Professional Documents
Culture Documents
Aihie Osarenkhoe
earned his PhD in Business Administration at Stockholm University, Sweden. He is a member of Editorial Advisory Board of, among
others, the forthcoming Emerald Emerging Markets Case Studies (EEMCS) series, Business Process Management Journal, and
reviews papers for Emerald and Inderscience Journals. Dr Osarenkhoe’s research interest and publications in academic journals
encompass strategic marketing issues such as methods for enhancing efficiency in supply chain; management of strategies for
creating and sustaining customer loyalty; implementation of customer-centric strategy; management of processes for the creation,
development and termination of customer relationships; interplay between information technology and marketing paradigms, as
well as the role of relationships and network perspectives in international business practices. The author has published articles
in, among others, European Journal of Marketing, International Journal of Strategic Management, Business Process Management
Journal, Journal of Database Marketing & Customer Strategy Management, International Journal of Technology Marketing and Asian
Journal of Information Technology. Apart from offering courses like Customer Relationship Management, Brand Management,
International Business Strategy, Marketing Theories, Dr Osarenkhoe supervises Bachelor, Master and Doctoral thesis work. The
author is also the Head of the MBA programme in Marketing Management at the University of Gävle in Sweden.
ABSTRACT Little attention has been devoted in extant literature to inter-firm dynamics
that entails both cooperation and competition – also known as ‘coopetition’. This article
contributes to extant knowledge by highlighting the complementarity-based nature of
coopetition strategy and its impact on collective strategies for value generation among
actors in three network settings. The empirical data collection draws on three cases
encompassing three empirical contexts. The results show that managerial leadership
and development of trust are the key success factors. Furthermore, this hybrid level of
inter-organizational relationship encompassing both competition and cooperation –
coopetition – fosters collective intelligence through information and knowledge sharing.
This article concludes that coopetition strategy enhances the internal resources and
market shares of competing actors. Thus, coopetitive relationships offer the advantage
of a combination of the need to innovate in new areas as a result of competition while
accessing new resources as a consequence of cooperation. From a managerial
perspective, the findings demonstrate the multifaceted nature of coopetition. Additional
work on the impact of the concept of coopetition strategy on business practice is needed
to add to this valuable endeavour.
Journal of Database Marketing & Customer Strategy Management (2010) 17, 201–221.
doi:10.1057/dbm.2010.23
Correspondence:
Aihie Osarenkhoe
Department of Business INTRODUCTION loosely aligned firms have bargained at
Studies, University of Gävle,
Gävle, Sweden
Historically, goods and services have been arm’s length, negotiated aggressively over
E-mail: aoh@hig.se distributed through networks in which price and other conditions of sale, and
© 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221
www.palgrave-journals.com/dbm/
Osarenkhoe
otherwise behaved autonomously.1 Today, that entails both cooperation and competition,
planned vertical and horizontal marketing and in most cases the situation can be
systems are rapidly displacing these described as something in between pure
conventional marketing channels as the cooperation and pure competition, also
dominant mode of distribution in many known as ‘coopetition’. Participating in
economies.2 However, according to Gill inter-firm networks, according to Thorgren
and Allerheiligen,1 channels of distribution et al,5 has become increasingly popular to
vary in their degree of organization from: enhance corporate entrepreneurship. Trust,
(1) loosely organized channels that routinely relationship diversity and knowledge
process goods, as might be expected with transfer, according to Thorgren et al, are
channels for convenience goods (conventional considered some of the prominent
channels), through (2) consensus systems cornerstones of well-functioning networks.
that are organized by the cooperation of This article contributes to extant
channel participants, to (3) highly organized knowledge by highlighting the
systems typified by vertically integrated complementarity-based nature of
channels (corporate systems), or those coopetition strategy and its impact on
formalized by contractual agreements collective strategies for value generation
(contractual systems). The particular focus among actors in three network settings. A
of this article is the consensus systems, in theoretical lens that enables a focus on
which the success of a channel’s marketing contemporary inter-organizational markets
effort depends upon the continued as organized behaviour systems, manifesting
cooperation of the channel members. network structures, is adopted. In light of
There is a consensus in extant literature this, business strategy is seen as an exchange
that cooperation is the prevailing behaviour strategy with an emphasis on exchange
in channel systems.3 As each firm depends effectiveness. This effectiveness is achieved
on the others in the channel to perform when some value is produced in
its tasks, cooperation among channel cooperation with other actors.
members is necessary and vital behaviour.
In this regard, Alderson4 set forth the LITERATURE REVIEW AND
foundations of a theory of marketing THEORETICAL BACKGROUND
interaction and cooperation based on his Thomas6 classified five strategic intentions
belief that ‘marketing cries out for a theory in terms of two dimensions – assertiveness
of cooperation’ to match theories of and cooperativeness – namely: competing,
competition and conflict.1,2 Thus, there collaborating, compromising, avoiding and
continues to be a need for development of accommodating. In this article, the above
such a theory of cooperation. Although categorization is aggregated to include
much of the literature dealing with competition, collaboration, coordination
distribution channels has concentrated on and cooperation. Overarching these strategic
aspects of conflicts within the channels, intentions is the network perspective.
most studies state that the answer to this Below, they are described and anchored in
problem is cooperation within the channels, the body of literature.
