Collaborating with competitors
VARIS C. 5180046
WORAKIT R. 5180139
KAMORNRAT P. 5180293
INTRODUCTION
Alliance among competitors have risk
One study estimate that U.S. company lost
$50 billion a year in 1995
However alliances among competition are
more popular, estimated 10-30 % of alliances
in 2000
INTRODUCTION
He give a new term to
describe the process of
collaborating with
competitor
“co-opetition”
Ray Noorda, CEO of Novell
Example of alliances involving co-operation
Ten years research program to reinvent the
modern camera
Example of alliances involving co-operation
To sell their food products Online
Database Business
Online Service
To gain greater scale
The automotive business to
business exchange
Why Co- opetition is important
1. The rise of the Internet and the concomitant
need for competitors to define and expand
new market
2. The blurring of industry boundaries
Not all Co-opetitions are success
Success
Fail
Because
 They can manage the
balance between cooperation and conflict
Because
 Lack awareness of
cause and challenges
of co-opetition
Drivers of Co-opetition
Competitor
VS
Non
Competitior
The degree of
competitive threat in
order to set strategy
Motivation for collaboration among rival
Traditional Reason
 Setting standard: Shift from heavy to high
technology industry
 Sharing risk :
Developing ne innovation such
as biotechnologies
 Entering emerging
market :
New Customer and Low cost
production
Motivation for collaboration among rival
New Reason in 1990
 Expanding Product Line
 Reducing Cost
Motivation for collaboration
among rival
 Gaining Market share
 Creating new business
Managing the Risks of Co-opetition

-
5 important risks
Technology leakage
Telegraphing Strategic Intention
Customer Defection
Slow Decision Making
Business or Asset Fire Sale
Schwinn & Giant
Risk 1: Technology Leakage
 Occurs when a partner use alliance to acquire
certain know-how, which is then use against
you later
Solutions
 Controlling information
 Contact
 Rules and policy
Risk 2 Telegraphing Strategic Intention
 The risk is when your competitor knows your
strategic plans
 The direct transfer of information to partner
Solution
 Managing the information for example,
1. Developing guideline for sharing information
2. Teach the manager what information is
strategic
Risk 3 Customer Defection
 The competitor may get into contact with
your customer.
 Partner might increase its brand awareness,
customer understanding and direct personal
relationship to steal customer away.
Solution
 Never give full contact of customer to partner
 Allow partner to access to customer only
when selling jointly product
Risk 4: Slow Decision Making
Solution
 They should make the agreement on who are
responsible in which area
 Focus on basic of decision making identify
the most important decision that define
which decision maker will participate in those
decision
Risk 5 Business or asset fire sale
 create the risk of a fire sale
 firm will be force to sell its interest in the
alliance at a below market price.
 After they separate then the third party will
be much less in the asset once they tied up
the joint venture
Solution
 Favor the independent joint venture
structure, which will reduce cost and increase
the interest of other buyer
 Avoid Joint venture