Clashes between contending market regimes: a challenge for firms in converging industries

Abstract

PurposeThe purpose of this paper is to develop a conceptual framework that describes three contending market regimes in converging industries, and to use this framework to study clashes between different regimes and the implication they have on firms' competitive strategies. More specifically, the challenges of competitors simultaneously acting in accordance with a competitive, a cooperative, and a co‐opetitive market regime.Design/methodology/approachAn exploratory case study of the interaction between firms within the IT and telecom industry is conducted.FindingsThe paper brings forward clashes between different market regimes in converging industries and six propositions are formulated. The study furthermore shows how firms respond differently to a demand‐driven convergence, some act in accordance with a competitive regime and try to exclude others whereas others act in accordance with the co‐opetitive regime and cooperate with competitors to develop new product offers.Research limitations/implicationsThe paper concludes that there are several challenges in transforming from a competitive to a co‐opetitive regime, and there is therefore a need to further explore the clashes observed in this study.Originality/valueFew empirical studies have been conducted of the converging IT and telecom industries and this paper reveals several new insights about this market context and the challenges it provides. The paper develops a theoretical framework for an analysis of converging industries and provides an insight about clashes that develop between different market regimes. It also describes the challenges firms are facing as a result of these clashes.

The dynamics of coopetition: A stakeholder view of the German automotive industry

“…Following this we analyzed changes in the competition level through changes in the degree of symmetry, the intensity of the competition, and the hostility of inter-firm relationships. Similarly, we analyzed changes in the cooperation level through changes in the activities of cooperative interaction and shared resources between VW and Porsche (e.g., joint R&D, product development and manufacturing activities) (Bengtsson & Johansson, 2011;Lado et al, 1997). During 2001-2012 there were many competitive and cooperative actions between VW and Porsche (see Section 4).…”

“…They are the explanatory variables that affect the types of coopetition, the outcome variable described by the observed levels of competition and cooperation. Here we define competition as the degree of rivalry between the two firms and conceptualize it from both structural and relational dimensions (Bengtsson & Sölvell, 2004;Chen, Su, & Tsai, 2007), and cooperation as the degree of jointly-conducted activities and shared resources to derive mutual benefits (Bengtsson & Johansson, 2011;Lado, Boyd, & Hanlon, 1997). Section 2.3 is about Freeman's (1984) four strategies of stakeholder management which will be helpful to draw managerial implications in connection with the new framework.…”

“…The order is reversed in industries in which complex project-based services are subject to tender: firms compete at the beginning to secure the deal and cooperate afterwards in delivering the service (Herzog, 2010). The need for explaining the dynamics of coopetition is widely recognized (see Bengtsson & Johansson, 2011;Bengtsson & Kock, 2014;Bouncken & Kraus, 2013;Bengtsson et al, 2010;Chen, 2008;Dahl, 2014;Ketchen, Snow, & Hoover, 2004;Tidström & Hagberg-Andersson, 2012). In the literature the types of coopetition are described according to the observed levels of competition and cooperation (see Luo, 2007;Park, Srivastava, & Gnyawali, 2014;Rusko, 2011).…”

“…It challenges the existing competition and cooperation paradigms with the potential to explain complex relationships with blurring boundaries (Bengtsson & Johansson, 2011;Bengtsson & Kock, 2014;Bengtsson, Eriksson, & Wincent, 2010). Coopetition can change over time by triggers such as changes in the industry or the institutional environment (Bengtsson & Kock, 2000;Dahl, 2014;Mariani, 2007).…”

Understanding the development of port and regional relationships: a new cooperation/competition matrix

“…The combined action and reaction to market opportunities and threats is part of an ongoing and real-time response from key participants to what the authors refer to as a 'competitive dynamic'. This is similar to the views of emergent strategy as a consequence of convergence (Herrmann 2005); cooperative responses in relation to dynamic and stable market context regimes (Bengtsson and Johansson 2011); and the study of competition and cooperation among rivalry groups in turbulent markets (Meng and Layton 2011).…”