Tuesday, 8 October 2019

Competition in the digital-era

Coopetition

- When you compete and cooperate at the same time

- Work with allies along with competitors in order to collaborate and co-crate new
offerings and develop new capabilities

• For example: Google and Apple

Industrial age principals

- Pure competition = diving up existing value pies, capabilities used to win a greater
share

- Cooperation = enlarging and expanding the value pie, pooling the capabilities of
several companies

Digital age principals

- Coopetition involves both expanding the pie and ensuring that you get a fair share of
the value

• The idea is to determine who to cooperate with and compete against

How to determine who is who

1. A player is your complementary if customers value your product more when they
have the other player’s product than when they have your product alone.

2. A player is your competitor if customers value your product less when they have
the other player’s products that when they have your product alone.

How digitization intensifies coopetition

- Value is co-created with multiple companies across these traditional industries

- Digital industries combine in ways to deliver new services to customers and capture
value

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- Example of digital giants
• IBM and Apple

- Cooperative: enterprise applications running on Apple OS

- Coopetitive: IBM’s Watson and Apple’s Siri

• Apple and Samsung

- Competitive: mobile devices

- Coopetitive: electronic components for the phones

• Netflix and Amazon

- Competitive: video (but does not necessarily serve the same market and show
the same videos)

- Coopetitive: video striating

Four interaction zones {look for the graph]

- Idea is to how you will react to your collaborators

• Transaction zone
- Little value in interacting

- Transactions are based on standard contracts as buyers and sellers

- No real specialized relationship, coopetition is not a concern

• Leader zone
- A company’s need to transform its business model is recognized // A need to
transform business model and cooperation with others less invested in the
relationship

- A position of strength

- Defending core strengths

- Allowing others to compliment you with deep involvement

• Ex: Ford and Apple which later became Ford and Blackberry

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• You are the leader in the market and allow other companies to complement
your product but you are not really involved

• Follower Zone

- Other players are in position of directing the transformation agenda

- “Disruptive interlopers” are collaborated with

• Ex: AirBnb as a disruptor in the market

• Ex: Honeywell is a company that produces thermostat. They had an issue

when the smart industry started developing (i.e. Alexa)

• Smart Watch created with IBM and Google vs. Apple Smart watch - issue:
what if someone else will approach IBM and Google

- The challenge is to think up follow on decisions

• Co-creation zone
- Relationship has high value when working together creates value that neither
could have done alone

- All competitive relationships are different and multilayered

Practical exercises: Personality types and managing conflict

- A

- B