ABSTRACT
Many contributions in the management literature agree that a firm’s elements of optimal firm strategy and structure are linked to one another and they should change in a coherent fashion in a changing environment (Chandler 1962). Co opetition strategies do abide by the same rule. However, the issue of how co opetition can alter the internal pre-coopetitive structure of each participating firm has been largely neglected in the literature on coopetition (Walley 2007). To explore this issue, we will attempt to develop a framework for the study of coopetition-driven effects. Our framework will be built upon a representation of change named “Matrix of Change” (MoC) (Brynjolfsson et al. 1997). It supports strategic decision-making as it allows a manager to visualize the effects of change in the interactions of a business model. As coopetition typically implies some sort of organizational change for each firm participating in the coopetitive venture, we argue that a tool supporting the visualization of intended (and unintended) effects on the firm’s business model will facilitate the adoption of organizational solutions coherent with the strategic action. A primary objective of a coopetition strategy is finding a “complementor”, that is another firm with which the focal firm can develop complementarities by joining the tangible and intangible assets of resources comprising each firm’s portfolio. The complementarity of resources of the firms has been considered as the key mechanism of value creation in alliances at least since Richardson (1972) as joining resources belonging to distinct firms or multinational units produces unique synergies. In their seminal book, Brandenburger and Nalebuff provide broad empirical evidence of the benefits of coopetitive strategies, as well as of the missed opportunities due to managerial myopia toward the importance of leveraging complementarities among firms. Coopetition is not risk free. Threats to coopetition portrayed in the literature typically stem from the dominance of private interests over collective ones. In this case opportunism takes over the alliance’s interests (Gulati et al. 2000; Yoshino and Rangan 1995; Faulkner 1994; Hamel 1991; Hamel et al. 1989; Harrigan 1988; Bresser 1987). What we observe is that scholars of strategic management encourage managers to look faithfully at coopetition, as a win-win, performance-increasing
strategy. However they overlook issues related to the execution stage and the single partner level (Walley 2007). This point takes us straight to our research questions: What are the effects of a coopetition strategy at the firm level? Does a well-grounded coopetition strategy necessarily engender virtuous effects only? Can we predict the emergence of unintended and ambiguous effects within the single firm’s business model? Coopetition implies change management issues, which typically raise coordination problems within the firm (March 1999). This issue represent a not insignificant gap in research (Walley 2007), that might be perhaps related to the still juvenile stage of the literature on coopetition (Padula and Dagnino 2007). We recognize that some of the problems related to the implementation of coopetition strategies have been tackled in the literature on horizontal alliances. Students of alliances examined the underlying conditions favoring alliance formation and sustainability (Lorange and Roos 1991; Williamson 1991; Oliver 1990; Hennart 1988; Kogut 1988; Harrigan 1985). Recently, Nault and Tyagi (2001) focused on coordination mechanisms as the success of such horizontal alliances depends crucially on aligning individual alliance member incentives with those of the alliance as a whole. However, these studies tackle only marginally implementation issues characterizing a coopetitive relation. In sum, building on the existing literature on organizational and strategic change, and borrowing some of the results achieved by complexity theory applied to the study of organizations, we will develop a framework for representing change in a coopetition setting. The framework is applied to a case study in the soft drinks and beverages industry. We conducted an extensive field study at an Italian firm which we refer to with the pseudonym Aquae. The variety of co opetitive strategies adopted by this firm makes this case an excellent laboratory to tackle our research questions. The chapter is organized as follows. The next section illustrates the approaches to the study of the firm’s internal interdependencies embedded in the three fields of research used to develop our framework. In the third section we present our framework for the study of coopetiton-driven intended and unintended effects. After presenting the case and the competitive requirements of the mineral water and beverages industry, in the fourth section we apply the framework at Aquae. A typology of the unintended effects of coopetition strategy closes the chapter, together with a discussion of the study’s implications for management and research.