but do not elaborate on the avenues this
cooperation can.1 A more optimistic and Inter-organizational
productive view would be to concentrate relationship mix
research efforts on ways to encourage Researchers of business networks6–8 have
cooperation. transposed the social exchange perspective
Unfortunately, very little research has on social networks9 to business networks.10–12
focused on the inter-organizational dynamics Social exchange theory13 considers exchange
202 © 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221
A study of inter-firm dynamics between competition and cooperation
© 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221 203
Osarenkhoe
204 © 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221
A study of inter-firm dynamics between competition and cooperation
far from the customers. In competition, the role of group member affect. Group
focus is on value appropriation strategies, members’ affective displays (particularly the
whereas in cooperation the focus is on activation level of the displays) have a
collective strategies for value generation. substantial impact on the relationship
between trust and cooperation. Our study
Cooperation testifies to the significant role that affect
Cooperation is defined as a relationship in may play in keeping up cooperation in
which individuals, groups and organizations organizations and work groups when trust
interact through the sharing of is withering.42
complementary capabilities and resources, Successful cooperation is based on trust,
or leveraging these for the purpose of commitment, and voluntary and mutual
mutual benefit.32, 36 From a supply chain agreement that can be set out in a formal
perspective,37–39 cooperation is defined as and documented contract or an informal
similar, complementary, coordinated contract aimed at achieving common
activities performed by firms in a business goals.38,42 Thorgren et al 5 examined the
relationship to produce superior mutual cause–effect relationships between
outcomes. Canegallo et al argue that human interorganizational trust, relationship
beings usually cooperate more than would diversity and knowledge transfer, and
be expected in terms of the maximization corporate entrepreneurship among
of purely selfish utility functions.40 networking firms. They found a causal
According to Canegallo et al, the idea that influence of knowledge transfer and
fairness and/or altruistic concerns may be relational diversity on corporate
present in ‘normal’ preferences represents a entrepreneurship. That notwithstanding,
major shift from mainstream economics. cooperative relationships can emerge in
Accordingly, there might be something in situations involving competitor interaction.34
‘human nature’ that drives people toward The main motive for cooperation is to
cooperation.41 For most of our existence, adopt collective strategies for value
human beings have been hunter-gatherers. generation.43 Basically, firms cooperate for
Such societies constitute a good environment the purpose of achieving a common goal,
in which to nurture cooperative conventions, and as a result share resources with other
due both to their efficiency in maximizing competing actors or acquire them in the
individual utility and to the existence of event they are lacking.43 Firms also
strong genetic (family) links.41 Thus, cooperate for the purpose of learning or
Canegallo et al also argue that it is reasonable sharing organizational expertise.
to conclude that mankind may have It is pertinent to mention here that
developed an instinct toward cooperation, the development and creation of certain
or at least a genetic propensity to learn inter-organizational relationships like
cooperative behaviours. industrial symbiosis/industrial parks are
According to Tanghe et al,42 it is widely sometimes influenced both endogenously by
acknowledged that trust greatly affects the network actors, as well as exogenously
work group functioning. Whereas trust may by political initiators who set the rules that
facilitate cooperation, distrust may impede individual actors must adhere to.44 In the
it. Hence, insight into when distrusters may case of politically induced cooperation,
be prompted to cooperate may therefore be a varied range of interests may lead to
of importance. Tanghe et al’s empirical incongruence between the politically
studies point to several moderators of the determined goal and the individual
effect of trust on cooperation. Unfortunately, objectives of the actors. A government may
these studies largely ignored the potential be interested in creating more jobs to
© 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221 205
Osarenkhoe
generate more tax income, while the between 30 min and 1 hour. Owing to
individual network actors follow their time constraint, the interviews with Fujitsu
own interest. That is, the government is Services AB’s Chief Executive Officer
interested in more actors joining a network (CEO) and Strategic Manager were carried
to generate more income, whereas the out via Skype or The Swedish University
individual actors would prefer fewer actors Network. Interview guide was mailed to
in order to maximize client traffic for their them before the interview. Each interview
own benefit. lasted 2 hours, and was transcribed by the
author. In the case of AWPK, face-to-face
RESEARCH METHODOLOGY interviews were conducted with the
The empirical base is used to highlight the Executive Director and 20 of AWPK’s
complementarity-based nature of 82 members. The members’ interviews were
coopetition strategy and its impact on chosen randomly. The interviews at AWPK
collective strategies for value generation were conducted by Vjosa Mullatahiri,
among actors in three network settings. a student of the author of Kosovo origin.
Given the qualitative nature of the The interview guidelines were constructed
objective of this study, and the limited in English, but administered by Vjosa
attention devoted thus far to this research Mullatahiri in Serbian, one of the local
domain, a qualitative research method and languages. Vjosa also translated the data
case study approach are appropriate as we collected from AWPK into English, which
attempt to contribute new knowledge and was then analysed by the author. Additional
theory building.45 Use of secondary data to information was received directly from the
support in-depth interviews and participant Executive Director of AWPK via e-mail.
observation is important for triangulation, Secondary data sources from AWPK were
and is therefore highly recommended in also utilized. The case of AWPK was
case study research.46 The empirical data chosen for its uniqueness as a business
collection draws on three cases from three association and for its success in
empirical contexts. The three cases – a food institutionalizing the cooperation between
court in the Gallerian Nian Mall in Gävle, producers, suppliers, governmental
Sweden, Fujitsu Services AB in Kista institutions, universities and other business
Industrial Park in Stockholm, Sweden, and associations operating in Kosovo and in the
the Association of Wood Processors of region.
Kosovo (AWPK) – contain unobtrusive The data analysis follows the procedures
information about inter-firm dynamics. The applied by Ang.34 First, we reduced the
three cases provide natural settings needed data by extracting the information relevant
to highlight the existence of a relevant link to the variables of our theoretical
between cooperation strategy and framework, and then we used our
competitive intelligence in general, and the framework to categorize the data to
complementarity-based nature of enable comparisons. To achieve a logical
coopetition strategy and its impact on flow in the analysis, the data collected
collective strategies for value generation were linked to the appropriate strategic
among actors in three network settings in intentions, (Thomas6) and the hybrid level
particular. of inter-organizational relationship
In the case of the food court in Gallerian encompasses both competition and
Nian Mall, interviews were held with Anna cooperation – ‘coopetition’ – in order to
Andersson, the commercial manager of the reinforce the complementarity-based
mall, 29 food vendors and three janitors in nature of coopetition strategy. This
the food court. Each interview lasted process was helpful in distinguishing the
206 © 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221
A study of inter-firm dynamics between competition and cooperation
main results of the study and thereafter in to act as the leader for the food vendors,
drawing conclusions. gathering feedback on a variety of issues,
sharing information, collecting the monthly
EMPIRICAL FINDINGS fees to cover the expense of buying and
maintaining the dining tables and dishware,
The food court in Gallerian Nian and to represent the food vendors in
The food court in the Gallerian Nian Mall negotiations with the landlord and janitors.
