Co-opetition/ value system
2022
Pick a firm and briefly describe its strategic situation from the positional, resource-based, and value
system perspective. Elaborate on instances in your example where these different views may
complement or contradict each other.
2021
How can cooperative dynamics between firms (within or across industries) complement the positional
and resource-based views of competitive strategy? Discuss and illustrate with examples.
Intro:
o Original P5F: has a zero-sum approach toward competitive strategy
o Extend P5F: value net approach has a positive-sum approach (customer-side)
o Extend P5F: value net approach has a positive-sum approach (supply-side)
o Extend P5F: value net approach has a positive-sum approach (R&D)
o Extend P5F: new force of bargaining power of complementors
o Original RBV: limited to cultivating and exploiting one's own VRIN resources
o Extend RBV: Complementors to pool VRIN resources for mutual benefit
o Extend both: opens the concept of the nonmarket environment, where cooperation
often takes place
o Extends perspective from CA at a firm level to CA at a cluster-level
Original P5F: has a zero-sum approach toward competitive strategy
o Traditional positional view in Porter's 5 forces is to maximise your portion of the pie by
reducing share given to customers, suppliers, competitors (industrial rivalry), reduce
number of firms competing for the pie (new entrants), and ensure existence of the pie
(substitutes) (Porter, 1979)
o Generic strategies of cost leadership (pay less for inputs from suppliers) and product
differentiation (extract more from customers) (Porter, 1985)
o Examples: reducing competition for slice of pie
Reduce rivalry via M&A: Exxon and Mobil 1998 merger
Reduce threat of entrants via acquisitions: Facebook acquisition of Instagram
(entrants), Disney acquisition of Pixar (entrant), JBS and biotech foods/ vivera
(substitutes).
Increased bargaining power over customers via differentiation: Tesla/ Apple/
LVMH
Extend P5F: value net approach has a positive-sum approach (customer-side)
o Complementor's product makes customers value your product more (Nalebuff &
Brandenburger 1996)
o Examples:
, VHS outcompeted Betamax format although Betamax was technically superior
because most rental movies were in VHS, not Betamax format. Rental movies
made VHS players more valuable to customers
Developers and software platforms: app developers and Apple’s app store have
a mutualistic relationship; extension developers and Chrome's webstore
Airline alliances: Star alliance/ OneWorld. Shared mileage point system, airport
lounges, frequent flyer benefits can be used across airlines, codesharing and
synchronized schedules for connecting flights increase convenience for
travellers
American Airlines and Hilton Honors: Members of both programs can earn
transferable miles/points and enjoy reciprocal benefits when flying with
American Airlines and staying at Hilton properties
Extend P5F: value net approach has a positive-sum approach (supply-side)
o Value net, with complementary effects. Possible for competitors to be complementors
as well, called co-opetition. Complementor's product makes it more attractive for
supplier to provide you resources (Nalebuff & Brandenburger 1996)
o Often occurs in clusters (Porter 1998)
o Examples: Most companies as competitors/ complementors w.r.t. suppliers:
American and Delta compete for landing slots, gates, and airport facilities. They
are complementors with respect to Boeing, a key supplier so R&D costs for new
aircraft can be shared.
Compaq and Dell compete for the limited supply of Intel's latest chip. Intel will
be able to spread chip R&D cost among Compaq, Dell, and other hardware
makers, so each pays less
Shipping industry containerization reduced logistics supplier costs, so lower
prices for all
Extend P5F: value net approach has a positive-sum approach (R&D)
o Risk and cost sharing in R&D under uncertainty, learning from each other enhances
innovation (Bouncken & Kraus 2013), (Ritala 2001)
o Examples
Renault-Nissan Alliance and Mercedes-Benz partner to develop diesel and
gasoline engines for cars and light commercial vehicles
Extend P5F: new force of bargaining power of complementors
o Affects how generated value is split
o Based on relative bargaining power between the firms, depending on the firm's relative
scarcity (Adegbesan & Higgins 2011)
o Similar to the notion of bargaining power and rent appropriation by internal
stakeholders like employees (Coff, 1999), but now in the context of collaborating firms
o Example:
2022
Pick a firm and briefly describe its strategic situation from the positional, resource-based, and value
system perspective. Elaborate on instances in your example where these different views may
complement or contradict each other.
