In this situation, the two modes of interaction (cooperation and competition) are not divided between the actors, but rather are divided between activities (Bengtsson & Kock, 2000) .

Coopetition: a paradoxical, complex and counterintuitive mode of interaction

The term “paradox” is defined as an apparent contradiction at the same time, it expresses a situation in which antagonistic and contradictory elements occur at the same time (Cameron & Quinn, 1988) .

In this spirit, strategies of coopetition are born from the principle of their apparent extremes and opposition: cooperation and competition consider themselves as two modes of interaction and are presented as two opposite extremes on a single continuumor two separate continuums (Bengtsson & Kock, 2000) . The coopetition relation is perceived in this case as a complex and paradoxical relationship (Chen, 2008) .

The “complex” and “paradoxical” nature of the phenomenon is born from two opposing logics of interaction: competition and cooperation.

The competitive aspect of the relationship assumes that the players (firms) in an industry or industry are trying to maximize their own interests. This logic is based essentially on the principle stemming from the neo-classical economic theories. Conversely, the cooperative aspect of the relationship implies that the partner actors work together to achieve a common collective goal. This logic is inspired to a large extent by works from the sociology of organizations.

Between these two logics of opposing interactions (competition and cooperation) which are based on two different theoretical currents (the neo-classical economic theories for competition and the sociological theories of organizations for cooperation) emerges the “paradoxical” nature (Chen, 2008) of coopetition.

Coopetition a strategy source of value creation

Since the initial formulation of the coopetition phenomenon by Brandenburger and Nalebuff (1996) , the authors establish a direct link between this relational mode and the creation and appropriation of value. Coopetition is considered as a strategic option that benefits all stakeholders involved in a value network. For its part, Bengtsson and Kock (2000) consider the cooperation between rival firms as the most advantageous relationship mode for all actors. In fact, the cooperating actors simultaneously benefit from the advantages of both competition and cooperation. According to the authors, competition stimulates competing actors to develop new products and develop innovation. In the same way, cooperation allows competing partners to exchange resources and skills through strong links (Granovetter, 1973) .

In this perspective, empirical studies have established between coopetition and the performance of firms (Morris et al., 2007) , the use of resources (Mariani, 2007) , the growth and development of the banking industry (Czakon, 2007) , the performance of Finnish mobile TV companies (Ritala, 2012) .

Although these studies consider that the adoption of this relational mode provokes considerable advantages for the firm (individual scale), other researchers have been able to show that this relational mode is largely advantageous for all the actors involved (collective scale) in a coopetitive relationship.

To this end, Czakon et al. (2016) has shown that the more firms enter into coopetition relationships the more likely they are to generate collective benefits.

Coopetition: a risky strategy and source of tension

Coopetition is defined as the simultaneous pursuit of cooperation and competition between firms (Fernandez et al., 2014, 2018) .

Several researchers believe that coopetion strategy are the best strategic choices to allow the firms to create value for all the partners involved and guarantee the performance of the firms. However, many other researchers continue to view this type of strategy as the most risky and stressful modes of interaction between partners.

By their very nature, coopetition strategies involve conflicting, antagonistic, and opposing modes of interaction and coopetitive tensions arise from the combination of these two opposing modes of interaction between opposing partners, which are the competition and cooperation.

The coopetitive tensions are multidimensional and different sources of tension appear at each level: The inter-organizational level, the intra-organizational level and the inter-individual level (Fernandez et al., 2014) .

The study by Fernandez et al. (2014) has highlighted different sources of coopetitive tensions at three levels: inter-organizational, intra-organizational and inter-individual.

4. The Determinants of a Coopetition Strategy

4.1. Determinants at the Industry Level

The rapid political, economic, social and technological developments and the ever-changing environment that characterizes today’s world are considered as the main factors likely to influence the choices and strategic orientations of firms.

Depending on the economic and institutional context, the nature and structure of the industry or market, companies will decide whether or not to adopt coopetition strategies.

