Introduction to

Coopetition
MSc General Course
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 How is your mood today?

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Session 1. Kick Off
INTRODUCTION
Coopetition Foundation
 Course Description & Philosophy

Understand Simulate Evaluate Manage Pitch

monday tuesday Wednesday Thursday Friday
Session 5
Session 4
The
Coopetition
Session 3 Coopetition Battle
Management
Session 2 Coopetition SMEs, Mindset,
Dynamics & Management
Session 1 Innovation
Identify & Analyze Coaching
Coopetition Process,
Strategies Innovation,
Introduce Platforms
Coopetition Simulation - The
Negotiator’s Coaching
Foundations of Dilemma (HBP)
coopetition

Homework
 Do the MCQ  Do the MCQ  Do the MCQ  Do the MCQ  Submit your
 Read the case  Prepare the case  Prepare the case Powerpoint
 Prepare the case
 Practice simulation  Peer Evaluation
http://bit.ly/Coopetitio  Question of
nGameSimulation reflection
 Course Evaluation
 Evaluation

Group 60%
- Group presentation Pitch (30%)
- Detailed Powerpoint (30%)
- with notes OR extended slides

Individual 40%*
- Question of Reflection on Coopetition (20%)
- No more than one page (300 words)
- Peer Evaluation (10%)
- MCQ tests each session (10%)

* Bonus/Malus according to Attendance/Absence and Participation

GROUPS ORGANISATION

❖ 5-7 students per group (when possible)

❖ Write down your name
❖ If you don't have a group yet, write your name on an empty
group
❖ Groups will be final! during this course
❖ Find you MSc

Find your group now here:

http://bit.ly/CoopetitionGroups
 CHOOSE YOUR PRESENTATION CASE

CASE 1 CASE 3

Telecommunications
The US Craft Beer Industry
Satellites Manufacturing

CASE 2 CASE 4

Business Ecosystems in
Entrepreneurial Support
the ICT industry
Organisations
CHOOSE YOUR PRESENTATION CASE

❖ Indicate the number of the group for the 4 cases

❖ Only 2 groups per case
❖ If there is no spot let you have to choose another case

http://bit.ly/SelectCase
Bibliographie
 Do you know COOPETITION?

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Coopetition Foundation
 Historical evolution

2000
Adam M. Brandenburger (NYU
Stern) & Barry J. Nalebuff (Yale
School of Management)
1995 Acceptance of the term

Popularization of the term

Ray Noorda (1924-2006) 1993 Game theory: players adopt 2
Co-founder of Novell Inc. contradictory behaviors
simultaneously in the same game.
Appearance of the term
Cooperation and competition
relations between computer
technology companies
Coopetition Historial Evolution

Exponential trend
line

N° articles Expon. (N° articles)

Source: Köseoğlu, Yildiz, Okumus, & Barca (2019, p. 8)

 Economics – Competition logic

⮚ Regulated competition
in the market
• « free and undistorted
competition »
• Competition as the rule
• No agreement between
competitors

Total Fine: 534 M€ (2005)

• Orange 256 M€
• SFR 220 M€
https://www.businessinsider.fr/les-plus-importantes-amendes-infligees- • ByTel 58 M€
par-autorite-de-la-concurrence-a-des-cartels/#3-lestrong-cartel-de-la-
telephonie-mobile-strong534-millions-deuros
 Coopetition logic

⮚ If you have a competitor, both of you have the

same problems to solve
• Market conditions
• Customer needs
• Same uncertainties
• Cost structure
• etc.

⮚ the more dangerous a competitor is, the more

attractive it may be as a partner

⮚ the best partners are simultaneously potentially

the most dangerous competitors

Hamel, G. (1989). Collaborate with your competitors and win. Harvard Business Review, 67, 133-139.
 Coopetition strategy

« Co-opetition is defined as the simultaneous and paradoxical

combination of the two opposing strategic interactions of
cooperation and competition between two or more actors at
several levels of analysis »

Yami et al., 2010; Bengtsson and Kock, 2014; Bengtsson and Raza-Ullah, 2016; Chiambaretto and Dumez, 2016; Bengtsson
et al., 2016
Key definitions

Actor-Focus:
▪ Coopetition, based on game theory and value-net (a map of the full game, the players
involved and their relationships to each other), refers to creating a bigger pie to increase
benefits for all players by cooperating (a focus on market growth) and dividing the pie
among the players by competing (a focus on market share) (Nalebuff & Brandenburger,
1997)

Activity-Focus:
▪ Coopetition is a dyadic and one to one relationship between a pair of firms, such that
firms cooperate in activities far from their customers, while simultaneously competing in
activities close to the customers (Bengtsson and Kock, 2000)
▪ “A dyadic and paradoxical relationship emerging when two firms are cooperating in
some activities, while competing with each other in the remaining activities” (Bengtsson
and Kock, 2000, p. 412)
Coopetition challenge

⮚ A risky but potentially ⮚ Raises strategic questions

rewarding relationship • How will the competitive dynamics in

⮚
your industry change if you
Key issues cooperate—or if you don’t?

