L03 A: Geurts, A., Broekhuizen, T., Dolfsma, W. & Cepa, K. (2022). Tensions in multilateral coopetition: Findings from the disrupted music industry.

Question 1

multilateral coopetition in response to disruptive innovation is also extremely difficult and risky as it:

Answer 1

(1) Implies permanent changes to incumbents’ value networks and business models.

(2) Involves high uncertainty during the development and commercialization stage of the disruptive innovation

(3) presents a much greater risk of free riding than dyadic coopetition

Question 2

Coopetition

Answer 2

The simultaneous pursuit of cooperation and competition with the intent to create joint value.

• enables firms to pursue difficult yet highly rewarding opportunities that cannot be attained individually.

Question 3

cooperation drives value creation

Answer 3

• because it enables firms to overcome knowledge and resource asymmetries
• and instils a commitment to joint action that stimulates resource sharing and complementarity

Question 4

Competition

Answer 4

• firms’ desire to enhance or redefine strategic positions and earn above-normal returns at the expense of competitors – may improve value appropriation by expanding firms’ current markets or facilitating the development of new markets and business models
• Competition can further enhance value creation and appropriation as it motivates firms to innovate at a faster rate than competitors, removing potential complacency from coopetitive relationships

Question 5

How does coopetition creates tension?

Answer 5

• Creates tensions because they pursue different goals and activities
  1. 1. Common value creation and private value appropriation of benefits
  2. 2. Knowledge sharing while being vulnerable to technological imitation
• Causing less stable alliances than when not competing

Question 6

Generalist–specialist contribution tension:

Answer 6

Where coopetitors contribute different sets of resources:

specialists contribute a few resources in a concentrated effort often at one point in time, while generalists contribute a range of resources and capabilities through efforts dispersed over time.

• more unpredictable and less manageable > informal coalition building > drives focus and unilateral value capture

Question 7

Generalists

Answer 7

i. Generalists must therefore decide how best to allocate their scarce time and resources between these various activities.

ii. generalists are more likely to receive criticism from specialist coopetitors.

Question 8

Specialists

Answer 8

i. involved in only one specific platform activity tied to their resource contribution, and they are able to dedicate all of their time and resources to this activity

ii. need to be informed by and learn from others > more likely to voice criticism

Question 9

Multilateral coopetition is likely to be asymmetric, why?

Answer 9

The more firms that join a coopetition entity, the likelier it is that they will be of different sizes, contribute different resources and capabilities

>

harder to identify and punish opportunistic behavior 
management more complex because of subgroup formation that can destabilize coopetition

Question 10

Value creation–capture tension.

Answer 10

That is, coopetitors need to balance their need for joint value creation and individual value capture through a mix of what we call cooperation- and competition-inducing mechanisms, as well as respond to redirecting external events.

Question 11

Cooperation inducing mechanisms

Answer 11

• Identify shared goal
• Reformulate the roles of, and the inter dependencies between, different types of (competing) firms within the industry in favour of a more cooperative position.
• Development of us vs them mentality
• Formal coalitions

Question 12

Competition inducing mechanisms

Answer 12

Competition inducing mechanisms
1. renegotiation of strategy
- introduce strategic private demands to enhance their idiosyncratic (future) value appropriation
2. re prioritization of objectives.
3. Informal coalitions