The Why and the How of Coopetition: Modeling the Incentives and Design of Coopetitive Value Networks

Purpose In this paper we present a systemic approach to modeling coopetition between firms that provides a methodology for analyzing the strategic incentives for organizations to engage in coopetition relationships (the why) and the organization design required to address the complexities inherent in such multifaceted relationships (the how). Methodology/approach We pursue a model-based approach that incorporates important conceptualizations adapted from competence-based management (CBM) theory and value network approach. We illustrate the applicability of our approach by applying it to the case of coopetition between IBM and Apple in the development of PowerPC CPU. Findings We show how modeling can contribute to our understanding of the strategic incentives for the organizations to develop a coopetitive relationship (“the why” of coopetition) and the organization design required for accommodating and addressing the complexities and dynamics of such a multifaceted relationship (“the how” of coopetition). Research implications First, our findings echo some of the perspectives developed in coopetition literature. Second, the study has utilized value network-level analysis in examining coopetition. Practical implications The modeling framework reported in this paper can help management practitioners in structuring choice situations involving coopetition, both in terms of the incentives to engage in a coopetitive setting and the design of a value network that can accommodate the complexities inherent in such multifaceted relations.