• Sharing • Will you be able to safeguard your

most valuable assets?
• Learning
Need specific analysis and
• Protection of assets strategy
Good or Trojan Horse?

Beware
Examples

DHL and UPS

Examples
Example
Google & Yahoo

Add
Take away

Coopetition in different industries

Coopetition strategy must consider other

competitors/market forces
 Question
Think about a situation where you were rival
with a collaborator
(or collaborative with a challenger)

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Try putting only one word
 Results
Think about a situation where you were rival
with a collaborator
(or collaborative with a challenger)

www.wooclap.com/GMSNUK
Try putting only one word
Coopetition between individuals

Games
Coopetition between individuals

Sports
Coopetition between individuals

Science
Coopetition between individuals

Job interviews
Do you find more cases?
Evolutionary Theory

Human = Social animal

Cooperation
Axelrod, R., & Hamilton, W. D. (1981). The
evolution of cooperation. Science,
211(4489), 1390-1396.

Survival of the fittest (Darwin)

= Competition
Anthropology

Margaret Mead (1934)

Maybe…

Performance and
Innovation

Competition

Cooperation

Time

Still unclear!
 Coopetition strategy

Definition
• cooperation and competition simultaneously

Cooperation Competition COOPETITION

• cooperation with the enemy

Cooperation COOPETITION

• cooperation in some activities and

competition in others
Coopetition strategy - Conditions

• Established between two (or more) companies (they

are both competitors and partners)
• Coopetition transforms the traditional approach that
opposes competition and cooperation to a modern
hybrid approach that allows the simultaneous presence
of both strategies !

Cooperation A FACT Competition

A MINDSHIFT
Cooperation High High
Low High

Low Low
Low High
Competition
 Coopetition strategy - Examples
• General Motors (Pontiac Vibe) and Toyota (Matrix) produce a nearly
identical product - they collaborated to design; but they go out into
the marketplace and try to outdo each other

New platform coopetition: General Motors and Honda, plan to share electric
vehicle factory to include two-way sharing of gas and electric designs.
“Combining the strengths of each company, and by carefully determining
what we will do on our own and what we will do in collaboration, we will strive
to build a win-win relationship to create new value for our customers,”
Kuraishi executive vice president of Honda Motor Co.
todaysmotorvehicles.com, September 2020
 Coopetition strategy - Examples
• Activity-based coopetition (cooperating in some activities while
competing in others)

• Exclusive partners and suppliers (since 2020)

• Cooperation: Samsung cooperate with Apple to produce

microprocessors

• Competition: in the market where both players compete to attract

customer and promote their devices functionalities

• The outcome for this coopetition is that both actors may achieve
competitive advantage & superior performance!
Cooperate or Not for Innovation?

All forms of cooperation (customers, suppliers,

universities, competitors, etc.)

Do not cooperate Cooperate

Innovate 33% 54% ↑

Do not 67% 46% ↓
Innovate

⮚ Companies that cooperate are more

innovative!
Coopetition - Motivations

⮚ Technological complementarity &

knowhow
• Pooling of expenses (costs reduction)
• Shortening the product life cycle
• Search for faster profitability
• Risk reduction
⮚ Standardization/Globalisation grouping
together competing players to establish global
standards and benefit from these agreements
⮚ (ex: consortium Blu-ray – Sony, Toshiba, Panasonic, Pioneer, Philips,
Thomson, Samsung)
 Coopetition - Motivations
Goal of
Explanation Example
coopetition
Costs are divided between Automobile, pharmacy,
Cost reduction
partner companies IT, banks, etc.

Access scarce or
Access to new resources helps Airlines, IT, banking,
missing resources
to create value pharmacy, etc.
and skills
Learn from the It's about creating value and Business alliances in the IT
partner then capturing or exchanging it field
in a win-win perspective
Eliminate a The objective is to counter an
Google and Apple vs.
common enemy or to protect oneself from
Microsoft
competitor more powerful competitors

Diversification and verticalization Oracle versus IBM, HP

Diversify risks
strategies help reduce risks versus IBM etc.

Translated from Pellegrin-Boucher, 2010, p.90

 Coopetition - Motivations

Activities far from the customer Activities close to the customer

Development of new
Competition on prices,
Competition products and service
services, communication
offerings

Alliances for co-

development and Marketing and sales
Cooperation
integration upstream of the alliances
product chain

Translated from Pellegrin-Boucher, 2010, p.121

 Coopetition theoretical foundation

Source: Della Corte & Aria, 2016, p. 525

 Theoretical foundation

Game theory*
• Analyzes the interplay between competition and cooperation
The Right Game: Firm’s Value Net

Success
comes by
playing the
RIGHT GAME
Who are the
players on your
company’s
value net?

Source: Brandenburger and Nalebuff, 1995, HBR

*John von Neumann and Oskar Morgenstern (1994 Nobel Prize)

Multiple levels of analysis
• Business unit (cross-functional
coopetition, between internal
Micro (Intra firm)
services)
• Social groups and Individuals

• Inter-organizational level (2 or more

firms)
• Project/team level (2 or more teams
Meso (Inter-firms) belonging in different firms)
• Individual level (2 or more individuals
belonging in different firms/
employees belonging the coopetitive
project with those who do not belong
to it
Macro (Inter-organizations) • Ecosystem/ Inter-Network (2 or
more meta-organization, networks,
clusters or ecosystems)
• State/ NGO (with government or
NGOs)
 Coopetition logic

Zero-Sum Game Positive-Sum Game

• One person’s gain is another’s loss • One person’s gain is NOT another’s loss

• Benefit is zero • Benefits for all parties are possible

• Ex: Poker, Heads or Tails • Ex: Economic Trade

• Win-Lose Situation • Win-Win Situation

• Pure strategies - Competition • Hybrid strategies: Coopetition

Philosophy:
Shift to Positive-Sum (Win-Win) Games
& Win-Win-Win when coopetition in
networks
Coopetition logic - Video

https://www.youtube.com/watch?v=jeASPXeIxQQ
Value Creation Vs. Value Appropriation

Collective pursuits to
increase overall value
A appropriation

A+B B A

Collective value Individual value

creation appropriation/capture

Adapted from Ritala and Hurmelinna-Laukkanen, 2019

 Advantages

• The competitor is often the best

potential partner for a company
• Know-how and similar technologies

• Common language

• Knowledge of the same markets/customers

• Benefits of additive effects:

economies of scale, multiplicative
effects, synergies
• Benefit from the advantages of
cooperation AND competition
• Creation of new knowledge

• Bigger Pie Advantage

 Disadvantages

• Counter-intuitive strategies
• Internal opposition (culture, organisation), resistance
to change
• Complex management of tensions

• Management of common interest / individual interests:

opportunism

• Sharing of benefits

• Double-edged sword - Trojan horse

Elements to be considered

• Competences of the firm

• Sector characteristics

• Objectives

• Managerial expertise

• Financial situation

• Issue of confidence
Coopetition Mindset

Think complementor as well as competitor

What you get is based on your added value!

Added value = [total value with you] – [total value without you]

And what you bring to others!

Strategic questions

• If a cooperative opportunity is on the table,

start by imagining what each party will do if
it’s not taken?
• What alternative agreements might the other
side make, and what alternatives might you
pursue?
• If you don’t agree to the deal, will someone
else take your place in it?
• In particular, will the status quo still be an option?
 Steps – P.A.R.T.S MODEL
• Have you written out the Value Net for your organization, taking care to make the list of players as complete as possible?
• What are the opportunities for cooperation and competition in your relationships with customers and suppliers, competitors
Players and complementors?
• Would you like to change the group of players? In particular, what new players would you like to bring into the game?
• Who stands to gain if you become a player in a game? Who stands to lose?

• What is your added value?

Added • How can you increase your added value? In particular, can you create loyal customers and suppliers?
Values • What are the added values of the other players in the game?
• Can you benefit from limiting their added values?

• Which rules are helping you? Which are hurting you?

• What new rules would you like to have? In particular, what contracts do you want to write with your customers
Rules and suppliers?
• Do you have the power to make these rules? Does someone else have the power to overturn them?

• How do other players perceive the game? How do these perceptions affect the play of the game?
Tactics • Which perceptions would you like to preserve? Which perceptions would you like to change?
• Do you want the game to be transparent or opaque?

• What is the current scope of the game? Do you want to change it?
Scope • Do you want to link the game to other games?
• Do you want to change the link from the game with other games?
Egocentric vs. Allocentric / Individual vs. Group

Egocentric vs. Allocentric / Individual vs. Group

- Added value: Put yourself in the shoes of others to
assess your added value

- Rules: Put yourself in the shoes of others to

anticipate reactions to your actions

- Perception: Put yourself in the shoes of others to see

how they see the game
 Take Away

⮚ Profits are not the only objective

⮚ Getting the right mindset ... Explore possibilities on how to change
the game

⮚ Becoming a player changes the game

⮚ Competition is valuable
⮚ Avoid a WIN-LOSE and Adopt a WIN-WIN or Win-Win-Win
relationship

⮚ Anticipate the reactions to your actions (Allocentric)

⮚ Perception is Reality - Tactics are used to shape other players’
perceptions

⮚ Think bigger into a larger game! Nalebuff, 1996

Remember

The more dangerous a The best partners are

competitor is, the more simultaneously potentially
attractive it may be as a the most dangerous
partner competitors
TO DO NOW:

1. Create a student account using your

TBS email here:
https://hbsp.harvard.edu/registration
/student/
2. Get the HBR paper (read it as
homework)
3. Do MCQ 10 min!

4. Read your case

HOMEWORK

1. Read the HBR paper

2. Read your case

3. Practice the Coopetition Simulation

http://bit.ly/CoopetitionGameSimu
lation
SEE YOU TOMORROW!

Thank you !
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