Identifying and prioritizing critical success factors for coopetition strategy
| Published date | 25 April 2008 |
| Pages | 437-454 |
| DOI | https://doi.org/10.1108/02635570810868326 |
| Date | 25 April 2008 |
| Author | Kwai‐Sang Chin,Boris L. Chan,Ping‐Kit Lam |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
Identifying and prioritizing
critical success factors
for coopetition strategy
Kwai-Sang Chin, Boris L. Chan and Ping-Kit Lam
Department of Manufacturing Engineering and Engineering Management,
City University of Hong Kong, Hong Kong, People’s Republic of China
Abstract
Purpose – Coopetition is a revolutionary mindset that combines competition and cooperation. This
paper aims to determine and to examine success factors critical to coopetition strategy management
and to explore the identified factors in Hong Kong manufacturing.
Design/methodology/approach – Based on a literature review and expert interviews following
the analytic hierarchy process, this paper identifies and prioritizes seven critical success factors and
17 critical success sub-factors comprising three success factor categories: management commitment,
relationship development, and communication management.
Findings – The results show that management leadership and development of trust are the most
important success factors. Based on the factors identified, the authors propose a hierarchical model for
coopetition strategy management, which has been validated in Hong Kong industry to facilitate the
formulation of action plans for better coopetition management.
Practical implications – The prioritization of critical success factors and sub-factors can help
practitioners understand their relative importance and develop improvement plans in cases where
they lack sufficient resources to deal with all factors simultaneously.
Originality/value – This paper identifies the critical factors for implementing coopetition and also
validates and prioritizes them in Hong Kong manufacturing industry. It provides valuable information
that can help manufacturers accomplish coopetition.
Keywords Critical successfactors, Competitive strategy,Economic cooperation,
Analytical hierarchyprocess
Paper type Research paper
1. Introduction
Today, most businesses view themselves as competing in limited markets, seeking to
win out primarily by reducing prices. Kim and Mauborgne (2006), who have compared
this emphasis on competition to struggling for advantage “in a bloody red ocean,”
suggest an alternative. Their “blue ocean strategy” aims to overcome “bloody”
competition by developing a new market based on value innovation. Coopetition, one of
several blue ocean strategies, is a revolutionary mindset that combines the concepts of
competition and cooperation (Nalebuff and Brandenburger, 1996).
How can an organization thrive by simultaneously cooperating and competing with
others? Cooperation helps create a bigger business pie, so a business can win a bigger
piece of the pie through competition. For example, one early DVD standard was
the super density format jointly developed by seven firms, including Toshiba, Hitachi
Ltd, Matsushita Electric Industrial Co. Ltd, its subsidiary MCA Inc., Electronic
Corp., Thomson Consumer Electronics SA, and Time Warner Inc. This jointly owned
The current issue and full text archive of this journal is available at
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Critical success
factors
437
Received 13 June 2007
Revised 25 October 2007
Accepted 25 January 2008
Industrial Management & Data
Systems
Vol. 108 No. 4, 2008
pp. 437-454
qEmerald Group Publishing Limited
0263-5577
DOI 10.1108/02635570810868326
standard avoided the costs of a monopolistically supplied standard and, as a result, the
companies now compete for pieces of a bigger pie. On the other hand, some
organizations may cooperate in one area and compete in another. For example, Hitachi
and HP compete and cooperate: they compete intensely in the DVD driver and storage
area network market while cooperating at a high level in the areas of RISC computers,
technology agreements and chip use, among others. As a result of coopetition,
organizations can achieve mutual win-win situations (Webster, 1992; Casti and
Karlqvist, 1996; Hunt, 1996).
This paper reports the main findings of the research which is aimed at identifying
the critical success factors of coopetition strategy management and validating and
prioritizing them in Hong Kong industry. The factors of coopetition could help the
organization to understand the nature of the critical success factors so that they can
investigate their current situations of coopetition strategy for improvement.
2. Literature review
2.1 What is coopetition?
Coopetition is a combination of cooperation and competition. It means that two or more
competing organizations cooperate to create a bigger business pie and simulta neously
compete for bigger pieces (Nalebuff and Brandenburger, 1996). Coopetition creates
value through cooperation between competing organizations, aligning different
interests toward a common objective and helping to create opportunities for
competitive advantage by removing external obstacles and neutralizing threats. It also
happens between competitors who tacitly collude to jointly deal with customers or
third competitors (Porter, 1980). Coopetition strategy is a multidimensional and
multifaceted concept that assumes a number of different forms and requires multiple
levels of analysis. Coopetition encompasses both economic and social issue s related to
inter-organizational interdependence. It implies that organizations can interact in
rivalry due to conflicting interests and at the same time cooperate due to common
interests (Bengtsson and Kock, 2000).
The central and overarching goal is to create mutually beneficial exchanges and
added values. For example, Toyota and General Motors are rivals and two of the
world’s top automakers, but they have collaborated in developing fuel cell-powered
cars after other eco-friendly technologies proved big hits for Japanese automakers in
the American market to create a larger overall market for both companies to compete
in. Fujifilm and Kodak compete with each other, but they cooperate to tackle the waste
disposal problem of single-use cameras, accepting each other’s cameras from
photofinishers for recycling and reuse. This helps to reduce the collection cost of each
organization and expand the market of single-use cameras.
2.2 Coopetition in Hong Kong
Coopetition implies that organizations can interact in rivalry due to conflicting
interests, and at the same time cooperate due to common interests (Bengtsson and
Kock, 2000). In coopetition, an organization cooperates with others on different or
many aspects of businesslike standards setting and developing the market, and
competes on others like price and quality. For this work, coopetition occurs when
organizations that compete in the manufacturing space cooperate with one another to
define and administer the standards upon which their products will be built.
IMDS
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438
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