(hereafter Food Court) is a plaza in the The current spokesperson for the Food
mall with contiguous counters of multiple Court is the owner of the pizza restaurant.
self-serve food vendors and a common area Other food vendors usually consult the
with tables for dining. The Food Court spokesperson when they encounter any
comprises restaurants with mostly Asian, problems. General meetings are held on a
European, African, Middle Eastern, Latin regular basis and attendance is compulsory
American and North American cuisine – for all food vendors in the Food Court.
15 restaurants that share a relatively small Most of the restaurants are satisfied with the
space. With reference to the results from current cooperation.
the observations made and the 33 interviews The managers of the mall, property
conducted, it is obvious that the Food owners and all the food vendors meet once
Court concept constitutes a major part of a month to share experiences and discuss
the business activities of Gallerian Nian. pending and future issues or problems. The
According to Anna Andersson, ‘The food landlord uses multichannel communication
court in Gallerian Nian Mall in Gävle tools (e-mails, hard copy and so on) to
attracts more customers to the mall. Often distribute information and other resources
people come in just to have a meal, to the tenants. Events are frequently
although some of them browse or do some organized by the landlord to attract
shopping after that’. customers to the mall. To further market
Activities in the mall are coordinated the shops in the mall, including the Food
by a management team who serve as the Court, the landlord produces a magazine
landlord for, for example, the Food Court. that customers can take as they enter the
The restaurants at the Food Court are the mall. The magazine informs visitors about
tenants. The relationship between the upcoming events, new shops and artists that
landlord and the tenants in the Food Court are going to perform on the stage at the
is structural or transactional in nature. The centre of the mall. The landlord is also
mall (the landlord) only provides the premises responsible for mall security, but the costs
for the restaurants, and the restaurants of security services are shared by all of the
run their own businesses. The tenants shops in the mall.
(or restaurants/food vendors) in the Food The majority of the food vendors
Court cooperate with each other by sharing interviewed mentioned that managerial
the same facilities and janitors. Hence, a leadership, development of trust and the
coalition among the various actors has been structure of the food court are particularly
formed. There is a spokesperson for all of important success factors. (For similar
the tenants in the Food Court. Selection observation, see also Thorgren et al.5) The
of the spokesperson is done through Food Court consists of a number of vendor
elections, held yearly, for a 1-year term as food stalls and service counters. Meals are
spokesperson. A spokesperson can serve for ordered at one of the vendors and then
a maximum of three terms if re-elected by carried to a common dining area. The food
the majority support of the food vendors. vendors share the same resource and attract
The responsibilities of the spokesperson are customers to the same place. The majority
© 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221 207
Osarenkhoe
of the food vendors feel that this improving the quality of food, and
cooperation is much more efficient than improving the service delivery by being
working alone. They concentrate all their friendly to the customers and helping
efforts on their core competence – food customers select the right menu/dish.
preparation and serving their customers. The advantages and disadvantages
The food vendors do act alone in relation associated with the business model (Food
to other vendors in the Food Court, but Court) frequently mentioned by the food
also interact with the various other mall vendors both relate to sharing the same
actors to share information about technical resources, which helps each restaurant to
and non-technical tools that facilitate save costs. The main advantages cited are
efficiency in the seller–buyer interaction in that: competitors share competitive
the exchange process. They also exchange advantages and extend synergy to achieve
knowledge regarding entrepreneurial issues, win-win results; the current arrangement in
and current trends in consumer habits and the Food Court minimizes the risk of
preferences. The key critical factors that industrial monopoly in the market; the
contribute to the smooth operation of the cooperation mode provides considerate
Food Court are the high level of trust, service for customers, winning more market
commitment and loyalty among the actors. shares for the entire Food Court; and the
The food vendors have signed a legally individual food vendors do not need to
binding contract/agreement to create their worry about the cleaning because the
own menus and to not serve the same janitors manage all of the cleaning of the
dishes. To avoid ‘product cannibalization’, facilities. The main disadvantages cited are
the restaurants in the Food Court sell that: the restaurants have to share various
different kinds of food. In other words, the types of risks, for example, costs incurred
cuisines and choices are varied, offering a for any damaged or stolen facilities or
greater diversity of options. This is why utensils; most decisions regarding the
there is only one sushi restaurant, one running of the Food Court have to be
Chinese food restaurant, one Subway made jointly with other actors in the Food
restaurant, one fast food restaurant, one Court, and hence agreement must be
Turkish-style restaurant, one Swedish-style reached before action is taken; and the
restaurant and so on. This strategy can janitors do not provide clean tableware to
decrease cut-throat competition between different restaurants in a timely manner, but
restaurants and increase the diversity of taking decisive measures to correct this
food. behaviour is beyond the responsibility and
The findings show that the level of thereby also ability of the individual
intensity of interaction among the food restaurant.
vendors is high. They do not think that
competition in Food Court is an issue; Fujitsu Services AB
rather, there is a commitment to making Fujitsu Services AB (hereafter Fujitsu
sure the Food Court is mutually beneficial Services) is part of Fujitsu Limited, the
to all of the channel participants. Thus, third largest information technology service
the food vendors compete with each other provider in the world. Fujitsu Limited is
by cooperating. They improve their affiliated with Siemens for its computer
competitiveness through value-added production. Fujitsu Services provides
business practices like the use of unique consulting, service and hardware to
trays, decorations, presentation of the companies and the public sector in Sweden.
dishes, designing their menus to enhance Fujitsu Services is located in Kista, an area
the attention rate, business processes, of Stockholm where most of the global
208 © 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221
A study of inter-firm dynamics between competition and cooperation
technology companies are located, such as transport authority). Even though the firms
Microsoft, Dell and Sun Microsystems. collaborate with respect to activity links and
Over 500 of the world’s 1400 leading resource sharing, however, they also
information and communications technology compete with each other.