In order to understand the motivations and mechanisms that drive companies to adopt or not to adopt industry-wide coopetition strategies, we consider successively three types of influencing factors inherent to the industry in which the firms operate actors: the economic context, the institutional framework, the nature of the industry and the structure of the industry.

4.2. The Economic Context

The increased evolution of the economic and social environment and simultaneously the race for technology and globalization by firms favors the phenomenon of hyper-competition (D’Aveni, 1995) . A highly dynamic and complex economic environment, a higher competitive intensity among actors and a high degree of uncertainty characterize the current world.

In response to this context, companies look for relational opportunities: the survival of firms depends largely on their ability to maintain and maintain relational capacities (Bonel & Rocco, 2007) , by developing strategic collaborations in the form of alliances or partnerships. The ultimate goal is also to combine the strategic capabilities of actors to cope with similar environmental constraints and challenges. In this spirit, the exposure of two or more competing actors to the same external constraints is the main factor pushing competing firms to cooperate together (Tether, 2002) .

Cooperating with rivals is also considered a fundamental element in fighting a third party in the industry or market (Bengtsson & Kock, 2000) or at the same time surviving in a period of economic decline (Tidstrom & Ahman, 2006) .

4.3. The Institutional Context

The adoption of coopetition strategies is a strategic choice resulting from the compliance of actors with the norms, values and beliefs of the industry to which they belong. To this end, the players must align themselves with the requirements of the industry, the market or even a sector of activity to guarantee in a certain way its legitimacy (Luo, 2004) .

The neo-institutional theory attempts to understand and explain the emergence of cooperative relations between rival firms. According to the perspective of the neo-institutional theory, there is indeed a phenomenon of homogenization found in and between organizations (Di Maggio & Powell, 1983) , this phenomenon is due to the “isomorphic” pressures exerted by the institutions (Di Maggio & Powell, 1983; Scott, 1995; Huault, 2008) .

Initially, Di Maggio and Powell (1983) affirmed the existence of the phenomenon of homogenization in and between organizations. From this observation, they mobilized the concept of “isomorphism” in order to understand and explain this type of observed phenomenon. In this framework, “isomorphism” allows “to identify the process that leads the unit of a population to gather to units facing the same environmental conditions” (Huault, 2008) .

According to Di Maggio and Powell (1983) three main forms of isomorphisms are identified:

· Coercive isomorphism:

Coercive isomorphism is the result of political influence presented in the form of formal or informal pressures exerted by one or more organizations belonging to the same field (Huault, 2008) . This form of political pressure is intended to push other organizations to align with the norms, values, beliefs and cultural expectations of society. In this spirit, cooperation between rival firms can be considered as a means of resistance led by Allied actors to deal with the political pressures exerted by the institutions (Oliver, 1991) .

· The mimetic isomorphism:

Another form of isomorphism, mimetic isomorphism is presented as “behavior of organizations facing a problem whose causes are obscure or solutions are unknown” (Huault, 2008) . This form of isomorphism, for this purpose, comes from a response to uncertainty (Di Maggio & Powell, 1983; Scott, 1995) to guarantee firms a legitimate position in the industry (Oliver, 1991) .

In this perspective, firms seek to bring together those whose purpose is to conform to the norms, values and beliefs of the industry. In this case, the search for legitimacy and the fight against uncertainty is a main factor that encourages competing firms to maintain strategic collaborations (Luo, 2004) .

· The normative isomorphism:

The last form of isomorphism identified by Di Maggio and Powell (1983) , this form of isomorphism differs from the two previous forms in the importance given to the professionalization of the workforce. In this sense, professionalization is considered as “all the collective efforts of the members of a profession to define their conditions and working methods and to establish a legitimate basis for their activities, guaranteeing them a sufficient degree of autonomy” (Huault, 2008) . Moreover, this form of isomorphism does not provide an explanation for the emergence of strategies of coopetition, in fact, that it focuses primarily on the qualifications of the workforce and does not justify the strategic relationships inter-firm.

