Co-opetition and Technological Innovation in Small and Medium-Sized Enterprises: A Multilevel Conceptual Model

Abstract

Small and Medium-Sized Enterprises (SMEs) face tremendous challenges in their attempt to pursue technological innovations. This paper argues that co-opetition strategy-simultaneous pursuit of competition and collaboration-helps SMEs to develop their ability to effectively pursue technological innovations. We developed a multilevel conceptual model consisting of factors at the industry, dyadic, and firm level to understand the drivers of co-opetition and discuss benefits and costs of co-opetition for SMEs. We believe that this paper will stimulate future conceptual and empirical research on this important topic and has implications for SME managers and policymakers.

The coopetition paradox and tension in coopetition at multiple levels

“…These factors are industrial, relational, and firm specific (cf. Gnyawali & Park, 2009), which interrelate, overlap, and affect each other over the process of boundary creation, and thus in the materialization of a coopetition paradox.…”

“…Scholarly attention to coopetition, defined as the simultaneous pursuit of cooperation and competition between firms (Bengtsson & Kock, 2000;Brandenburger & Nalebuff, 1996), has increased due to the large number of industrial, relational, and firm specific factors that motivate or force firms to engage in these contradictory logics of interaction (Luo, 2007;Wu, 2012;Gnyawali & Park, 2009. A paradox materializes when cooperation and competition, two contradictory yet interrelated dualities are juxtaposed in coopetition (cf.…”

Modeling Simultaneous Cooperation and Competition Among Enterprises

“…Researchers have identified various characteristics that define coopetitive relationships (Gnyawali and Park 2009;Zineldin 2004;Chin et al 2008;Bonel et al 2008;Bengtsson et al 2010). These include complementarity (Tee and Gawer 2009), interdependence (Luo 2005), trustworthiness (Bouncken and Fredrich 2012), and reciprocity (Rossi and Warglien 2000).…”

“…Sun and Xu (2005) assert that it characterizes ''the current trend of economic activities''. It has become ''increasingly popular in recent years'' (Gnyawali and Park 2009) and is ''an integral part of many companies' daily agenda'' . It refers to a phenomenon in which two or more enterprises cooperate and compete with each other simultaneously (Brandenburger and Nalebuff 1996).…”

Management dilemmas in innovative supplier networks

“…Many studies view management of co-innovation as a firm-level phenomenon (Kale et al, 2002;Walter et al, 2006), whereas, in order to understand the innovation within a value network it requires an approach that is explicit not only about the innovation challenges that are faced by the focal firm (Christensen, 1997;Cooper and Schendel, 1976;Henderson and Clark, 1990;Tushman and Anderson, 1986), but views it from the point of multiple actors (Gnyawali and Park, 2009;Ritala et al, 2013), including the focal firm, suppliers, competitors and investors, such as VCs providing funding for the new innovations. Focal companies have "the central actor position within the network that allows it to steer and orchestrate the innovation potential of the network towards joint value creation" (Ritala & Huizingh, 2014), and reap the benefits of being big, as "large firms have powerful competitive advantages in all resource areas -money, people and interfirm relationships, among others.…”