Why co-opetition business strategy succeeds?

 Big time companies tend to lose a lot in head long business competition. This is especially true in tech firms that leverage innovation and pharma companies that are under pressure to produce urgent medical solution. One way to optimize result is to combine features of competition with cooperation. The resulting mixture is known as co-opetition. 

Since 1997 when Adam M. Brandenburger and Barry Nalebuff co-authored the path finding book “Co-Opetition”, the idea of using a combination of competition and cooperation as business strategy became vogue and many companies got into the wagon of co-opetition.

The notion of collaborating with like-minded parties for a common goal is not something new. Many companies get together when they sense a danger from a new entrant to the market who becomes a major threat to their own survival. Forgetting about whether one is weak or strong all competing companies join in an alliance as equal partners to manage their business competition!

Co-opetition on the other hand takes this alliance to the next level. Here the central idea is to install a sound networking relationship. Major goals include:

a) Networking of common resources in the form of R&D, human resources that are trained and skilled, physical assets such as production line, and availability of requisite finance

b) Expansion of business of the existing products

c) Exploration of new market opportunities for forthcoming products

d) Product innovation in-house

e) Setting industry standards and regulations, such that alliance partners stand to gain both in turnover and profits in their exclusive zone and at the same time barring newcomers entering into this no-go area.

f) To ensure safe conduct by all parties in the alliance a business agreement is drawn stipulating responsibility, accountability and liability of each participant.

Recent example of Covid- 19 vaccine manufactured by the alliance of Pfizer and BioNtech illustrates how co-opetition succeeds!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist