Organizing coopetition for innovation: The case of wireless telecommunication sector in Europe

Prior research highlighted the prevalence of coopetition as a strategy for innovation in high-tech industries for several reasons but the link between forms of coopetition and innovation is still understudied. In order to fill this gap in the literature, this study attempts to answer the following question: which form of coopetition favors which type of innovation? The results of an embedded case study approach of five Celtic-Plus projects (European Eureka Program) in the wireless telecommunication sector show that two forms of coopetition exist: multiple and dyadic. While multiple coopetition is successfully pursued for radical innovation, dyadic coopetition is more suitable for incremental innovation. Different innovation objectives lead to different levels of value creation/appropriation tensions between coopetitors. In order for competitors to pursue radical or incremental innovation successfully, different levels of social capital related to different choices of partners are needed. The role of social capital levels as a moderating factor between value creation/appropriation tensions and innovation type is discussed in detail. The study proposes a conceptual model that links coopetition strategy motives to the types of coopetition and their results in terms of radical or incremental innovation. Finally, a framework that helps firms to balance between multiple/dyadic–vertical/horizontal collaboration according to the levels of value creation/appropriation tensions and social capital is proposed.     

Value co-creation and appropriation of platform-based alliances in cooperative advertising

Digital platforms help develop the open value co-creation strategic alliances, reshape traditional B2B relationships, and promote inclusive social innovation. This research explores the nature of coopetition between the digital platform and its participants. The focus is on how the platform-based alliance balances the contradiction between value creation and appropriation. The support evidence derives from a Stackelberg game in the context of cooperative advertising. Either the platform or the participant supporting advertising in the alliance prompts a Pareto improvement for all players. But the increased profit would be mainly occupied by the dominant platform. The incentive mechanism of profit sharing can promote the alliance to co-create value in a sustainable manner. The game illustrates the significance of cooperative relationships to co-create a larger total value and the existence of an unequal win-win relationship in the strategic alliance. The contradictory logic of cooperation and competition can be accommodated in the platform-based alliance. The dynamic coopetition is involved in a partially convergent interest structure and impacted by power asymmetry. The results highlight the balance between the tensions and harmonies through value creation and appropriation.     

“Vertical coopetition”: The key account perspective

Why do key accounts combine opposing types of relationship with their suppliers? The author has chosen to term this new hybrid form of supplier relationship management, which combines cooperation and price-competitive transactions and reflects the tension between value creation and value appropriation, “vertical coopetition.” She investigates the use of this concept in the context of an in-depth qualitative study, involving, firstly, an exploratory field study and, secondly, four case studies involving leading industrial MNCs. The results indicate that “vertical coopetition” occurs in two forms: when the price-competitive approach is predominant but some cooperation features are still to be found; and when cooperation is predominant, but appeals to competition are still made. Mutually opposed aspects of each form are linked and explained by three pivotal mechanisms, which the author calls, “strengthening”, “correction” and “commuting”. Finally, the study reveals that, increasingly, the key account's brands or Business Unit value¹ are explanatory forces of “vertical coopetition”.     

Linking joint value creation to the interplay of competition and cooperation: A fuzzy set approach

The aim of this paper is to explore the link between joint value creation and the varying nature of simultaneity. Joint value creation is a central concept in cooperative strategies and more broadly in the strategic management field. When cooperating with competitors firms have value creation intent, but face conflicting logics arising from the simultaneous pursuit of cooperation and competition. This study adopts a two continua approach to analyze coopetition at both the department level and the organizational level.We explore the conjunctural causality based on two multipartner alliances in the pharmaceutical industry. The fsQCA allows detecting multiple causal paths between different intensities of cooperation and competition at both the department and the firm levels (conditions) to joint value creation (outcome). A key contribution of this paper is the conceptualization and empirical demonstration of the relation between the joint value creation and the coopetition intensity. Different types of coopetition engagements generate different outcomes in terms of joint value creation. The results show that high intensity of cooperation combined with high intensity of competition is significant for joint value creation. Unbalanced intensities of both elements, as well as low coopetition intensity, do not lead to joint value creation.     

Incremental value creation and appropriation in a world with multiple stakeholders

There is a renewed interest among strategy scholars in the relationship between stakeholder theory and the dynamics of value creation‐appropriation in firms. Further advancements in this field are arguably impeded by an incomplete conceptualization and measurement of value and by scant characterization of the different patterns of stakeholder value appropriation. We develop a conceptual framework—based on an analytical taxonomy of value creation and appropriation—consistent with a more complete notion of value and wherein the trade‐offs in stakeholder value appropriation can be included. In essence, our analytical taxonomy contributes to enlarge the spectrum of value creation‐appropriation scenarios to be considered by researchers working on the stakeholder view of strategy. Copyright © 2014 John Wiley & Sons, Ltd.     

Organizing for value appropriation: Configurations and performance outcomes of price management

Value creation and value appropriation are fundamental strategic processes. Both can be analyzed at the level of the individual manager, an organization or at the systemic level. On the organizational level, empirical research so far has put strong emphasis on aspects of value creation, while value appropriation has received less attention. We analyze value appropriation through the organizational implementation of pricing processes in the context of formalization, specialization, centralization, dispersion of influence, and top-management involvement in firms' pricing organization. Through a large-scale exploratory study of 419 European companies in the B2B area, we identify five empirical organizational configurations of pricing organization for value appropriation. Testing the effects of pricing configurations relating to pricing performance as well as overall firm performance reveals that more systematic approaches to pricing organization significantly improve value appropriation outcomes.     

Pursuit of rigor in research: Illustration from coopetition literature

We propose that rigor consists of three key aspects: conceptual (the theoretical lens, constructs, and logic used to understand a phenomenon), methodological (how data are collected and analyzed to capture a phenomenon), and empirical (how findings are organized, distilled, and related to the theory). We discuss rigor in the context of coopetition research and explain how rigor could be enhanced in future research. For each aspect of rigor, we discuss what it means to conduct rigorous research, review the current state of coopetition research using a rigor lens, and systematically discuss ways of improving rigor in future research. We suggest that pursuit of research with greater level of rigor would help increase the impact of coopetition research and contribute to the creation of cumulative knowledge on the topic.     

Interfirm coopetition,interfirm knowledge creation,and collaborative innovation performance: The moderating roles of environmental competitiveness and dysfunctional competition

This paper investigates whether and how interfirm coopetition—the combination of cooperation and competition—affects collaborative innovation performance in competitive environments. We address this issue by introducing interfirm knowledge creation as a mediating mechanism based on knowledge creation theory and by examining the moderating effects of environmental competitiveness and dysfunctional competition. The hypotheses are tested using survey data from a sample of 170 Chinese high-tech firms. The results show that interfirm knowledge creation mediates the impact of interfirm coopetition on collaborative innovation performance. Furthermore, the findings indicate that the positive relationship between interfirm coopetition and interfirm knowledge creation is stronger under higher levels of environmental competitiveness but weaker under higher levels of dysfunctional competition. The positive relationship between interfirm knowledge creation and collaborative innovation performance is more evident under higher levels of environmental competitiveness. These findings enrich the interfirm coopetition literature, contribute to knowledge creation theory by extending it to the interfirm context, and provide a better understanding and useful advice for enterprise managers and government officials.     

The intra‐alliance division of value created through collaboration

The differential benefits reaped by individual partners are a major determinant of the impact of strategic alliances on firm performance and an important (dis)incentive for alliance partners to collaborate in value creation. Theoretically, we lack an explicit theory of intra‐alliance value division; empirically, previous analysis has been hampered by methodological challenges. We propose a bargaining framework for intra‐alliance value appropriation, as well as a measure for capturing its variation. We test our hypotheses on a sample of 200 biotechnology R&D alliances, and are able to explain variation in value appropriation across alliance partners, partner types, and individual firms of each type. Copyright © 2010 John Wiley & Sons, Ltd.     

Coopetition research in theory and practice: Growing new theoretical,empirical, and methodological domains

In this paper we discuss the theoretical rooting of present research on coopetition and point to the need for an integration of theories on competition dynamics, and cooperative interactions in social networks. We argue that the future growth of the coopetitive research field hinges on creatively combining existing theoretical approaches with novel research methods and contexts. In particular, we suggest that incorporating theories on the micro foundations of strategic action can substantially enhance the field. The aim of this paper is both to raise questions regarding the theory and practice of coopetition research and to give examples of new approaches and trends that may contribute to the advancement of the field in the future. We consider our research practice and explore avenues for further research starting from what, where and how we study coopetition, to when and who we study. In general, we call for a stronger focus on the centrality of multiple stakeholders in forming, executing, and developing coopetition, and on research methods that can investigate in depth the multitude of actors, interests, and interactions using a multi-level analysis, including the micro foundations of coopetition.     

Coopetition—Quo vadis? Past accomplishments and future challenges

Research on coopetition has been conducted for more than two decades. However, several concepts remain that require elaboration. A study on the literature shows that there is a lack of unified definitions, as various definitions have been employed in previous accomplished research. In this article we suggest that the early definition of coopetition, as a dual relationship between firms that simultaneously cooperate and compete needs to be refined. Our new definition suggests that coopetition is a paradoxical relationship between two or more actors, regardless of whether they are in horizontal or vertical relationships, simultaneously involved in cooperative and competitive interactions. We also highlight important contributions to the field, and some shortcomings that point to future challenges for coopetition research. Finally, we put forward five directions for future research: (1) understand the balancing of cooperation and competition, (2) understand the coopetition paradox and engendered tension, (3) apply a multilevel perspective on coopetition (4) understand the dynamics of coopetitive interaction, and (5) understand how coopetition impacts business models and strategy.     

Are all ‘sharks’ dangerous? new biotechnology ventures and partner selection in R&D alliances

We examine how new biotechnology firms (NBFs) select pharmaceutical firms as R&D allies as a function of value creation and value appropriation considerations. We develop a theoretical framework to understand partnering decisions accounting for both, a potential partner's ability as well as incentives to appropriate and create value within an R&D alliance. Our empirical findings show that NBFs are more likely to ally with pharmaceutical firms with the ability to create value, as long as these firms have the incentives to use their skills to create rather than appropriate value. Our study highlights the double‐edged sword nature of value creation skills and provides a deeper understanding into the contextual factors that determine when potential R&D partners will perceive such skills as increasing appropriation risks. Copyright © 2012 John Wiley & Sons, Ltd.     

Coopetition research - A systematic literature review on recent accomplishments and trajectories

Research in the field of coopetition, which describes firms simultaneously competing and collaborating to create value, has recently gained enormous momentum. Over the period of 2015 to 2020, scholars published more high-quality studies on this subject than in the entire 25-year history of coopetition research. Despite the relevance of these contributions, their fragmented nature and disjuncture from prior studies limit a connected understanding of the current standing of the field. Our analysis addresses this gap by systematically reviewing, comparing, and connecting a selected sample of 161 recent articles with the body of research established prior to 2015. Our study makes three main contributions. We (1) structure and connect past and present coopetition research across five identified research dimensions: Antecedents, execution, interaction, outcomes, and levels of coopetition. We (2) supplement this review with a qualitative trend analysis, identifying emerging themes for the future of the field. By combining past and present perspectives with the future outlook, we (3) provide a comprehensive, unique, and updated perspective on coopetition research, unifying it into a cohesive, overarching framework. Lastly, we explain crucial interdependencies and suggest areas for future research before we conclude the study.     