(ICT) firms have operations in Kista. This Through exchange relationship processes
ICT cluster provides an opportunity for with other firms’ activities and resources,
firms to build networks of relationships. Fujitsu Services develops strong bonds with
According to Fujitsu Services’ CEO, the other firms and, at the same time, maintains
company has just finished developing a its identity in the networks.
logistics solution for Telia, a large Swedish Microsoft also collaborates with WM Data
telecom company. Jetpack provides Fujitsu on a variety of projects, and often Fujitsu
Services with a car with which Fujitsu Services ends up competing with them for
Services provides distribution and logistics the same deals. At other times, the solutions
for Telia in Swedish cities that other Fujitsu Services is involved in are unique,
companies like DHL do not service. such as in the cases of Sun Microsystems and
The company also sells solutions to other Clear Channel. However, Clear Channel
companies, such as Dell. Fujitsu Services also cooperates with other companies in the
works with Dell to provide computers and same industry as Fujitsu Services, but for
manage workstations in Sweden. These two other business deals. As one respondent
companies work together in other parts of noted, ‘there are more advantages than
the world as well, Fujitsu Services helping disadvantages associated with being a part of
Dell or Dell helping Fujitsu Services, a cluster and the networks. Then the
depending on who is better established in companies are able to focus on their core
that market. Another company located in competence’. For example, Clear Channel is
the Kina cluster is Microsoft, which also better at content and advertising, and
works with Fujitsu Services. Microsoft sells Samsung is better at screens, which is better
software to customers and Fujitsu Services for Fujitsu Services AB as they can focus
then supplies the training and service for on delivering services. Similarly, Sun
these customers. Fujitsu Services also sells Microsystems is good at producing products
Microsoft’s software and Microsoft provides and Fujitsu Services is good at distribution.
custom solutions for their customers. When they have trade shows in the area,
The companies also market products and they can also share marketing costs.
solutions together. Another Fujitsu According to another respondent, ‘Microsoft
collaborator is Sun Microsystems, which is in a special situation compared to the
supplies servers and super computers storing other companies since they are so dominant
data, for which Fujitsu Services handles the in the market. They can use their size and
customer service and provides cards that let others do what they don’t want to do or
enable the employees to log into data can’t do. They also earn more money from
storage servers from any computer. Fujitsu the deals than Fujitsu Services AB does’.
Services has also networked outside of the The respondents did not actually see any
ICT cluster, for example, with Clear disadvantages apart from when one of the
Channel, an advertising company. Clear partners plays a dominant role in relation to
Channel and Samsung are working together a smaller partner in the relationship.
to provide television screens to be used in According to the informant, ‘the imbalance
Stockholm subway and train stations. The in Fujitsu Services AB’s relationship with
screens will feature commercials as well as Microsoft is not always to our advantage.
timetables for train services for Stockholm Resource dependence will lead to imbalance
Lokaltrafik AB (Stockholm’s intra-city in the relationship’.
© 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221 209
Osarenkhoe
210 © 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221
A study of inter-firm dynamics between competition and cooperation
© 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221 211
Osarenkhoe
elements of hollow and flexible networks. views by Anderson et al and Veludo et al10,52
The firms in AWPK operate in a highly Through exchange relationship processes
volatile environment, but the links between with other firms’ activities, and resources,
members are transaction-based, competitive bonds are created and developed between
and cooperative in nature. Fujitsu Services and its interacting partners.
Fujitsu Services networks and cooperates The AWPK and Fujitsu Services cases relate
with other companies to gain knowledge to each other in that both the AWPK and
in other areas. Collaborating with their Fujitsu Services form their identities in the
competitors enables Fujitsu Services to networks. Activity links include the
provide solutions to their customers so as to technical, administrative, commercial and
reap financial benefits. They also network other activities of an organization that are
with both competitors and suppliers and connected in different ways to significant
companies in other markets. Perhaps one of others.
the reasons for Fujitsu Services’ ability to The resources possessed by the firms
network and cooperate with other in the Food Court, the Fujitsu Services
companies is partly due to its location in and AWPK cases are built around
Kista Industrial Park – making it easier to heterogeneous resources. This reinforces the
build relationships with competitors view of the network approach11,12,53 that
operating in other markets, such as Clear actors possess specific resources and perform
Channel. But, as the CEO mentioned, not specific activities that create opportunity for
all companies operate and cooperate on the exchange relationships among them. The
same terms. Microsoft has more or less a behaviour of the firms investigated is
monopoly in some markets, allowing them relevant in the activities-actors-resources
to charge higher prices and to set the terms model’s actor bonds, activity links and
of their relationships in a way that Fujitsu resource ties. Exchange theory13 is relevant
Services is not able to do. Fujitsu Services in the three cases because all of the actors
collaborates with others not only for its in the relationships and networks obtain
own gains, but on symbiotic terms. This valued tangible and intangible resources,
also means that they use cooperative and perform activities through interactions
business practices. The firm cooperates and with other actors through exchange from
competes with other companies, such as a cost-benefit perspective based on
Dell, providing shared solutions for the self-interest. It was apparent from the
customers. Fujitsu Services is also part of interviews that the actors contribute to the
the information and communication exchange only when they expect benefits in
technology cluster in Kista Industrial Park. return. The topography of inter-firm
Business activities in the Food Court, the dynamics and relationships is depicted in
Fujitsu Services case and AWPK consist of Table 1.
