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Coopetition or co-opetition describes a cooperative competition between two organisations present in the same market that collaborate to realize conjunctly one or more productive processes for a new products or services.

Generally coopetition is finalized to research and development of new products or services, in this way enterprises can share a “stretch of road” together, integrating resources, capabilities and knowledge to reduce investments and increase the innovation degree. When the output of this process is ready, organisation continue independently, differentiating the product with functionalities, marketing mix, price and placement, depending on their target, and come back to wear "competition dress" for the consumers.

Contrary to what you can imagine, in the long term is the cooperative behaviour that allows a sustainable development, not the competition. Attention, it will not useful disturb Darwin, argue that evolution favours organisations with more capacity to adapt to the external environment, because the natural evolution is based and follows a systems interdependent logic.

Embracing cooperation instead competition means understand that under complex market logics, no one organisation could have all resources sufficient to acquire a long-lasting competitive advantage.

Marquis Cabrera, Foster Skills's president e founder, ONG that makes innovation accessible to everyone looking to improve the child welfare system, wrote an interesting contribute on co-opetition published on Harvard Business Review. In this article Cabrera explains what are the failure motivations of the traditional agreements, and what could be favourable conditions to deal a competition agreement.

Why collaboration could does not work

Following Cabrera often traditional collaborations, also when are run by high profile enterprises, fails for lack of transparency. Involved partners don’t really collaborate, frustrating the partnership, because they assume that are playing zero sum match and that necessarily the success of one, means the failure of another. And this fundamentally because they don’t believe in cooperation among competitors. This generate opportunistic behaviour, moral hazard situations, in which contraposition among collaboration and intention is more than evident.

In the co-opetition situation, the competitor partners join resources based on a programme that reflects a convergence of goals among actors. When enterprises are able to identify shared goals and intentions, they cooperate to be more performant on the market. The premise is transparency, and this because is necessary disclose information, motivations, goal expected and interest so that the collaboration could be profitable. This favour a collaborative and relaxed atmosphere, although is known that enterprises are competitors, both could prosper exploiting competitor’s strengths.

The collaboration between LinkedIn and recruiters is the example reported by Cabrera to explain that collaboration among competitors is effectively a way to improve productivity. Reid Hoffman, social networker and co-founder of LinkedIn, in an interview said “Is not possible achieve the success alone. The only way to obtain great results is work with other people”.  Recruiters use LinkedIn to find best candidates and job opportunities, apparently in contradiction with respective business models this strategy, as asserted by Hoffman, has generate best performance for both.

How is possible protect our own interest and strategies but, at the same time, take advantage form collaboration with competitors?

1. SHARE INFORMATION

Each collaboration is based on trust. First condition to start a collaboration path is the propensity to share sensible information and knowledge about your business. Competitors that decide to collaborate have to show intention to build a trust relationship, alimenting on its own in the long-term thanks to the collaboration proceeding. If you feel the fear that competitor can acquire your critical resources, sorry, you are not ready to collaborate with an “antagonist”. In order to start a coopetition agreement run, is necessary that it generates advantages to both parties, and only if both companies are transparent about their intentions and expectations, giving the opportunity to the competitor to acquire and canalize new capabilities in its business process, the agreement will work.

2. INNOVATE

Coopetition is used mostly in the industries with an high degree of technology content. Experimentation in these cases take long time and require huge investments. Considering that corporate leaders in an industry compete with different but complementary asset, a suitable strategy is join strategic resources.  Knocking at the competitors’ door and propose a coopetition based on the excellence of both enterprises. Furthermore, keep in mind that competitors could be similar but not exactly equal, a good strategy is to converge into an agreement on business models or innovations not already governed by one of the companies but to develop new projects.

3. CHOOSE THE RIGHT COMPETITOR

An agreement between similar companies is the best way to create profitable relationships. Competitive companies can potentially point on the same target, but with different bids. This is because they have differentiated resources, both for the business model adopted and for capacity of attract human and financial capital. To finalize a collaborative relationship, you will need to make sure you choose a similar company with different resources that your organization does not have. The combination of different and complementary resources will allow you to explore new innovation that individually could be not visible.