The coevolution of rent appropriation and capability development

Extant approaches to rent appropriation are static in that they explore bargaining power at a fixed point in time. This article contributes by examining how capabilities and bargaining power coevolve. As capabilities are developed, those who are favored by knowledge asymmetries make decisions that balance value creation potential against the rent appropriation regime, such as the organizational form in which the capability will be embedded. Using the example of Apple's development of the iPod, this article illustrates how stakeholders plan for rent appropriation as they assemble new capabilities—well before any value is actually created. Given that firm performance is an outcome of both capability development and rent appropriation, a robust theory must incorporate an understanding of how they coevolve. As such, the article highlights the need to integrate property rights theory with theories of value creation and governance costs as actors constantly make trade‐offs along these dimensions. Copyright © 2010 John Wiley & Sons, Ltd.     

Organizational antecedents of cross-functional coopetition: The impact of leadership and organizational structure on cross-functional coopetition

Cross-functional coopetition (the joint occurrence of cooperation and competition between departments) has received increasing interest from academia and practice. However, there is still little evidence on how cross-functional coopetition can be fostered. We investigate in how far leadership styles (consideration and participation) and organizational structures (centralization and formalization) can be employed to enable a firm's management favoring cross-functional coopetition between departments. Analyzing survey data from 234 German companies, we demonstrate that both consideration and participation have a positive effect on cross-functional coopetition. Additionally, we find that formalization has positive effect on cross-functional coopetition, whereas the effect of centralization is negative. We show that our findings are valid for a multitude of organizational cultures. Finally, we derive implications for research and practice as well as avenues for future research.     

Stay in or get out the Janus? The maintenance of multiplex relationships between buyers and sellers

Buyers and sellers interact in different ways. They conduct economic transactions but often also engage in social exchanges; they compete to appropriate the value generated throughout the pipeline but often also collaborate in mutual value creation. Increasingly, they show patterns of repeated interaction rather than engaging in single transactions.Most past research investigated interaction modalities within buyer-seller relationships through an ‘or-or’ lens, and considered one modality as prevailing within the relationship at a given moment.In this study, we will develop an ‘and-and’ logic, opening the mainstream view of relationship maintenance to social theories on the structure of economic action and the strategy view of coopetition. We will further examine the implications of dualities and complementarities within buyer-seller relationships in respect of their maintenance over time.     

The role of a central actor in increasing platform stickiness and stakeholder profitability: Bridging the gap between value creation and value capture in the sharing economy

To survive and prosper, firms need to be able to capture the value they create. The role of the central actor in developing a viable multi-stakeholder platform resides in its ability to continuously manage synergies between the value it enables and creates, and the value it appropriates. However, capturing value is more difficult than its creation, which often results in a rather short lifespan of many platform-based businesses. Existing literature, however, neglects the role of the central actor in orchestrating value in these platforms, and mostly focuses on mechanisms through which diverse stakeholders gain financial benefits and appropriate value for themselves. With an aim to contribute to this research field, we draw upon stakeholder theory and a longitudinal case study of HeadBox, the first online B2B sharing economy-based platform that enables businesses to offer and hire inspiring off-site spaces and associated services in the United Kingdom. We put forward a Platform Stickiness – Stakeholder Profitability Framework that establishes the missing connection between value creation and value appropriation by the central actor in multi-stakeholder platforms. The framework integrates eight ‘value-driving’ mechanisms that impact the central actor's ability to establish synergies between value creation and capture within a platform.     

Incremental and Radical Innovation in Coopetition—The Role of Absorptive Capacity and Appropriability

