Competitor analysis and interfirm cooperation: characteristics predicting firm’s coopetitive bent and performance

Evidences from literature state that two-thirds of cooperative agreements have serious problems in their first two years and over 70 percent of them fail even when partners, in a significant number com- petitors, have complementarities and potential synergies (Hambrick, Xin, & Tsui, 2001; Das & Teng, 2000; Madhok & Tallman, 1998). This failure rate suggests that the competitive advantage of coopera- tion with competitors is risky and results coming up from coopetition depend on several elements operating as antecedents, in itinere, and subsequent factors affecting competitors’ commitment on cooperative agreements. Starting from this base, the paper focuses on competitor’s analysis of resource endowment and market position (Chen, 1996) as anteced- ent factor affecting competitors’ bent on coopetitive agreements. In particular, the paper is focused on a variable, the level of interest of a potential coopetitor in a specific coopetitive agreement, useful to pre- dict the level of commitment that the potential coopetitor will lavish in coopetitive agreements. The idea is that the higher the level of a firm’s interest, the higher the level of its commitment (and initial in- vestments) lavished in coopetitive agreements, all else being equal. 69 70 Garraffo F. This level of interest depends on the purpose of the coopetitive agreement and it’s affected by the mutual consistency of resource en- dowment and market position of competitors involved in the agree- ment. Empirical evidences show that coopetitive agreements are fre- quently repeated among competitors with specific characteristics of resources and market position (Brandenburger & Nalebuff, 1996). Ac- cording to this idea, when coopetitors’ resource endowment and mar- ket position fit over time, coopetitive agreements evolve accordingly to specific paths depicted in the paper. The paper is organized as follow: the first part focuses on main purposes of coopetition and it continues with the discussion of the evolution of different coopetitive agreements. The second part dis- cusses the firm’s coopetitive bent through the analysis of competitor’s resource endowment and market position that explain the level of in- terest and commitment shown by competitors on coopetitive agree- ments. The concept of coopetitive symmetry existing between a pair of coopetitors is presented. In this part some hypotheses are proposed based on the analysis of characteristics of coopetitors’ resource en- dowment and market position that explain competitors’ bent on coopetition.