2021
How can cooperative dynamics between firms (within or across industries) complement the positional
and resource-based views of competitive strategy? Discuss and illustrate with examples.
Intro:
o Original P5F: has a zero-sum approach toward competitive strategy
o Extend P5F: value net approach has a positive-sum approach (customer-side)
o Extend P5F: value net approach has a positive-sum approach (supply-side)
o Extend P5F: value net approach has a positive-sum approach (R&D)
o Extend P5F: new force of bargaining power of complementors
o Original RBV: limited to cultivating and exploiting one's own VRIN resources
o Extend RBV: Complementors to pool VRIN resources for mutual benefit
o Extend both: opens the concept of the nonmarket environment, where cooperation
often takes place
o Extends perspective from CA at a firm level to CA at a cluster-level
Original P5F: has a zero-sum approach toward competitive strategy
o Traditional positional view in Porter's 5 forces is to maximise your portion of the pie by
reducing share given to customers, suppliers, competitors (industrial rivalry), reduce
number of firms competing for the pie (new entrants), and ensure existence of the pie
(substitutes) (Porter, 1979)
o Generic strategies of cost leadership (pay less for inputs from suppliers) and product
differentiation (extract more from customers) (Porter, 1985)
o Examples: reducing competition for slice of pie
Reduce rivalry via M&A: Exxon and Mobil 1998 merger
Reduce threat of entrants via acquisitions: Facebook acquisition of Instagram
(entrants), Disney acquisition of Pixar (entrant), JBS and biotech foods/ vivera
(substitutes).
Increased bargaining power over customers via differentiation: Tesla/ Apple/
LVMH
Extend P5F: value net approach has a positive-sum approach (customer-side)
o Complementor's product makes customers value your product more (Nalebuff &
Brandenburger 1996)
o Examples:
, VHS outcompeted Betamax format although Betamax was technically superior
because most rental movies were in VHS, not Betamax format. Rental movies
made VHS players more valuable to customers
Developers and software platforms: app developers and Apple’s app store have
a mutualistic relationship; extension developers and Chrome's webstore
Airline alliances: Star alliance/ OneWorld. Shared mileage point system, airport
lounges, frequent flyer benefits can be used across airlines, codesharing and
synchronized schedules for connecting flights increase convenience for
travellers
American Airlines and Hilton Honors: Members of both programs can earn
transferable miles/points and enjoy reciprocal benefits when flying with
American Airlines and staying at Hilton properties
Extend P5F: value net approach has a positive-sum approach (supply-side)
o Value net, with complementary effects. Possible for competitors to be complementors
as well, called co-opetition. Complementor's product makes it more attractive for
supplier to provide you resources (Nalebuff & Brandenburger 1996)
o Often occurs in clusters (Porter 1998)
o Examples: Most companies as competitors/ complementors w.r.t. suppliers:
American and Delta compete for landing slots, gates, and airport facilities. They
are complementors with respect to Boeing, a key supplier so R&D costs for new
aircraft can be shared.
Compaq and Dell compete for the limited supply of Intel's latest chip. Intel will
be able to spread chip R&D cost among Compaq, Dell, and other hardware
makers, so each pays less
Shipping industry containerization reduced logistics supplier costs, so lower
prices for all
Extend P5F: value net approach has a positive-sum approach (R&D)
o Risk and cost sharing in R&D under uncertainty, learning from each other enhances
innovation (Bouncken & Kraus 2013), (Ritala 2001)
o Examples
Renault-Nissan Alliance and Mercedes-Benz partner to develop diesel and
gasoline engines for cars and light commercial vehicles
Extend P5F: new force of bargaining power of complementors
o Affects how generated value is split
o Based on relative bargaining power between the firms, depending on the firm's relative
scarcity (Adegbesan & Higgins 2011)
o Similar to the notion of bargaining power and rent appropriation by internal
stakeholders like employees (Coff, 1999), but now in the context of collaborating firms
o Example:
