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Identifying and prioritizing critical success factors for coopetition strategy

Kwai-Sang Chin, Boris L. Chan and Ping-Kit Lam
Department of Manufacturing Engineering and Engineering Management, City University of Hong Kong, Hong Kong, Peoples Republic of China
Abstract
Purpose Coopetition is a revolutionary mindset that combines competition and cooperation. This paper aims to determine and to examine success factors critical to coopetition strategy management and to explore the identied factors in Hong Kong manufacturing. Design/methodology/approach Based on a literature review and expert interviews following the analytic hierarchy process, this paper identies and prioritizes seven critical success factors and 17 critical success sub-factors comprising three success factor categories: management commitment, relationship development, and communication management. Findings The results show that management leadership and development of trust are the most important success factors. Based on the factors identied, the authors propose a hierarchical model for coopetition strategy management, which has been validated in Hong Kong industry to facilitate the formulation of action plans for better coopetition management. Practical implications The prioritization of critical success factors and sub-factors can help practitioners understand their relative importance and develop improvement plans in cases where they lack sufcient resources to deal with all factors simultaneously. Originality/value This paper identies the critical factors for implementing coopetition and also validates and prioritizes them in Hong Kong manufacturing industry. It provides valuable information that can help manufacturers accomplish coopetition. Keywords Critical success factors, Competitive strategy, Economic cooperation, Analytical hierarchy process Paper type Research paper

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Received 13 June 2007 Revised 25 October 2007 Accepted 25 January 2008

1. Introduction Today, most businesses view themselves as competing in limited markets, seeking to win out primarily by reducing prices. Kim and Mauborgne (2006), who have compared this emphasis on competition to struggling for advantage in a bloody red ocean, suggest an alternative. Their blue ocean strategy aims to overcome bloody competition by developing a new market based on value innovation. Coopetition, one of several blue ocean strategies, is a revolutionary mindset that combines the concepts of competition and cooperation (Nalebuff and Brandenburger, 1996). How can an organization thrive by simultaneously cooperating and competing with others? Cooperation helps create a bigger business pie, so a business can win a bigger piece of the pie through competition. For example, one early DVD standard was the super density format jointly developed by seven rms, including Toshiba, Hitachi Ltd, Matsushita Electric Industrial Co. Ltd, its subsidiary MCA Inc., Electronic Corp., Thomson Consumer Electronics SA, and Time Warner Inc. This jointly owned

Industrial Management & Data Systems Vol. 108 No. 4, 2008 pp. 437-454 q Emerald Group Publishing Limited 0263-5577 DOI 10.1108/02635570810868326

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standard avoided the costs of a monopolistically supplied standard and, as a result, the companies now compete for pieces of a bigger pie. On the other hand, some organizations may cooperate in one area and compete in another. For example, Hitachi and HP compete and cooperate: they compete intensely in the DVD driver and storage area network market while cooperating at a high level in the areas of RISC computers, technology agreements and chip use, among others. As a result of coopetition, organizations can achieve mutual win-win situations (Webster, 1992; Casti and Karlqvist, 1996; Hunt, 1996). This paper reports the main ndings of the research which is aimed at identifying the critical success factors of coopetition strategy management and validating and prioritizing them in Hong Kong industry. The factors of coopetition could help the organization to understand the nature of the critical success factors so that they can investigate their current situations of coopetition strategy for improvement. 2. Literature review 2.1 What is coopetition? Coopetition is a combination of cooperation and competition. It means that two or more competing organizations cooperate to create a bigger business pie and simultaneously compete for bigger pieces (Nalebuff and Brandenburger, 1996). Coopetition creates value through cooperation between competing organizations, aligning different interests toward a common objective and helping to create opportunities for competitive advantage by removing external obstacles and neutralizing threats. It also happens between competitors who tacitly collude to jointly deal with customers or third competitors (Porter, 1980). Coopetition strategy is a multidimensional and multifaceted concept that assumes a number of different forms and requires multiple levels of analysis. Coopetition encompasses both economic and social issues related to inter-organizational interdependence. It implies that organizations can interact in rivalry due to conicting interests and at the same time cooperate due to common interests (Bengtsson and Kock, 2000). The central and overarching goal is to create mutually benecial exchanges and added values. For example, Toyota and General Motors are rivals and two of the worlds top automakers, but they have collaborated in developing fuel cell-powered cars after other eco-friendly technologies proved big hits for Japanese automakers in the American market to create a larger overall market for both companies to compete in. Fujilm and Kodak compete with each other, but they cooperate to tackle the waste disposal problem of single-use cameras, accepting each others cameras from photonishers for recycling and reuse. This helps to reduce the collection cost of each organization and expand the market of single-use cameras. 2.2 Coopetition in Hong Kong Coopetition implies that organizations can interact in rivalry due to conicting interests, and at the same time cooperate due to common interests (Bengtsson and Kock, 2000). In coopetition, an organization cooperates with others on different or many aspects of businesslike standards setting and developing the market, and competes on others like price and quality. For this work, coopetition occurs when organizations that compete in the manufacturing space cooperate with one another to dene and administer the standards upon which their products will be built.

In recent decades, industries in Asian countries, such as Korea, Malaysia and Vietnam, have developed tremendously. As a result, Hong Kong industries face strong challenges in technology and quality-driven competition, as well as production-driven and low-cost competition (Tummala et al., 2000). Moreover, China has joined the World Trade Organization and opened its markets to foreign countries (Dangayach and Deshmukh, 2001). To maintain its competitive advantage, Hong Kong industries must move from labor-intensive production to capital and technology-based development and from a low-cost manufacturing base toward a high-value added, design and service-oriented manufacturing model (Enright et al., 1997). Coopetition can help make it happen. Bengtsson and Kocks (2000) research shows that coopetition benets the internal resource and market shares of competing organizations. Tsai (2002) also found that coopetition can help achieve multi-directional learning, in which different organizations mutually benet while competing for internal resources and market share. Bengtsson and Kock (2000) further demonstrated this in the Swedish brewery industry, where organizations compete to distribute beer to wholesalers but cooperate in bottle returns. Two critical points in coopetition strategy are knowledge sharing and pooling competencies, which can help strengthen competitive advantages (Zineldin, 2004). Coopetition could prove critical to the future development of Hong Kongs industries. By helping coordinate efforts between competing organizations in key areas, it allows them to share competitive advantages and extend synergy to achieve win-win results. In view of the importance of coopetition, our research aims to identify critical coopetition success factors and prioritize them using the analytic hierarchy process (AHP) approach. Our ndings could help organizations practice better coopetition, in turn enhancing competitive advantage. 3. Pilot studies 3.1 Coopetition model Based on our literature review, we found that there are different types of coopetition. Generally, when two or more organizations compete and cooperate simultaneously, they are in the situation of coopetition. However, different types of coopetition can be dened in terms of degree of competition and cooperation. The following model (Figure 1) is adopted from Luos (2004) Intensity of Coopetition with a Major Global Rival. 3.1.1 Type 1: monoplayer (low competition, low cooperation). A monoplayer is an organization that does not interact signicantly with competitors, maintaining low

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High

Contender (High competition, Low cooperation) Monoplayer (Low competition Low cooperation) Low

Type 2

Adapter (High competition, High cooperation)

Type 4

Competition

Type 1

Low

Partner (Low competition, High cooperation)

