Competitive Advantage Of Coopetition

Coopetition is a new kind of strategic relationship between firms involving the merging cooperation and competition. Cooperating to achieve mutual goals, but at the same time competing with each other depending on conflicting benefits (Zineldin, 2004). Firms that prefer this strategy are not solely competitors, but they are also partners. For example, GM and Suzuki combining technological resources to manufacture cars, and Siemens and Corning forming a cross-functional alliance to produce and market fiber-optic cables (Laine, 2002). Firms that intend to use coopetition strategy should consider some conditions to develop mutually beneficial business relationship before getting into a partnership with competitors. Firstly, they are

As a determinant of commitment dimension, this function leads to higher level of trust for creating and enhancing an ongoing strategic business relationship (Zineldin, 2004). On the other hand, trust is a necessary determinant of commitment levels too. When partners trust each other and have high levels of commitment, it is easier for them to adapt to the necessities of the relationship. Mutual benefit also influences relationship commitment. Firms will commit to more involved relationships when they have opportunities for greater benefits, such as lower costs, improved productivity, higher customer satisfaction, and better product performance. Similarly, trust has a positive effect on mutual benefit, which in turn affects relationship success (Morris et al., 2007). So, it is expressed that, all dimensions of coopetition should interact with each

For instance, Amaldoss et al. (2000) argued that, cooperation between competitors can hinder or delay the process and slow investments in new technologies. Conflict between firms can hamper each company’s performance when they attempt to collaborate (Morris et al., 2007). Also, lack of experience in working together with new partners can make considerable demands on management time, attention, efforts and energy, which may lead to neglect of the organization’s core business activities (Zeineldin, 2004). A coopetition relationship may cause firms to experience a loss of control over activities or resources. Firms are especially vulnerable when partners become less committed to the cooperative side of the relationship or focus only on their own benefits (Morris et al., 2007). Similarly, if organizations become more dependent on other parties, their vulnerability may increase (Zineldin,