In total, the neo-institutional theory provides interesting perspectives to understand the emergence of the adoption of strategies of coopetition. Indeed, the theory explains the reasons for the emergence of strategic collaborations between rival firms. In this spirit, coopetition relations arise if the firm seeks to cope with the political pressures exerted by the institutions (coercive isomorphism) or if it seeks to legitimize its position in the industry (mimetic isomorphism). This explanation proposed by the neo-institutional theory remains valid only at the level of the industry.

5. Organizational Determinants

The search for mutual benefit the creation and sharing of resources and skills and the pursuit of innovation are fundamental factors that encourage competing firms to cooperate together.

5.1. The Search for Mutual Benefit

Cooperation between competing firms is considered as a source strategy for creating and appropriating value (Czakon et al., 2016) . Firms seek, for this purpose, to combine simultaneously the advantages of cooperation and the advantages of competition (Bengtsson & Kock, 2000) .

The search for mutual benefit in “win-win” logic is the main reason for rival firms to work together.

Since the first formulations of the coopetition problem by Brandenburger and Nalebuff (1996) the authors have focused on the concept of Value-Net in order to model the complexity of the phenomenon. coopetition. Therefore, coopetition was considered as a mutually beneficial strategic option by all the actors involved (focal firm, supplier customers, substitutes and complimentary) in a “win-win” logic.

Indeed, the adoption of a coopetition strategy is seen as “a convergence of interests between complimentary when cooperation and competition occur simultaneously” (Dagnino, 2007: p. 88) .

5.2. Co-Creation and Sharing of Resources and Skills

Cooperation with rivals enables the firm to acquire resources and skills available from competing partners and to develop new technical capabilities through existing initial endowments of partners (Quintana-Garcia & Beravides-Valesco, 2004) . The authors argue that the pooling of resources and skills are decisive and mobilizers of the emergence of coopetition strategies. Indeed, Tunisian artisanal VSEs, by seeking to simultaneously combine the advantages of cooperation-competition in a win-win logic.

In this perspective, pooling and sharing resources and competences between rival partners is considered as a fundamental factor in the emergence of coopetition strategies.

For this purpose, the adoption of a coopetition strategy appears as a mechanism for mutual creation (co-creation) and the exploitation of resources and expertise from the initial endowments of existing resources and competencies of rival partners.

In such a spirit, the adoption of a coopetition strategy is considered as a strategic choice based to a large extent on the similarity of the initial endowments available to the partners, in terms of resources and expertise.

5.3. Joint Innovation

The current economic context is characterized by deep and increased technological changes; firms suffer from lack of resources and skills to develop products, technologies or innovations. Indeed, the innovation process does not result from the individual actions of firms, but rather is based on collective exchanges between them (Tether, 2002) : “Innovation cooperation means active participation in joint R&D and other technological innovation projects with other organizations. It does not necessarily imply that both partners derive immediate commercial benefits from the venture. Pure contracting out work, where there isno active participation is not regarded as co-operation.” (Tether, 2002: p. 949)

In order to develop new products or new technologies, firms are called upon to seek out and establish strategic collaborations in the form of alliances or partnerships, based essentially on the mutual exchange of resources and skills.

From his point of view, Teece (1986) argued that firms did not have the necessary set of resources and skills to develop innovative products:

“It is well recognized that the variety of assets and competencies which need to be accessed (for innovation) is likely to be quite large, even for modestly complex technologies. To produce a personal computer, for instance, a company needs access to expertise in semiconductor technologies, display technology, disk drive technology, networking technology, keyboard technology and several others. No company can keep pace in all of these areas by itself” (Teece, 1986: p. 293) .

In this case, cooperating with rivals allows the firm to access all the resources, including the technological resources and competencies of these competing partners (Jorde & Teece, 1990) . In addition, cooperation between rival firms allows the firm to reduce the risks associated with innovation (Tether, 2002) .