Type 3

Cooperation

High

Figure 1. The model of different modes of coopetition

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degree of competition and low degree of cooperation with competitors. Microsoft dominates the computer software market, but it also cooperates with competitors. Sun Microsystems, however, which maintains a low degree of competition and a low degree of cooperation with competitors. 3.1.2 Type 2: contender (high competition, low cooperation). A contender is an organization that vies with competitors for market power, competitive position and market share, maintaining high degree of competition and low degree of cooperation. Fujilm and Kodak are rivals, but they cooperate on the single-use camera disposable waste problem. They accept each others cameras from photonishers who return empty camera bodies to manufacturers for recycling and reuse, maintaining a high degree of competition and a low degree of cooperation. 3.1.3 Type 3: partner (low competition, high cooperation). A partner is an organization that maintains a high degree of cooperation and a low degree of competition with other organizations in search of joint synergies created by complementary resources and capabilities. Sony and Ericsson join together to increase their technical, quality, delivery and cost capabilities and to achieve a winwin environment, maintaining a high degree of cooperation and a low degree of competition. 3.1.4 Type 4: adapter (high competition, high cooperation). Adapters are organizations that mutually depend on one another to achieve respective goals, maintaining a high degree of cooperation as well as a high degree of competition. Hitachi and HP have a high degree of competition in DVD drivers and storage area networks while also cooperating intensively in RISC computers in terms of technology agreement and common chip use, among other things, maintaining a high degree of cooperation and a high degree of competition. Different types of coopetition can demand different coopetition strategies and focal points. Setting out, we assumed that most of the Hong Kong industries are type 2 (high competition, low cooperation). However, to understand and conrm the distribution of the different types of coopetition in Hong Kong manufacturing, we conducted a pilot survey. 3.2 Pilot study on coopetition strategy in Hong Kong We conducted an exploratory survey in early 2006 to investigate the current practice of coopetition strategy in Hong Kong industry. The target population of this survey was found in the database of the Hong Kong Trade Development Council, which widely represents the Hong Kong manufacturing industries. About 1,065 questionnaires were successfully emailed to targeted companies and a total of 149 responses were returned, yielding a response rate of 14 percent. We found that 46 percent of Hong Kong industries have cooperated with their competitors and more than 80 percent of respondents agreed that coopetition could provide advantages including a synergy effect, cost reduction, increase of market share, risk sharing, and knowledge sharing. We used a seven-point scale (7 very important and 1 very unimportant) to check the respondent attitudes. The mean value of the responses is about 5 (somewhat important) and the standard deviation is 1.24, which implies most respondents agree that coopetition is quite important. The survey also helped determine the relative importance of critical coopetition success factors (Table I). Again, we used a seven-point scale scoring system.

The mean of coopetition critical success factors runs from 4.8 to 6.2. The average mean for all critical success factors is 5.36. Standard deviation was small, no exceeding 1.50, with an average of 1.04. This implies that most Hong Kong industries agree regarding factors critical to coopetition. In this research, we employ an expert interview approach to further conrm critical coopetition success factors. As expected, most organizations are type 2 (66 percent) (high competition, low cooperation), followed by type 3 (15 percent) (low competition, high cooperation). Relatively few organizations are type 1 (12 percent) (low competition, low cooperation), and type 4 (7 percent) (high competition, high cooperation). The survey results show that, while coopetition is clearly important, over 75 percent of industries lack long-term coopetition plans. Only 55 percent conduct strategic reviews regarding coopetition performance or policy. This shows that, on the whole, Hong Kong industries have poor coopetition management. Therefore, it is important to identify and prioritize the critical coopetition success factors, as the ndings could help organizations understand the factors relative importance and help them create improvement plans, especially in cases where sufcient resources to deal with all factors simultaneously are lacking. 4. Critical coopetition success factors 4.1 The proposed coopetition hierarchy model We have identied critical success factors and sub-factors through a comprehensive literature review. The proposed hierarchy consists of four levels and three categories: management commitment, relationship development, and communication management. The factors and sub-factors form a hierarchical coopetition strategy model, shown in Figure 2. 4.2 Management commitment Management commitment is important for any initiatives success. It reects the level of management support in implementing coopetition. Without management commitment, coopetition cannot succeed. Three factors management leadership, long-term commitment, and organization learning and eight sub-factors are in this category. 4.2.1 Management leadership. Management leadership examines how senior executives create and sustain clear and visible quality values, along with a management system, to guide an organizations coordinated activities toward excellence (Ketchen, 2004). Management leadership is important to coopetition because it is related to how the top management attitude to the coopetition (Kotzab and Teller, 2003). There are three signicant sub-factors, which are elaborated below:
Factors Management leadership Development of trust Long-term commitment Conict management system Knowledge and risk sharing Organization learning Information system support Mean 6.26 5.74 5.52 5.13 5.10 4.97 4.81 SD 0.73 1.03 1.09 1.12 0.98 1.14 1.19

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Table I. The weighting of the critical success factors of coopetition