sets of connected relationships between The key critical factors contributing to
firms18,52 in which exchange relationships the success of the relationships in the cases
are established between firms conceptualized presented include trust, commitment and
as collective actors. These findings are in loyalty. This is in agreement with the view
agreement with Cook and Emerson, expressed in extant literature that the
Anderson et al, Bititci et al and Blomqvist quality of relationships is enhanced as a
et al.9,10,33,36 Efficiencies in the three cases result of increased inter-organizational
are achieved through the interlinking of trust.54,55 Inter-organizational trust among
activities, creative leveraging of resource the actors in the three cases is high. This
heterogeneity, and mutuality based on indicates the extent to which organizational
self-interest of actors. This is in line with members have a collectively held confidence
212 © 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221
Table 1: Topology of inter-firm dynamics and relationships
Direction of Nature of independence
relationship
Competition Collaboration Cooperation Coopetition
Vertical Arms-length exchange. Dynamic Alliances between buyers and Alliances between buyers and Coopetition fosters information and
situation when several actors suppliers, mutual engagement suppliers. Division of labour, knowledge sharing, as coopetitors
vying for scarce resources, and/or in a coordinated effort to solve each responsible for portions access immaterial resources in an
producing and marketing very a problem (Food Court, Fujitsu of the work (Food Court, Fujitsu interactive way, due to the network
similar products or services (Fujitsu Services, AWPK) Services, AWPK) structure of modern organizations.
Services) Competing and cooperating
simultaneously with partners,
including direct competitors.
Multifaceted relationships (Food
Court, Fujitsu Services, AWPK)
Horizontal Traditional competitive markets: Working together for a common Relationship in which Aligning different interests toward
Value-added business practices, interest; voluntarily cooperate organizations interact through a common objective and
service level, relationship marketing in the exchange and sharing of the sharing of complementary helping to create opportunities
practices (Food Court, Fujitsu resources, joint development capabilities and resources, for competitive advantage by
Services, AWPK) of products/services and or leveraging these for the removing external obstacles and
technologies. Alliances purpose of mutual benefit. neutralizing threats. Horizontal
between non-competitors. Alliances between non- multifaceted relationships based
Mutual engagement in a competitors. Division of labour, on trust, commitment and loyalty
coordinated effort to solve a each responsible for portions of (Food Court, Fujitsu Services,
problem (Food Court, Fujitsu the work (Food Court, Fujitsu, AWPK)
Services, AWPK) AWPK)
A study of inter-firm dynamics between competition and cooperation
© 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221
213
Osarenkhoe
214 © 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221
A study of inter-firm dynamics between competition and cooperation
and they leverage these for the purpose opportunity to reduce operation-related
of mutual benefit, through coordinated costs and risks; the possibility of technology
activities performed by the respective firms and capability transfer;30 and that inter-firm
(Food Court, Fujitsu Services and AWPK, cooperation produces synergistic outcomes
in the inter-organizational relationship mix that a single firm cannot achieve alone.36
they are involved in, to produce superior These benefits and cooperative strategy,
mutual outcomes. The cases also demonstrate according to neo-classical theory, hamper
that successful cooperation is based on trust, competition – without which the network
commitment and voluntary and mutual relationship cannot be effective. According
agreement that can be set out in a formal to Lado et al,64 a longer cooperative
and documented contract such as the Food relationship can turn into ‘group thinking’,
Court business model. which may hamper creativity and
innovation efforts. Moreover, politically
RE-INTERPRETATION OF THE induced cooperation (as in the case of
EMPIRICAL FINDINGS AWPK) is artificially established.
Figure 1 depicts the complementarity-based Consequently, events and activities in the
nature of coopetition strategy and its impact network are interpreted differently by actors
on collective strategies for value generation from different backgrounds: what one actor
among actors in two network settings. The interprets as success, another might interpret
figure demonstrates the continuum nature as failure. This creates a problem for trust-
of actor bonds, resources ties and activity building, which is essential for the norm for
link of hybrid level of inter-organizational reciprocity to apply (for similar views, see
relationship between competition and also Tanghe et al 42).
cooperation. Several benefits of cooperation
were mentioned by the respondents: that Coopetition
the actors complement and enhance each The behaviour exerted in the findings
other in different areas such as production, shows that the firms do not always engage
product development and entry into new in either competitive or cooperative
markets;22 that the actors gain the relationships with each other. Rather,
© 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221 215
Osarenkhoe
they create conditions that enable both commonality and resource asymmetry
relationships to coexist. The business between competitors, market commonality
practices engaged in by firms in the food contributes more to competition, whereas
vendors in the Food Court, Fujitsu Services resource asymmetry contributes more to
and AWPK are in line with the definitions cooperation.
of coopetition offered in extant studies Porter views inter-organization relations
(see, for example, Bengtsson and Kock,22 as competitive in nature;29 it fails to identify
Wang and Krakover,43 Brandenburger and optimal strategic choices; predicting
Nalebuff,65 Chin et al 66). This shows that cooperative versus competitive outcomes.
there is a hybrid level of inter-organizational When organizations fully understand these
relationship between competition and strategic choices, they can then decide
cooperation, which is termed ‘coopetition’. which path to take or combine the paths.