In fact, sectors of activity such as the high-tech sector (Shapiro & Varian, 1999) , which are characterized by high costs of research and development (R & D), encourage competing firms to share the costs associated with these activities. (Zineldin, 2004) , which will allow them to share all the risks associated with these activities, especially financial risks (Gnyawali & Park, 2009) .

“Working together with other competitors with similar resources is an effective way to pursue large-scale R & D projects and share risks associated with technology” (Gnyawali & Park, 2009) .

In sum, the adoption of coopetition strategies allows competing partners to pool their efforts, in terms of resources and expertise, to develop new products or new technologies, but also to share risks related to innovation.

5.4. Individual Determinants

The recent strategic management approach “Strategy as a practice” introduced by Jarzabkowski et al. (2007) allows to conceptualize the strategy as an articulation between the strategic make, the practices and the practitioners (Dahl et al., 2016) . This new approach in strategy makes it possible to reconcile the strategy as an iterative process created from interactions of actors at several levels (inter and intra-organizational and inter-individual).

Through this vision of the strategy, the adoption of the strategies of coopetition is considered as resulting from the actions and the interactions between the individuals of different hierarchical levels.

In this sense, Jarzabkowski et al. (2007: p. 7) argue that “coopetition strategy consists of more or less cooperative and competitive activities, which are consequential for the direction of inter-competitor relationship and, ultimately, for the organization. Cooperative activities arise out of mutual interactions between the individuals and the interorganizational level. Simultaneously, competitive activities stem from interactions among organizational members at the intra-organizational level”.

In a sense, individuals contribute, directly or indirectly, through their actions and interactions to the strategic decision making process of their organizations. Indeed, the strategic orientation of organizations depends intimately on the perceptions, representations and cognitions of the individuals involved in the decision-making process.

However, the affect of the individuals makes it possible to orient the strategic choice of the organizations towards the competition, towards the cooperation or at the same time towards the two opposite relational modes (coopetition).

The adoption of a coopetition strategy depends largely on the affective, perceptual and cognitive dimensions of the actors in and between organizations.

In total, we have been able to develop the different levels of determinants that are likely to lead to the emergence of coopetition strategies. We discussed three levels of determinants: industry-related determinants, organizational determinants, and individual determinants. Each level of determinant alone does not allow one to understand the dynamic and complex nature of the phenomenon and the genesis and emergence of strategies of coopetition between firms. Research allows to combine different levels of analysis and to propose an integrative approach (Gnyawali & Park, 2009) in order to envisage the emergence of coopetition strategies from several angles of view.

6. Conclusion

This present research raises the question of the determinants of a strategy of coopetition. Why do competing companies commit to a “paradoxical” coopetition relationship?

This research allows advancing elements of theoretical answers on this questioning, from a synthetic reading of the literature on the determinants of coopetition. This research makes it possible to distinguish three levels likely to influence the behavior of companies to adopt “paradoxical” and “counter-intuitive” strategies such as coopetition.

At the macro level, the economic and institutional context, the nature and the structures of the markets appear as major factors that can influence the behavior of firms to maintain strategies of coopetition.

At the organizational level, the search for mutual profit in a “win-win” logic, the creation and sharing of resources and skills, joint innovation and organizational learning, are the determining factors of coopetition strategy.

At the individual level, the representations, perceptions and affects of individuals in and between companies make it possible to guide the strategic choices of firms, either towards competition, towards cooperation or towards coopetition.

This research helps to shed light, even partially, on the determinants and factors likely to push companies to adopt strategies of coopetition. It is a continuation of the work of Gnyawali and Park (2009, 2011) .

Future research may focus on empirical testing to test these different determinants in different contexts and in different activity sectors and to measure the degree of influence of each level of determinants on adoption of coopetition strategies.

Conflicts of Interest

The authors declare no conflicts of interest regarding the publication of this paper.

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