Co-opetition– Explore, Exploit, Collaborate, Co-create: Sleeping with the Enemy Works– It Means ‘Think’ Differently…

Co-opetition; when you can’t beat ’em, join ’emfar from being just buzzwords– collaboration, co-creation, co-working… revolutionize traditional business models… And still another hot ‘co’ trend is co-opetition (combination of ‘cooperative’ and ‘competition’)– it’s a complimentary business strategy that drives competition and innovation…

The ultimate aim of co-opetition is pooling aspects of rival organizations’ knowledge and skills in order to co-innovate and create value…The traditional concept of business as ‘winner take all’ contest is giving way to a realization that in a networked economy (i.e., economic environment arising from digitization of fast-growing, multi-layered, highly-interactive, real-time connection with– people, devices, business…) companies must both co-operate and compete…

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The term ‘co-opetition’ requires companies to create business strategies that capitalize on relationships in order to create maximum value in the marketplace… Internet and mobile technologies have made it even more necessary for companies to both cooperate and compete, by enabling relationships through information sharing, as well as, integrating and streamlining processes…

In today’s networked economy, co-opetition is a powerful means of identifying new market opportunities and for developing business strategy that will result in mutual gain… The world is driven by co-opetition relationships and networks that embrace them. According to an African proverb; if you want to go fast, go alone; if you want to go far, go together…

In the article Co-opetition is Smarter than Competition by tibbr admin writes: Some business try to build everything by themselves, while other businesses partner with each other… Some experts say: in a growing market ‘co-opetition’ makes more sense than competition… Co-opetition is cooperating with other businesses (or, even within the same organization) to create value in an effort to gain a competitive edge…

It’s all about engaging in much larger business game, e.g.; when it comes to integrating other products with enterprise social networking, it’s about giving business the opportunity to rethink their approach, so they can be– more collaborative, more inventive… ‘Parallelism’ runs deep in the heart of social networking and it’s the foundation of co-opetition, i.e.; share to make things work– better, different… The significance of co-opetition lays in a way of ‘thinking’; thinking value, thinking experience, thinking future…

In the article Embrace Co-opetition for Rapid Growth by Martin Zwilling writes: Before you start negotiating any co-opetition deal, spend time thinking about– where and how you will be ‘competing’ and how you will be ‘cooperating’… While the natural instinct may be to defeat competitors, or fight for ‘win-lose’, deals that are not ‘win-win’ won’t work and may indeed, jeopardize the future of a company… In addition, two key issues for any cooperative agreement are; don’t violate the spirit of local laws or customs, and protect your intellectual property (IP) with proper two-way non-disclosure agreements… before you start…

According to Adam Brandenburger and Barry Nalebuff; there is duality in all relationships with respect to ‘win-win’ and ‘win-lose’ interactions– the success of most business is dependent on the success of ‘others’, yet they must also compete to capture the value created and protect their own interests… The co-opetition model provides a framework to identify and explain the underlying mechanisms in a firm’s environment and how these mechanisms can be changed to the firm’s advantage– think outside the box

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In the article Co-opetition not Competition by Karolina Maziliauskaite writes: Many might think that collaborating with competitors is an odd thing to do, but real experiences has demonstrated that it can bring a number of significant advantages, e.g.; co-opetition helps companies– reduce costs, share research and development (R&D), open new markets… According to Bernheim and Peleg; co-opetition is only possible when all parties decide that it’s in their ‘mutual’ best interests… co-opetition is sub-form of competition and both terms are closely connected… Also, it’s essential not to forget that there are many possible risks that come with co-opetition…

Hence a line must be drawn between co-opetition and competition, defining the extent of collaboration, as well as, the areas where competition begins again… It’s important that each partner be clear about their intentions and expectations, and agree before signing a final agreement. According to Marquis Cabrera; traditional collaboration fail because– deep down, stakeholders assume their success must come at the parties’ expense, which is clearly a ‘zero-sum’ game… The way forward with co-opetition is when companies act with what they recognize as a ‘congruence of interests’– that means in a traditional collaboration, companies’ relationships is defined by; 1+1=2… whereas in forming co-opetitions, companies’ relationships and expectations is defined by 1+1=3…

In the article Murky World of Co-opetition by Taran March writes: Co-opetition creates value for the companies involved by leveraging cooperative relationships, such as; shared research, development, create a product/service, entering a new market… According to Charles Green; mistrust is what keeps companies from collaborating with others and instead, they rely on external forces– contracts, external guarantors, surveillance… all of which will ensure a specific result…

But when trusted relationships are at hand, then not only are fewer external forces needed but parties are free to exchange information, ideas… and take more prudent risks. It’s intimate collaborations and it creates opportunities to engage and leverage each others strengths for their mutual benefit… Thereby creating value rather than just simply splitting differences… Co-opetitive is all about– maximizing ‘net value’ for each company through integration of some aspects of each company’s individual ‘parts’…

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In the article Changing Rules of the Game by Haydee Hernandez, Rick Murtha, Micah Peng, Yuhong Xiong write: In deciding how to conduct business in an increasingly complex world, many business tend to over-simplify their analyses to just– ‘win-lose’ competitive scenarios… Their reliance on competitive analyses implies the existence of a purely adversarial relationships between each player in their market/ industry… However in reality, there may be co-opetitions within an industry without resorting to unfair or non-competitive monopolistic practices. In fact, co-opetition and competition can often co-exist concurrently between the same players, where the individual companies create their own competitive strategy for engaging markets…

This is based on the premise that business is not necessarily a ‘zero-sum’ game where each situation is ‘win-lose’. There can actually be scenarios in which ‘win-win’ is achieved by cooperation, and others in which ‘lose-lose’ occurs without it. In fact without co-opetition often times there exists a ‘lose-lose-lose’ situation, because not only do the competitors end-up losing out on a potential market, but the market gets under-served because consumers lose out on a potentially useful product or service… In highly segmented industries with strong networking effects, such as; the information technology industry, co-opetition and competition may be the only way to conduct business…

However, co-opetition is double-edged sword, e.g.; it can give organizations a larger market share, and even a larger market, or it can lead to legal disputes, or it can create stronger competitors… Hence, great care must be taken in selecting– when and how to use co-opetition as a strategy for an organization’s advantage… The unfortunate aspect of co-opetition is that it can be perceived by government or other competitors as– tacit collusion…

In the process of co-opetition, organizations may find themselves in a worse predicament than when they started, e.g.; co-opetition can actually lead to unintended consequences, such as; stronger competitors, or new entrants in the market… According to Gary Hamel; even though practice of competitive collaboration (co-opetiton) is on the rise, long-term effects may compromise a company’s ability to compete in the future…

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This points to one key lesson: Today’s co-opetitions are tomorrow’s competitors, or even today’s… Hence control the transfer of information whether through security, or having one central gatekeeper for information sharing… and always try to learn as much as possible from the co-opetition… in other words; trust but verify… According to Stuart Richardson; co-opetition is a critical business strategy, and it promotes the notion that even with all of your– skills, strengths, talent… you still cannot do it alone…

Business relationships must be formed around a clearly articulated set of principles, which are used to measure progress and the relative success of the co-opetition… Hence, the players must have a system of metrics that tracks the performance of the arrangement, and if it’s not working; then they must make necessary adjustment or discontinue the relationship, quickly… Also, under no circumstances should you continue with a flawed arrangement… Most important, understand how to protect your own interests while  co-opetiting to maximize value…