Coopetition refers to the situation when Combining the paths, as demonstrated by
competitors have both a competitive and the empirical findings, is known as
a cooperative relationship with each at the coopetition, and organizations thrive by
same time.65 Bengtsson and Kock claim cooperating and competing: cooperation
that coopetition is the most mutually helps create a bigger pie so that a business
advantageous relationship for competitors. can win a bigger piece of the pie through
According to Brandenburger and competition.66 According to Chin et al,
Nalebuff, coopetition goes beyond the coopetition creates value through
conventional rules of competition and cooperation between competing
cooperation, in order to achieve the organizations, aligning different interests
advantages of both. toward a common objective and helping to
Harbison and Pekar67 point out that the create opportunities for competitive
majority of all new cooperative arrangements advantage by removing external obstacles
are between competitors. Luo44 discusses and neutralizing threats.66
how multinational enterprises engage in Coopetition strategy is a multidimensional
complex and simultaneous competitive- and multifaceted concept that assumes a
cooperative relationships with global rivals number of different forms and requires
(see also Hutzschenreuter, and Israel21). For multiple levels of analysis. Coopetition
example, Ericsson, Nokia and Motorola encompasses both economic and social
cooperate to improve the infrastructure of issues related to inter-organizational
China’s telecom industry, negotiate with interdependence. This implies that
the government for greater market access, organizations can interact in rivalry owing
and build telecom equipment clusters to to conflicting interests and at the same
increase the efficiency of value chain time cooperate due to common interests.22
integration for the entire industry in China. Bengtsson and Kock’s research shows that
At the same time, these same companies coopetition benefits the internal resources
compete fiercely to improve their own and the market shares of competing
gains. Thus, through cooperative relationships, organizations.22 One example of
global rivals work together to collectively coopetition is the Swedish brewery
enhance performance by sharing resources industry, where organizations compete to
and committing to common goals in certain distribute beer to wholesalers but
domains, for example, in value chain cooperate in bottle returns. Hence, there
activities, at the same time as they compete are two critical points in the coopetition
in other domains to improve their own strategy, namely knowledge sharing and
performance.44 While coopetition is pooling competencies, which can help to
fortified by the coexistence of market strengthen competitive advantage.
216 © 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221
A study of inter-firm dynamics between competition and cooperation
© 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221 217
Osarenkhoe
financial or emotional power) to force interact, the more information they bring
another party to act in a way that is not in from their respective connected
latter’s economic best interest (see the relationships into the focal relationship (see
Fujitsu Services case). Furthermore, Chetty and Eriksson16 for similar views).
Bengtsson and Kock enumerated four The networks that the investigated firms
different role conflicts that exist in belong to provide access to various sources
coopetitive relationship: intra-partner, inter- of information, thus offering more
role, inter-partner and personal conflicts.22 opportunities to learn than merely relying
In addition, sharing of resources and on knowledge from within the home firm.
activities can create an opportunistic Actors in the Food Court, Fujitsu Services
situation for self-interested partners to and AWPK consider themselves as members
exploit a weaker partner’s interest. of a network within a broader industry
Cooperation can hamper a firm’s operations framework. Through their respective
by enabling the competitor first to monitor industry frameworks, members acquire
and then to imitate the firm’s core ideas, influences, and/or information about
competencies and tactics.64 the surrounding network that would
When small- and medium-sized otherwise be unobtainable. This observation
companies are in cooperative relationships is in line with that of Chetty and Eriksson.
with major partners, there are cases where Though diffused in practice and recently
the small firm becomes dependent on a conceptualized in research, the concept of
dominating partner, making the relationship coopetition warrants further reflection and
tense as resource dependence may lead to a scrutiny.
power imbalance. A case in point is the Other implications of this study are that
relationship between Fujitsu Services and coopetition strategy has the potential to
Microsoft. However, Fujitsu Services sees turn out to be a novel managerial mindset
the potential benefits of getting access to to guide inter-firm dynamics. It is hereby
new markets, new distributors, information, stressed that coopetition implies that
knowledge or competence. At the same cooperation and competition merge to form
time, it is forced to comply with the a new kind of strategic interdependence
dominating partner’s (Microsoft) directions, between firms, giving rise to a coopetitive
and may need to give full access to product system of value creation. As the research
data and share core competence in order to and practice of coopetition strategy raises a
obtain guaranteed orders and other valuable number of fundamental challenges that are
things. The risk is that the relationship can relevant to managers and academics, it is
weaken further, and what began as a hereby emphasized that this notion is
healthy relationship can end up being a intended neither to lay the groundwork for
controllable relationship. An even higher a new paradigm in strategy nor to say a
risk is that when the dominating partner final word on the subject. Instead, the
gains access to the smaller firm’s core intention is to use coopetition to provide
competence, it becomes easier to replace new insight into the realities of today’s
the small company with a low-cost world, which depict the simultaneous
producer. existence of cooperation and competition
The knowledge developed in the between firms, and thus a behaviour
relationships of the firms investigated in this according to which interdependencies lead
study (Food Court, Fujitsu Services and firms to compete and cooperate at the same
AWPK) is unique because it is shaped by time.
information transferred through connected Although coopetition strategies first aim
relationships. The more the various partners at strategic decision making,42,65 adopting a
218 © 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221
A study of inter-firm dynamics between competition and cooperation
coopetitive state of mind is not enough; it Republic of China. Asia Pacific Journal of Marketing
and Logistics 19(1): 22–39.
is important to manage this strategy. 3 Roslin, R.M. and Melewar, T.C. (2004) Linking
Coopetition as a strategic model supports practices reflective of ‘Asian values’ and relationship
the exchange of tacit and non-tacit marketing in the grocery distribution channels in
Malaysia. International Journal of Retail & Distribution
knowledge, but can contain gaps regarding Management 32(1): 33–44.
the channelling of informational flows and 4 Alderson, W. (1969) Co-operation and conflict in
the decision-making process, both at the marketing channels. In: L.W. Stern (ed.) Distribution
alliance (inter-organizational) level and at Channels: Behavioural Dimensions. New York:
Houghton Mifflin.
the partner (intra-organizational) level. The 5 Thorgren, S., Wincent, J. and Öttqvist, D. (2009)
network view6–8 underlines the need to A cause-effect study of inter-firm networking
adopt a collective approach to strategy and corporate entrepreneurship: Initial evidence of
self-enforcing spirals. Journal of Developmental
coordination in order to make organizations Entrepreneurship 14(4): 355–373.
more effective. Thus, one brushes aside the 6 Thomas, K.W. (1992) Conflict and negotion
individual, partitioned approach in favour of processes in organisations. In: M.D. Dunnette and
the collective, opened approach. The latter M. Hough (eds.) Handbook of Industrial &
Organisational Psychology, Vol. 3, 2nd edn. Palo Alto,
can have two complementary implications: CA: Consulting Psychologists Press.
distributed knowledge – where the network 7 Axelsson, B. and Easton, G. (1992) Foreign market
implies sharing the knowledge gained entry – The textbook versus the network view. In:
B. Axelsson and G. Easton (eds.) Industrial Networks
within a community of practice; and the – A New View Reality. London: Routledge.
possibility of creating knowledge and 8 Svensson, G. (2004) Triadic dependencies in
know-how. business networks. European Business Review 16(5):
473–493.