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Level 2: Category of factors

Management Commitment 1.1 Management Leadership

Relationship Development 2.1 Development of trust 2.1.1 Common goal 2.1.2 Adapting mutual organization culture

Communication Management 3.1 Information system support 3.1.1 Data interchange 3.1.2 Effective coordination 3.2 Conflict management system

Level 3: Factors

Level 4: Sub-factors 1.1.1 Vision and Mission 1.1.2 Policy and Strategy 1.1.3 Resource allocation 1.2 Long-term commitment 1.2.1 Adapting mutual strength and weakness 1.2.2 Long term agreement 1.2.3 Periodical review

2.2 Knowledge and risk sharing 2.2.1 Knowledge identification 2.2.2 Effective knowledge sharing 2.2.3 Effective risk sharing

3.2.1 Conflict resolution process 3.2.2 Conflict monitoring and improvement

Figure 2. Hierarchical model of coopetition strategy management

1.3 Organization learning 1.3.1 Organizational motivation 1.3.2 Employee participation

(1) Vision and mission. Vision refers to the desired future state of your organization. Vision describes where an organization is headed, what it intends to be and how it wishes to be perceived in the future. Mission refers to the overall function of an organization. Mission denes customers and markets served, distinctive competencies and technologies used (Harland et al., 1999). (2) Policy and strategy. Policy is developed by management and reects managements attitude. Moreover, policy is evidence of managements commitment to coopetition (Borders et al., 2001). Strategy is crafted to develop capabilities aligned with an organizations long-term goals. Together, they reect managements attitude toward coopetition. (3) Resource allocation. Resource allocation is important in coopetition. Management needs to allocate sufcient resources, such as capital and human resources, to develop coopetition (Bengtsson and Kock, 1999). Management must develop efcient and effective coping strategies for acquiring or allocating resources (Ketchen, 2004). Lack of resources can impede operations and even lead to the failure of coopetition. For example, lacking machinery or labor can cause production delays.

4.2.2 Long-term commitment. Long-term commitment includes long-term agreement with competitors. It may include commitment, responsibility and benets. Long-term commitment can maintain a partnership relationship with competitors. It can enhance legitimacy or neutralize possible conicts is an important factor in achieving common aims (Zineldin, 2004). A lack of long-term commitment can cause the failure of coopetition. The following describes the three sub-factors, namely: (1) Adopting mutual strengths and weaknesses. Every organization has its own strengths and weaknesses. Coopetition can ourish when organizations understand their respective strengths and weakness. Each organization would like to adopt the others strengths to achieve a synergy effect (Zineldin, 2004). To achieve a long-term cooperative relationship, each must adopt one anothers strengths and weaknesses. Also, understanding mutual strengths and weaknesses help achieve a deeper understanding and enhancement of the relationship. (2) Long-term agreement. Long-term agreements let organizations work together toward achieving strategic objectives (Drucker, 1996). In coopetition, dependence can be stipulated in formal agreements or be based on trust. (3) Periodic review. Periodic review can serve to maintain collaboration between competitors (Chen, 2003). If companies want to maintain a long-term partnership, a periodic review can help maintain a close relationship via information sharing and the reduction of the likelihood of conict. 4.2.3 Organizational learning. Argyris and Schon (1978) denes organizational learning as the process of detection and correction of errors. Huber (1991) considers four constructs as being integrally linked to organizational learning: knowledge acquisition, information distribution, information interpretation, and organizational memory. Organizational learning is critical to help organizations succeed in coopetition, which takes place in a complex and changing environment. Organization motivation and employee participation are sub-factors elaborated below: . Organization motivation. In coopetition, organizational learning is critical to handling rapidly changing environments (Hao, 2004). Organization motivation is a very important tool that encourages employees to be active in giving and learning (Lin and Jing, 2005). Organizations should provide positive learning environments to help motivate team learning and develop a culture of sharing. . Employee participation. Employee participation is very important to the success of organizational learning. Without employee support, nothing works (Mohamed et al., 2004). Therefore, employees should share in their organizations vision, promote a culture of sharing and adopt culture friendly to change. 4.3 Relationship development Relationship development refers to the development of a good relationship between coopetitors. A healthy and trusting relationship is crucial to achieving successful coopetition. Two factors development of trust and knowledge and risk sharing and ve sub-factors are in this category.

