How do micro-firms manage coopetition? A study of the wine sector in France

Abstract

Research on coopetition – the simultaneous occurrence of competition and cooperation among firms – is usually limited to the realm of large firms. While some research has examined the motives and outcomes of coopetition among small- and medium-sized business, little is known about how coopetition is managed among micro-firms. The French wine sector is dominated by micro-firms, among which coopetition is common. Focusing on the Pic Saint Loup area in south-eastern France, this article analyses how micro-firms manage coopetition. While we observe similarities in coopetition with respect to large firms, a distinct micro-firm coopetition mode is identified: (a) contrary to expectations, the management of coopetition is highly formalised in micro-firms; (b) as with large firms, the management of micro-firm coopetition requires a separation between competition and cooperation, but such separation occurs outside the firm – in the form of a collective structure; and (c) in contrast to large firms, small firms exhibit an increase in individual-level dimensions of coopetition with decreasing firm size. We conclude that policy should encourage coopetition among micro-firms provided that it is tailored to micro-firm specificities.

Moderators affecting the relationship between coopetition and company performance

“…That is, prior theory has indicated that if managers believe that collaborating with their competitors is an important activity (i.e., something that has a positive impact on company performance), then, such individuals are likely to engage in behavioral forms of coopetition (resource and capability-sharing activities) (Brandenburger and Nalebuff, 1996). Further, other authors have stressed that managers must have access to competitors' resources and capabilities for coopetition to exist (Ganesan, Malter and Rindfleisch, 2005;Felzensztein et al, 2012;Granata et al, 2018). While the drivers of coopetition are important to increasing marketing scholars' understanding of how such activities can be best-managed (Gnyawali and Charleton, 2018), this investigation highlights the nature of the coopetition -company performance relationship.…”

“…However, an alternative viewpoint to the above-described research proposition, is that as industry rivalry becomes fiercer, a greater number of rivals could mean that management teams have more opportunities to engage in coopetition (Ganesan et al, 2005;Felzensztein et al, 2018;Mathias et al, 2018). Management teams are more likely to develop performance-driving forms of coopetition if competitors' resources and capabilities can be accessed (Felzensztein et al, 2012;Granata et al, 2018). Furthermore, coopetition activities are effective when organizations are within a close geographic proximity, owing to improving inter-firm relationships (Bengtsson and Kock, 1999;Geldes, Heredia, Felzensztein and Mora, 2017).…”

“…Further, when working with rival firms, managers must share a certain vision that cooperating with their competitors is likely to lead to mutuallybeneficial outcomes, such as improvements in their performance (Eriksson, 2008;Bengtsson and Kock, 2014;Mathias et al, 2018). If managers do not share this mindset, trust may not exist within such inter-firm relationships (Park et al, 2014;Granata et al, 2018). As such, it is important to consider whether trust between rivals moderates the coopetition -company performance relationship.…”

“…However, there has been an emerging body of knowledge (such as in the businessto-business marketing literature) that has considered how some organizations have limited assets, for which the only way to achieve managers' objectives is to collaborate with competitors, so that new resources and capabilities can be accessed (including strategic alliances) (Xie and Johnston, 2004;Bello, Katsikeas and Robson, 2010;Ali and Khalid, 2017;Gnyawali and Charleton, 2018). Consequently, the notion of "coopetition" (synonymously referred to as coopetition activities) highlights the interplay between cooperation and competition, whereby, managers collaborate with their competitors to access new resources and capabilities (Kim, Kim, Pae and Yip, 2013;Yami and Nemeh, 2014;Granata, Lasch, Le Roy and Dana, 2018). Bengtsson and Kock (1999) were among the first scholars to explore coopetition in the business-to-business marketing literature.…”

Managerial Hubris, Trade Associations and Regulatory Knowledge in Micro‐Firms

“…Micro-firms are generally found to be informal in their operations, with business practices that do not strictly follow regulatory procedures (Arrowsmith et al, 2003;Ram et al, 2001;Saridakis, Muñoz Torres and Johnstone, 2013). Crain and Crain, 2010) or excluded (at least some of) them from analysis (Achtenhagen, Ekberg and Melander, 2017;BEIS, 2016b;Blackburn and Hart, 2002;Falk and Hagsten, 2015;Falk et al, 2014;Granata et al, 2018;Hänninen et al, 2017). However, the actual impact of regulation on micro-firms is unclear, since most studies in this area have either tended to consider them to be part of a broad small or small and medium-sized enterprise (SME) segment (e.g.…”