This is hereby a call to direct researchers’
9 Cook, K.S. and Emerson, R.M. (1984) Exchange
attention to the impact of the concept of networks and the analysis of complex co-opetition?
coopetition strategy on business practice. International Journal of Contemporary Hospitality
Additional work is needed to add to this Management 20(2): 126–141.
10 Anderson, J.C., Håkansson, H. and Johanson, J.
valuable endeavour because despite the fact (1994) Dyadic business relationships within a
that coopetition is diffused in practice, it business network context. Journal of Marketing
has not been coherently and thoroughly 58(4): 1–15.
11 Håkansson, H. and Snehota, I. (1989) No business
incorporated into strategy investigation. In is an island: The network concept of business
conclusion, a few intriguing queries that strategy. Scandinavian Journal of Management 5(3):
await an appropriate response through 187–200.
future studies are posed: What are the 12 Prenkert, F. and Hallén, L. (2006) Conceptualising,
delineating and analysing business networks.
determinants of the emergence and European Journal of Marketing 40(3/4): 384–407.
development of inter-firm coopetition? 13 Granovetter, M. (1985) Economic action and social
What types of coopetition can we define? structure: The problem of embeddedness. American
Journal of Sociology 91(3): 481–510.
What are the critical issues related to the 14 Blankenburg Holm, D. and Eriksson, K. (2000) The
strategic management of coopetition? What character of bridgehead relationships. International
kinds of learning do firms experience under Business Review 9(2): 191–210.
coopetition? What are the most interesting 15 Osarenkhoe, A. (2008) What characterises the
culture of a relationship-oriented organisation
business or industry cases of coopetition applying a customer intimacy strategy? Journal of
strategy? Database Marketing & Customer Strategy Management
15(3): 169–190.
16 Chetty, S. and Eriksson, K. (2002) Mutual
REFERENCES commitment and experiential knowledge in mature
1 Gill, L.E. and Allerheiligen, R.P. (1996) Co-operation international business relationships. International
in channels of distribution: Physical distribution leads Business Review 11(3): 305–324.
the way. International Journal of Physical Distribution and 17 Encon, Y.Y., Hui, A. and Tsang, H.C. (2006) The
Logistics Management 26(5): 49–63. inter-organisational relationship in a multi-
2 Ling Yi, L. and Jaffe, E.D. (2007) Economic contractor business network. Journal of Quality in
development and channel evolution in the People’s Maintenance Engineering 12(3): 252–266.
© 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221 219
Osarenkhoe
18 Bernal, S.M.H., Burr, C. and Johnsen, R.E. (2002) performance. International Journal of Physical
Competitor networks: International competitiveness Distribution and Logistics Management 32(6): 431–454.
through collaboration: The case of small freight 36 Blomqvist, K., Hurmelinna, P. and Seppanen, R.
forwarders in the high-tech forwarder network. (2005) Playing the co-operation game right –
International Journal of Entrepreneurial Behaviour and Balancing trust and contracting. Technovation 25(5):
Research 8(5): 239–253. 497–504.
19 Turnbull, P., Ford, D. and Cunningham, M. (1996) 37 Fawcett, S. (1991) The status and impact of logistics
Interaction, relationships and networks in business issues in the success of co-production via
markets: An evolving perspective. Journal of Business Maquiladoras. International Journal of Logistics
& Industrial Marketing 11(3/4): 44–62. Management 2(2): 30–42.
20 Sandhu, M. and Helo, P. (2006) A network 38 Miles, R., Snow, C. and Miles, G. (2000) The
approach to project business analysis. Engineering, future organisation. Long Range Planning 33:
Construction and Architectural Management 13(6): 300–321.
600–615. 39 Fawcett, S. and Magnan, G. (2002) The rhetoric
21 Hutzschenreuter, T. and Israel, S. (2009) A review and reality of supply chain integration. International
of empirical research on dynamic competitive Journal of Physical Distribution and Logistics Management
strategy. International Journal of Management Reviews 32(5): 339–361.
11(4): 421–461. 40 Canegallo, C., Ortona, G., Ottone, S., Ponzano, F.
22 Bengtsson, M. and Kock, S. (2000) “Coopetition” and Scacciati, F. (2008) Competition versus
in business networks – To cooperate and compete co-operation: Some experimental evidence. Journal
simultaneously. Industrial Marketing Management of Socio-Economics 37(1): 18–30.
29(5): 411–426. 41 Caporael, L.R., Dawes, R.M., Orbell, J.M. and
23 Hunt, S.D. (2007) Economic growth: Should policy Van De Kragt, A.J.C. (1989) Selfishness examined:
focus on investment or dynamic competition? Co-operation in the absence of egoistic incentives.
European Business Review 19(4): 274–291. Behavioural and Brain Sciences 12(4): 683–698.