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4.3.1 Development of trust. Trust is an essential element for building a collaborative relationship. A high level of trust reduces conicts and causes higher partner satisfaction (Anderson and Narus, 1990). Moreover, trust enhances cooperative behavior (Doney and Cannon, 1997; Gamebetta, 1988). Hence, the development of trust is important to maintain cooperation with the competitors. The following describes the two sub-factors, namely: (1) Common goals. Different organizations have different goals and objectives. Even though they are cooperating together, they will also have different targets and wants. Common goals are therefore needed to link up different organizations and their interests (Mohamed et al., 2004). (2) Adopting mutual organizational culture. Different organizations have different organizational cultures. In coopetition, respect, understanding, acceptance, integrity and toleration are keys to a successful mutual organizational culture. 4.3.2 Knowledge and risk sharing. Knowledge is a source of competitive advantage. Knowledge sharing is an important objective in potential coopetition, because it adds value to each organization. Moreover, it is a critical factor in maintaining a cooperative relationship between competitors (Carayannis, 1999). Risk sharing can minimize losses. There are three signicant sub-factors: (1) Knowledge identication. Knowledge in general is important but some knowledge may be useless to an organizations (Levy et al., 2003). For coopetition to succeed, useful knowledge must be identied. Otherwise, it can result in wasted time and failed coopetition. (2) Effective knowledge sharing. Knowledge sharing as an important objective in potential competitor cooperation because it adds value to both organizations. It is a critical factor in maintaining a cooperative relationship between competitors (Chua, 2003). Also, knowledge sharing can induce synergy effects that are of benet to both organizations. (3) Effective risk sharing. Risk sharing distributes risk among different parties. With high-potential projects and investments, risk increases. Risk sharing is critical in enabling competing organizations to cooperate. Another advantage is the minimization of loss. Moreover, risk sharing within a cooperative relationship can bring about productive synergies (Morgan and Hunt, 1994). 4.4 Communication management Communication management is the systematic planning, implementing, monitoring, and revision of all channels of communication within an organization, and between coopetitors; communications management includes developing corporate communication strategies, designing internal and external communications directives, and managing the ow of information, including online communication. Two factors information system support and conict management system and four sub-factors are included in this category. 4.4.1 Information system support. Information systems play a paramount role in coordinating and controlling joint ventures (Birnberg, 1998). Information systems are the enablers of organizational collaboration (Boubekri, 2001), crucial to information exchange. Also information systems can coordinate the production, customer

communication and streamlining of deliveries in a way that creates and extracts added value critical to the success of coopetition. The following describes the two signicant sub-factors: (1) Data interchange. Data interchange helps provide the latest information involving production, customer communications and deliveries, among other things, creating value in coopetition (Hedberg et al., 1994; Jeffrey and Sviokla, 1995). It also enhances an organizations ability to respond to a fast-changing market, and can reduce misunderstandings and delays. (2) Effective coordination. Effective coordination is indispensable for successful coopetition. Effective coordination helps provide better communication to internal and external parties. Effective coordination enables organizations to transform valuable enterprise data into shared information for insightful and timely decisions at a lower total cost of ownership (Friedman and Barnes, 1992). 4.4.2 Conict management system. Conict management system enables effective and efcient handling of conicts. As a result of intensive cooperation with competitors, conict inevitably occurs (Bengtsson, 2000). Hence, a good conict management system is needed to maintain successful coopetition. The system should enable people to gather information, understand context and participate in decision making, enhancing their capacity to deal with conict before it escalates (Crawley, 1992). Two signicant sub-factors are elaborated below: (1) Conict resolution process. A mutually accepted conict management process is indispensable for effective conict resolution. Resolutions of complex conict could comprise various phases in which different members of organization participate using various communication methods (Zineldin, 2004). (2) Conict monitoring and improvement. Monitoring is a basis for the continual improvement of conict management. Organizations should monitor conict intensity, conict management processes and conict management skills on a continual basis (Quintana-Garca and Benavides-Velasco, 2004). Based on monitoring and review, actions can be taken to improve conict management performance. 5. Prioritization of critical success factor of coopetition Based on our pilot study survey, most of Hong Kongs organization about 66 percent are type 2 (high competition, low cooperation). Therefore, this paper focuses on prioritizing success factors critical to coopetition model type 2. Owing to limited resources, it is usually unfeasible for organizations to devote efforts to address all critical success factors and sub-factors concurrently. Determining success factor importance can help enable organizations to develop priorities when they establish or improve their coopetition strategies. We use AHP to prioritize the critical success factors and sub-factors of coopetition. 5.1 Analytic process hierarchy (AHP) AHP is a decision-making method for prioritizing alternatives when multiple criteria must be considered. Managerial judgments are used to drive the AHP approach by assigning weights to different criteria, and the alternative with the highest total