This study examines why some firms are better able than others to reap benefits from collaborating with their competitors in innovation. Whereas on the general level, collaborative innovation has been studied widely, and firm‐specific success factors in collaboration between competitors (i.e., coopetition) have not been exhaustively addressed. Earlier literature describes coopetition as a risky but potentially rewarding relationship in which sharing, learning, and protection of knowledge are recognized as the key issues determining the possible benefits and hazards. This study provides evidence of factors related to this, suggesting that the firm's ability to acquire knowledge from external sources (potential absorptive capacity) and to protect its innovations and core knowledge against imitation (appropriability regime) are relevant in increasing the innovation outcomes of collaborating with its competitors. This study also distinguishes between incremental and radical innovations as an outcome of coopetition, and provides differing implications for the two innovation types. The empirical evidence for the study was gathered from a cross‐industry survey conducted on Finnish markets. The data are analyzed with multivariate multiple regression analysis. The results of the analysis suggest that (1) potential absorptive capacity and appropriability regime of the firm both have a positive effect in the pursuit of incremental innovations in coopetition, and (2) in the case of radical innovations, appropriability regime has a positive effect, while the effect of absorptive capacity is not statistically significant. However, the results also indicate that there is a moderating relationship between these variables, in that the potential absorptive capacity is positively associated with creation of radical innovations within high levels of appropriability regime. These results yield important theoretical and managerial implications. As a whole, the results presented in this study provide new evidence on which types of firms can reap success in the challenging task of collaborative innovation with rivals. In the case of incremental innovation, a firm‐level emphasis on knowledge sharing and learning will positively affect the results of coopetition, as will an emphasis on knowledge protection. Thus, when incremental developments are pursued in coopetition, firms should not only seek to exchange knowledge to create value but also remember to secure the firm‐specific core knowledge within the firm's borders to stay competitive. On the other hand, when the firm is pursuing radical innovation with its rivals, the heaviest emphasis should be on protecting its existing core knowledge and also emerging novel innovations and market opportunities. Capabilities in knowledge acquisition are also beneficial in these cases, but the full benefits of knowledge exchange realize only when the firm's knowledge protection mechanisms are sufficiently strong, allowing for safe knowledge exchange between rivals.     

When is cash good or bad for firm performance?

Research summary: Cash can create shareholder value when used for adaptation to unfolding contingencies, but can also reduce value when appropriated by other stakeholders. We synthesize arguments from the behavioral theory of the firm, economic perspectives like agency theory, and the value‐creation versus value‐appropriation literatures to argue that the implications of cash for firm performance are context‐specific. Cash is more beneficial for firms operating in highly competitive, research‐intensive, or growth‐focused industries that are typical of contexts requiring adaptation in the face of uncertainties. Conversely, cash is more detrimental to performance in firms that are poorly governed, diversified, or opaque, as are typical of contexts where stakeholder conflicts, information asymmetries, or power imbalances can encourage value appropriation by other stakeholders. Managerial summary: Cash can create shareholder value when used for adaptation to unfolding contingencies, but can also reduce value when appropriated by other stakeholders. While cash‐rich firms have higher performance on average, with those in the 75th percentile having a market‐to‐book value 15 percent higher than those in the 25th percentile, we find that the performance benefits of cash depend on the context. Cash is more beneficial for firms operating in highly competitive, research‐intensive, or growth‐focused industries that are typical of contexts requiring adaptation in the face of uncertainties. Conversely, cash is more detrimental to performance in firms that are poorly governed, diversified, or opaque, as are typical of contexts where stakeholder conflicts, information asymmetries, or power imbalances can encourage value appropriation by other stakeholders. Copyright © 2015 John Wiley & Sons, Ltd.     

Always play against par? The effect of inter-team coopetition on individual team productivity

Current research lacks a deeper explanation of inter-team coopetition as a potential source of improved organizational performance on a micro-level. To fill this gap, our paper explores how inter-team coopetition influences individual team productivity. Building on social identity theory, we hypothesize that inter-team competition and inter-team coopetition both have a positive influence on individual team productivity with inter-team competition having a stronger influence. We further argue that organizational identification has a positive moderating effect on the link between inter-team coopetition and individual team productivity. To test our hypotheses, we conducted a laboratory experiment with 240 university students in which we simulated team scenarios using the puzzle board game Ubongo. Our findings confirm a positive effect of inter-team competition and coopetition on individual team productivity. In case of a high organizational identification, inter-team coopetition will boost individual team productivity further. Our paper improves the understanding of coopetition within the boundaries of the firm and the circumstances under which inter-team coopetition enhances individual team productivity and ultimately organizational performance. We also advance the literature on social identity theory by applying it to the organization’s micro-levels in the context of inter-team coopetition.