24 McNulty, P.J. (1968) Economic theory and the 42 Tanghe, J., Wisse, B. and van der Flier, H. (2010)
meaning of competition. Quarterly Journal of The role of group member affect in the relationship
Economics 82(4): 654–660. between trust and cooperation. British Journal of
25 Schumpeter, J.A. (1962) Capitalism, Socialism and Management 21(2): 359–374.
Democracy. New York: Harper and Row. 43 Wang, Y. and Krakover, S. (2008) Destination
26 Hunt, S.D. and Morgan, R.M. (1995) The marketing: Competition, co-operation or competition.
comparative advantage theory of competition. International Journal of Contemporary Hospitality
Journal of Marketing 59(2): 1–15. Management 20(2): 126–141.
27 Copeland, M.A. (1962) Institutionalism and welfare 44 Luo, Y. (2007) A coopetition perspective of
economics. American Economic Review 48(1): 13–20. global competition. Journal of World Business 42(2):
28 Park, D. (1998) The meaning of competition: A 129–144.
graphical exposition. Journal of Economic Education 45 Yin, R.K. (1994) Case Study Research – Applied
29(4): 347–357. Social Science Method Series, 2nd edn. Thousand
29 Porter, M.E. (1980) Competitive Strategy. New York: Oaks, CA: Sage.
Free Press. 46 Eisenhardt, K.M. and Graebner, M.E. (2007)
30 Prahalad, C.K. and Hamel, G. (1990) The Core Theory building from cases: Opportunities and
Competence of the Corporation. Boston, MA: Harvard challenges. Academy of Management Journal 50(1):
Business School Press. 25–32.
31 Bengtsson, M. and Kock, S. (1999) Co-operation 47 Johanson, J. and Mattsson, L.-G. (1988)
and competition in relationships between Internationalization in industrial systems – A
competitors in business networks. Journal of Business network approach. In: N. Hood and J.E. Vahlne
and Industrial Marketing 14(3): 178. (eds.) Strategies in Global Competition. London:
32 Gnyawali, D.R., He, J. and Madhaven, R. (2006) Routledge, pp. 287–314.
Impact of co-opetition on firm competitive 48 Marr, B., Schiuma, G. and Neely, A. (2004) The
behaviour: An empirical examination. Journal of dynamics of value creation: Mapping your
Management 32(4): 507–530. intellectual performance drivers. Journal of Intellectual
33 Bititci, U.M., Martinez, V., Albores, P and Parung, J. Capital 5(2): 312–325.
(2004) Creating and managing value in collaborative 49 Craven, D. and Piercy, N. (1994) Relationship
networks. International Journal of Physical Distribution marketing and collaborative networks in service
and Logistics Management 34(3/4): 251–268. organisation. International Journal of Service Industry
34 Ang, S.-H. (2008) Competitive intensity and Management 5(5): 39–53.
collaboration: Impact on firm growth across 50 Holmlund, M. and Törnroos, J.-A. (1997) What are
technological environments. Strategic Management relationships in business networks? Management
Journal 29(10): 1057–1075. Decision 35(4): 304–309.
35 McCarthy, S. and Golocic, S. (2002) Implementing 51 Barratt, M.A. (2004) Understanding the meaning of
collaborative planning to improve supply chain collaboration in supply chain. Supply Chain
Management: An International Journal 9(1): 30–42.
220 © 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221
A study of inter-firm dynamics between competition and cooperation
52 Veludo, M.L., Macbeth, D.K. and Purchase, S. competition and intra-organisational knowledge
(2004) Partnering and relationships within an sharing. Organisation Science 13(2): 179–190.
international network context. International Marketing 61 Madhok, A. and Tallman, S. (1998) Resources,
Review 21(2): 142–157. transactions and rents: Managing value in interfirm
53 Håkansson, H. and Johanson, J. (1992) A Model of collaborative relationships. Organization Science 9(3):
Industrial Networks. Stockholm: Almquist & Wiksell 326–339.
International. 62 Hallén, L., Johanson, J. and Seyed-Mohamed, N.
54 Morgan, R.M. and Hunt, S.D. (1994) The (1991) Interfirm adaptation in business relationships.
commitment-trust theory of relationship marketing. Journal of Marketing 55(2): 29–37.
Journal of Marketing 58(3): 20–38. 63 Campbell, A.J. (1998) Co-operation in international
55 Francis, J.D. and Mukherji, A. (2008) Mutual value chains: Comparing an exporter’s supplier
adaptation in buyer-seller relationships. Journal of versus customer relationships. Journal of Business and
Business Research 61(2): 154–161. Industrial Marketing 13(1): 22–39.
56 Dwyer, F.R., Schurr, P.H. and Oh, S. (1987) 64 Lado, A., Boyd, N. and Hanlon, S. (1997)
Developing buyer-seller relationships. Journal of Competition, co-operation and the search for
Marketing 51(2): 11–27. economic rents: A syncretic model. Academy of
57 Grant, R.M. (2005) Contemporary Strategy Analysis, Management Review 22(1): 110–141.
5th edn. Oxford: Blackwell Publishing. 65 Brandenburger, A.M. and Nalebuff, B.J. (1996)
58 Sahay, B.S. (2003) Understanding trust in supply Co-opetition. New York: Doubleday Currency.
chain relationships. Industrial Management & Data 66 Chin, K.-S., Chan, B.L. and Lam, P.-T. (2008)
Systems 103(8): 553–563. Identifying and prioritizing critical success factors for
59 Tecee, D. and Pisano, G. (1997) The dynamic co-opetition strategy. Industrial Management & Data
capabilities of firms: An introduction. Industrial and Systems 108(4): 437–454.
Corporate Change 3(3): 537–556. 67 Harbison, J.R. and Pekar, P. (1998) Smart Alliances.
60 Tsai, W. (2002) Social structure of ‘co-opetition’ San Francisco, CA: Jossey-Bass.
within a multiunit organisation: Coordination,
© 2010 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 17, 3/4, 201–221 221
Copyright of Journal of Database Marketing & Customer Strategy Management is the property of Palgrave
Macmillan Ltd. and its content may not be copied or emailed to multiple sites or posted to a listserv without the
copyright holder's express written permission. However, users may print, download, or email articles for
individual use.