What is co-opetition?


The aged care service sector has undergone a great deal of changes over the past few years. There are now more organisations providing services than ever before. The government has recently provided extra funding to areas where there were existing services (meeting existing needs), creating some confusion/angst amongst existing providers (in the CHSP sector). There is a mix of not for profits and for profits in the market place. The changes have led to some of the following:

  • Competition (some services/staff using aggressive/unethical tactics);
  • Unwillingness to share information or collaborate;
  • Suspicion;
  • Confusion/misunderstanding;
  • Poor communication;
  • Confusion for customers/consumers;
  • Poor service delivery;
  • Service delivery which doesn’t meet contracts;
  • Aggressive marketing.

 

Coopetition is a practical solution and enables organisations to compete with each other on some levels, but to cooperate on other levels. Coopetition is a planned or strategical action which could provide a better option for everyone. Services need to continue to work together, if not on all levels, on some levels and to have a shared understanding of those levels of competition and cooperation for the benefit of their organisations but primarily for the benefit of the consumers. Coopetition can be regarded as an effective way of handling both cooperation and competition between competitors.

Definition

Business/organisations that engage simultaneously in both competition and cooperation are ‘in co-opetition’. Co-opetition involves the collaboration between business competitors (in specific areas), in the hope of mutually beneficial results. It is a form of strategic alliance.

An example of co-opetition might be where an industry makes “widgets”. Making the widgets involves step 1, 2, 3 and 4 and then there is selling of the widget (step 5). Two ‘widget makers’ might join in a coopetitive relationship for steps 1-2 by sharing resources, staffing and financial costs. In step 3 and 4 the organisations remain independent and competitive. In step 5 (the selling and marketing of the widgets) the organisations are fiercely competitive. These two organisations have agreed to compete in steps 3, 4 and 5 (on a professional level). In steps 1 and 2 the organisations cooperate together, sharing information and resources.

Why use co-opetition?

Co-opetition is strategically a good move and provides opportunities for growth, expansion and efficiencies in many areas (including financially). Some of the benefits include:

  • Win-win scenarios between competitors;
  • Share costs and work together on agreed components;
  • Can increase profits of those working together because products/services are improved for customers (via shared alliances);
  • Can lead to expansion of the market and new business relationships;
  • Create working alliance that allows you to capitalise on strengths;
  • Partnering/forming alliances expands your influence.

 

Where can you cooperate? This should involve actions/services further away from the consumer (such as pay roll, policy development, lobbying to government departments, EAP for staff or possibly human resources).

Where can you compete? Generally organisations compete in areas close to the consumer (such as direct service provision, staffing, advertising/promotion), however this isn’t always the case.

Consider the following;

  • Decide where the possibilities lie for coopetition (perhaps write down what your service provides that other services don’t, where your specialty is and where commonalities lie);
  • Look at and know clearly, your organisations strengths/weaknesses and areas of diversity;
  • Perhaps decide upon some clear guidelines as a group on coopetition – this might include some principles on how to compete within ethical boundaries, principles on sharing of information, principles on working together;
  • Consider some training for staff on the importance of remaining professional amidst a competitive market (and possibly some training on coopetition);
  • Diversity fosters good co-opetitive relationships;
  • Coopetitive relationships should be divided and organisations compete in activities that are ‘close to the customer’ (output activities) and cooperate in areas further away from the customer (input activities);
  • The decision to compete/cooperate in a market area needs to be made with regard to all the competitors positions and the connectedness between them ( a change in one relationship within the network may affect other competitors relationships and positions);
  • The acceptance of the conflict and consensus about organizational goals are managerial issues of great importance and ensure maintenance of a coopetitive relationship;
  • The advantage of coopetition is pressure to develop in new areas (provided by competition) and access to resources (provided by cooperation).

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