Opinion Article ÓpticaPro, August 2024
Nuno Rama
Secretary of the Board of AASO
Executive Assistant at Optocentro
Master’s Program in Investment Strategy and Internationalization at ISG
The concept of coopetition and its applicability has attracted growing and widespread interest, not only in the scientific and academic community but also in the business world. Since the scientific literature is still relatively scarce and the phenomenon poorly studied, there is no single definition of coopetition, encompassing very fragmented topics and underdeveloped concepts. Even so, despite the lack of homogeneity, there is an almost absolute consensus on one aspect: the simultaneity of cooperative and competitive actions between two or more companies in the same sector at a given point in time. That said, who said that companies in the same sector cannot be allies and generate immense gains? In reality, there are no barriers or borders when the objective is growth.
Coopetition has been debated among academics as a strategy to enhance competitiveness and can simultaneously serve as a survival tool for micro (we can situate optical retail here), small, and medium-sized enterprises, particularly through internationalization and responding to the market through product and process innovation. However, there are inhibitory factors to coopetition that are still little studied, especially among industrial companies. Beyond pure business motivations — perhaps the most important being the sharing of scarce resources, cost reduction, and the distribution of innovation risks in the development of processes and products to respond to increasingly dynamic consumer markets — the ability to influence, create, and impose new industry standards or penetrate new markets, there are also other relevant external motivating factors, such as customer demands or economic policy pressures. Lato sensu, in terms of outcomes, these seem more relevant in knowledge economy sectors and less so in more conventional manufacturing sectors.
Coopetition has its roots in game theory and is quite common among large corporations, always arising from a shared desire to collaborate with one or more competitors to increase overall competitiveness, potentially helping rivals to exploit common strategic interests with mutual gains and leveraging results. Although it is a complex and dynamic concept, which can be seen as paradoxical and potentially generate difficult-to-manage tensions, there is, as previously mentioned, a broad consensus on the benefits of the concept, making it an important strategic option across various sectors, markets, value chains, and technological domains.
So, how can the concept of coopetition be leveraged at the sustainability level? As sustainability is a multifaceted concept encompassing environmental, social, and economic issues, both cooperation and competition can play important roles, each with its own advantages and disadvantages. Focusing on competitive advantages, we can point to the synergies created, resource sharing, and cooperation between companies, governments, academia, and governmental and non-governmental organizations, from which more efficient and innovative solutions to environmental problems can emerge.
Through partnerships and collaborations, companies can also reduce waste and optimize the use of materials and energy. For example, a by-product of one industry can be raw material for another, promoting the circular economy. Cooperation can also lead to the creation of standards and certification harmonization, which help and encourage the promotion of sustainable practices, thereby contributing to regulating and improving the environmental performance of a sector. In this context, both national and international regulations and quality standards are fundamental to ensuring customer trust and market credibility.
Likewise, cooperation can facilitate joint investment in research and development of sustainable technologies that, due to their high costs, would be risky for a single entity to finance alone. Conversely, competition can drive companies to innovate and find more efficient ways to operate, reducing resource use and minimizing environmental impact. Companies competing to become more sustainable can discover ways to lower operational costs through greener practices, such as energy efficiency and waste minimization.
Sustainability can also be a competitive differentiator, as companies adopting sustainable practices can attract conscious consumers and enhance their market reputation, creating a market advantage. On the downside, in the field of cooperation, particularly when excessive, there is a risk of inertia among the parties involved, making them complacent and less willing to adopt rapid or innovative changes. Similarly, resource inequality between companies, and consequently in the investment allocated to sustainability, can create disparities between companies and complicate cooperation management due to the need to align interests that might otherwise be shared.
In summary, a more effective approach to promoting sustainability may involve a combination of cooperation and competition. Companies in the sector can collaborate in areas where mutual benefits exist, such as research and development of clean technologies, while competing in areas like operational efficiency and cost reduction.