Coopetition - Definition
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What is Coopetition?
Coopetition is a strategy in business in which competition and cooperation are combined in a way that harnesses the benefits of each. Specifically, coopetition is when two companies that are known to be competitors collaborate with each other with the expectation of mutual benefits.
Companies collaborate for different reasons, the major ones are:
- Coopetition enhance synergy between companies in which ecah of them gain benefits and achieve their business goals.
- Coopetition aid expansion of the businesses involved and the entire industry.
- Coopetion is formed by companies who share common gains and have similar objectives in order to achieve their goals faster.
The Coopetition Model
In business, coopetition is a model that draws insight from a gaming theory in which competitors in a game form an alliance to achieve the same purpose. Coopetition models involve the use of certain statistics that map out the shares and losses of parties involved in the alliance. When two companies engage in coopetition, there must be an agreement that states what is expected of each party to achieve mutual benefits. The idea of coopetition was introduced by Adam M. Brandenburger and Barry J. Nalebuf, who are professors from Havard and Yale respectively. The coopetitiona model had the shape of a diamond where customers, suppliers, competitors and complementors were pitched in different corners of the diamond. In this business model, all these forces begin to cooperate, rather than competite and each party will achieve their goals.