Coopetition: Competing and Cooperating Simultaneously

Definition

Coopetition is a strategy where businesses compete directly in some arenas while cooperating in others, often simultaneously. Rather than viewing competition as a zero-sum game where one company's gain must be another's loss, coopetitive strategies recognize that cooperating to "grow the pie" can occur at the same time that companies compete to "divide the pie." This is especially prevalent in platform ecosystems where rivals must cooperate to create value even as they compete for dominant position.

In the Book

Rogers grounded the concept historically: "The term co-opetition was coined by Novell founder Ray Noorda and popularized by Adam Brandenburger and Barry Nalebuff in a book of the same name. The authors apply game theory to business relationships to show why the right strategy for rival businesses is often a mix of competition and cooperation on different fronts... rival companies must cooperate to 'grow the pie' at the same time that they compete with each other to 'divide the pie.'"

He illustrated coopetition among the five major consumer technology giants: "Apple, Google, Facebook, Samsung, and Amazon are all competing fiercely on multiple fronts... We could easily expect these five companies to behave like the Five Families of organized crime at war with each other... But, in fact, all five are deeply enmeshed with each other, cooperating and linking their products and services. Apple devices have long run Google as their default search engine. Facebook is the most popular app on everyone's mobile devices. Amazon's media collections are available and popular on Apple and Android devices, despite competing directly with Apple's App Store. Samsung actually manufactures many of the critical components for the very Apple iPhones that are competing with its own phones."

The mechanism driving coopetition is network effects: "The reason for all this cooperation is clear: the power of platforms. The power of Google in search, Amazon in media distribution, Facebook in social networks, and Apple and Android in mobile operating systems means that none of these businesses can afford to cut off their competitors from their own customers."

Rogers also showed coopetition driven by external threats. Television networks that competed as direct rivals in traditional distribution "teamed together to launch Hulu, an online streaming television service," cooperating against digital disruption threats.

Why It Matters

Coopetition reveals that competition in platform-dominated markets is not binary. Companies that understand when to cooperate and when to compete gain disproportionate leverage. The ability to cooperate strategically—sharing standards, cross-promoting, integrating with rivals' platforms—while competing fiercely on customer acquisition and features is a core capability in digital markets. This challenges the mental model of business as a series of winner-takes-all battles and recognizes that ecosystems often require cooperation to reach their full potential value.