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This study aims to examine the critical role of types of coopetition (upstream/downstream), market structure (concentrated/competitive) and innovation (low vs high degree…
This study aims to examine the critical role of types of coopetition (upstream/downstream), market structure (concentrated/competitive) and innovation (low vs high degree of innovation) that can affect the way consumers perceive the resulting price (un)fairness of new offerings.
Three between-subjects experiments involving different participant populations and product categories were conducted to test the research hypotheses.
The valence of the effect of types of coopetition (upstream/downstream) on price fairness is conditional on the market structure and the degree of innovation associated with the new product offering. Downstream (as opposed to upstream) coopetition is much more detrimental to perceptions of price fairness in a concentrated market than in a competitive and fragmented market. However, within a competitive market, downstream coopetition may lead to greater price fairness perception than upstream coopetition when the new product offering is highly innovative.
The current study uses lab experiments with fictitious scenarios and focuses on two moderating variables: market structure and innovation perceptions. Future research may use field experiments and explore additional moderating variables that may annihilate the negative effect of downstream coopetition on price fairness perception, especially in a concentrated market.
In concentrated markets, firms should opt for upstream rather than downstream coopetition to limit the negative effect the announcement of coopetition has on price fairness evaluation. However, within a competitive market, when the new product offering resulting from coopetition is associated with a high perceived degree of innovation, firms should opt for downstream rather than upstream coopetition because of its positive impact on price fairness evaluation.
To the best of authors’ knowledge, this study is the first to demonstrate that new product development from coopetition has important implications for the perception of price fairness, leading to positive or negative effects depending on market structure and the degree of innovation of the new product offering. It then explores the conditions under which types of coopetition (upstream/downstream) might backfire.
Studies on inter-firm relationships have recently shifted their attention from dyadic networks to more globally driven network structures. This condition occurs because…
Studies on inter-firm relationships have recently shifted their attention from dyadic networks to more globally driven network structures. This condition occurs because embeddedness in global network structures may improve firm innovation and performance. In addition, the improvement of firm innovativeness and performance seems higher when globally networked firms both compete and cooperate between and among them. In this paper, we categorize the simultaneous interplay of cooperation and competition in the global arena as global network coopetition (GNC). Under GNC, multinational enterprises act jointly with their global partners-rivals to improve performance, at the same time by sharing complementary resources (cooperation side) and by undertaking independent actions to enhance their own performance (competition side). This paper aims to expand existing research on network and global coopetition by shedding light on the effects of coopetition between and among firms belonging to global network structures on value capture and innovation performance.
Using a sample of 100 firms belonging to 14 industries organized in 47 global networks of different sizes, the authors conducted a longitudinal empirical study over the period 2000-2014 covering 1,098 observations, 1,717 interfirm relationships and 78 inter-networks linkages. A multiple regression model on panel data with random effects was conducted on the sample of 1,098 observations related to the global automotive industry to test the research hypotheses.
Findings show that GNC enhances firm performance and innovation outcomes. In addition to GNC, structural characteristics such as network size, network position and network diversity have significant positive or negative effects on innovation and performance outcomes of firms belonging to these global network structures.
Our research offers a contribution to the literature dealing with global networked structures’ effects on firm innovation performance. In fact, it effectively complements prior work on outcomes of coopetition between firms embedded in complex network structures. It also advances research in the area by introducing the notion of GNC as a network by which firms can enhance their innovation performance and, therefore, their global innovation performance. This study has some limitations. First, we acknowledge that it is focused only on 14 global coopetitive networks. It could be promising to extend the scope to integrate other networks. Second, our measures of firm actions as based on a content analysis of news reports related to firms. It would be important to complement this data collection by conducting a qualitative analysis (interviews). Atlast, it could be promising to include the study of customer needs in the new product development process.
Our study also offers some insights into the management of coopetition. In fact, by taking into account the existence of a context in which global coopetition networks play a role, managers may be better positioned to effectively deal with the paradox of being a partner of their direct rivals to improve their firms’ innovativeness and, consequently, achieve good performance, on the one hand, and to maintain relationships within several networks by taking into account their structural properties such as centrality and diversity, on the other hand.
We contribute to extant network coopetition literature in two ways. First, we introduce the notion of GNC to detect coopetition occurrence in global network structures. GNC refers to a context where actors in various networks belonging to different industries and geographies cooperate in a one (or more) innovative project/s, while simultaneously keeping on competing within and between their networks. Second, we contribute to network coopetition by analyzing specific GNC effects on firm innovation performance. In so doing, we can provide a deeper analytical understanding of GNC performance effects on firms operating in global network contexts.