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COLLABORATING WITH COMPETITORS - PowerPoint PPT Presentation


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COLLABORATING WITH COMPETITORS. Contents. Co- opetition. Radar Screen Competitor Map. COLLABORATING WITH COMPETITOR. Reasons for an Alliance with Rivals. Managing the Risk of Co- opetition. CO-OPETITION. Co- opetition is the process of collaborating with a competitor.

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Presentation Transcript
slide2

Contents

  • Co-opetition
  • Radar Screen Competitor Map

COLLABORATING

WITH

COMPETITOR

  • Reasons for an Alliance with Rivals
  • Managing the Risk of Co-opetition
slide3

CO-OPETITION

  • Co-opetition is the process of collaborating with a competitor.
  • Alliances among competitors introduce considerable risks
  • However, 10%-30% of all alliances in year 2000 is in the form of co-opetition. WHY?
slide4

CO-OPETITION

  • Competitors come together to expand and define a new market.

Kodak & Fuji

Kellogg, Pillsbury

& Nabisco

Nestle & Mars

  • work together in a research program to reinvent the modern camera
  • work together to share their logistic route
  • work together to sell their food products online
slide5

RADARSCREEN

COMPETITOR MAP

  • Understanding co-opetition requires a more appropriate definition of “COMPETITOR”.
  • Think not in term of COMPETITOR vs NONCOMPETITOR.
  • Rather think in term of the degree of competitive threat.
slide6

RADARSCREEN

COMPETITOR MAP

  • Degree of competitive threat: Radar Screen Competitor Map (Tool help to aid the degree of competitive threat)
    • Help to visualize how competitor are positioned relative to your company and each other.
    • Help to identify the future strategic direction.
    • Help to assert the potential value of collaborating with a rival.
slide7

REASONSFOR AN ALLIANCE

WITH RIVAL

  • Well known reasons for collaborating among rivals:
    • Setting standards: risen as economy shifts from heavy industry to high technology.
    • Sharing risk: sharing various risk including risk of uncertainty when entering new market.
    • Entering emerging market: to access new consumers or to secure low cost production centers.
slide8

REASONSFOR AN ALLIANCE

WITH RIVAL

  • Emerging reasons:
    • Expanding product lines: offering more service/product lines
      • First Union and Charles Schwab
    • Reducing cost: forming alliances to combine similar assets and reduce cost
      • Sony and Ericsson
slide9

REASONSFOR AN ALLIANCE

WITH RIVAL

  • Emerging reasons:
    • Gaining market share: gaining market share and generating powerful network effect
      • DaimlerChrysler, Ford and General Motors
    • Creating new business: combining complementary capabilities and creating wholly new sets of skill
      • NBC and Microsoft
slide10

MANAGING RISKS OF

CO-OPETITION

  • Emerging reasons:
    • Technology leakage: when company’s core technology or process falls into a competitor’s hand.
    • Reducing risk by controlling information
    • Limiting the scope of alliance
    • Drafting contract that clearly define on technologies ownership
    • Regulate information flow within firm to guide employees on what to share and what not to share
    • Appointing a gate keeper where allowing only one person/ unit to have a contact point with the partner
slide11

MANAGING RISKS OF

CO-OPETITION

  • Emerging reasons:
    • Telegraphing Strategic Intention: allowing competitor the ability to predict our future strategic plan.
    • Reducing the risk by better managing information flows
    • With the help of senior management, a guidelines should be followed in sharing strategic information
slide12

MANAGING RISKS OF

CO-OPETITION

  • Emerging reasons:
    • Customer Defection: putting current or potential competitors into contact with our customers/ increasing the risk of the partner to use its increased brand awareness, customer understanding and direct personal relationship to steal customers away at some future date.
    • Reducing risk by insist on a jointly interaction with customers
    • Demanding a reciprocal access to partner’s customers
    • Allowing partners to access our customers only when selling a jointly owned products
slide13

MANAGING RISKS OF

CO-OPETITION

  • Emerging reasons:
    • Slow Decision Making: slow decision making, shallow cooperation or even abandonment
    • Reducing risk by focus efforts at different points along the value chain
    • Agreed on who does what well and clearly divide up job description
    • Identifying from 10 to 50 most important decision that alliance will face and pre define which decision maker will participate in those decisions.
slide14

MANAGING RISKS OF

CO-OPETITION

  • Emerging reasons:
    • Business or Asset Fire Sale:the risk of the firm that will be forced to sell its business in the alliance below market price.
    • Agreeing up front on the sale price
    • Favoring an independent joint venturestructure that will reduce the complexity of a sale and increase the interest of other buyers
    • Small firms should avoid traditional joint venture with larger competitors
slide15

Thanks!

GROUP 7

Term 1/2010