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weighted score is selected as the best (Saaty, 1994). Worldwide, decision makers have used AHP to solve problems in more than 30 diverse areas and thousands of AHP applications have been reported (Wasil and Golden, 2003). AHP provides a framework to cope with multiple criteria situations involving intuitive, rational, qualitative and quantitative aspects. Qualitatively, a complex decision problem is decomposed into a hierarchical structure. Quantitatively, it adopts pair-wise comparisons to rate decision elements (Cheng and Li, 2002). Moreover, AHP employs redundant comparisons to ensure the validity of judgments and also provides a measure of inconsistency for discarding inconsistent judgments (Saaty, 1994). In this research, AHP was adopted to prioritize the critical success factors and sub-factors. The judgments of each expert are nally synthesized using the geometric mean approach suggested by Saaty (1994). The AHP approach was conducted based on the following process (Lam and Chin, 2005): (1) Structuring coopetition strategy management hierarchy. (2) Data collection by pair-wise comparisons of decision elements. (3) Checking the consistency of judgments. (4) Calculating relative weights of factors. 5.2 Expert interviews We relied on expert interviews in conducting our AHP study. The preliminary list of critical success factors, identied through literature review, was presented for examination to six industry experts for validation. Our prioritization of critical success factors focuses on type 2, so the experts came from type 2 organizations. They had an average of more than 13 years overall experience in their elds and an about 7 years experience on average in handling coopetition. They all work in upper management in industries including electronics, metals, plastics and stamp making. All agreed that the determined factors are critical and comprehensive, implying that broad applicability to various industries (Table II). 5.3 Results and analysis AHP is a subjective method that does not require the involvement of a large number of experts (Cheng and Li, 2001). The use of small sample (ten or below) in AHP analysis has been adopted by numerous researchers (Cheng and Li, 2001; Lai et al., 2002; Tummala et al., 1997). In this study, six experts participated. To ensure that their judgments were consistent, we subjected the six data sets to separate consistency tests. The consistency ratio of these six data sets is below 0.1, meaning that these data are consistent and reliable. The average overall consistency ratio is 0.01, which is lower
Experience in the eld Experience with coopetition (in years) (in years) 15 11 12 10 12 20 8 6 7 6 6 9

Expert Expert Expert Expert Expert Expert Expert 1 2 3 4 5 6

Position Sales Manager Purchasing Manager Admin Manager Sales Manager Sales Manager Director

Field Electronics Plastics Metals Electronics Electronics Stamp making

Table II. Expert proles

than the maximum value of 0.1 suggested by Saaty (1994). The experts have, on an average, more than 13 years of experience and about seven years in handling coopetition. They all work in upper management (Table III). The expert experts conrmed the importance of the critical success factors proposed in the hierarchical framework without adding new items. The results appear in Table IV. The global and local weights of the three categories of factors, seven factors and 17 sub-factors. To obtain the overall prioritization of the seven factors and 17 sub-factors with respect to the goal of coopetition strategy management, global weights for the factors were calculated. Table III shows the prioritizations of the three categories, seven factors and 17 sub-factors in terms of global weights. We can note in Figure 3 that local and global weights are the same. This is because their preceding level is the goal of coopetition strategy management. From the result shown in Figure 3, the most signicant category for level 2 is management commitment. The second is relationship development and the third is communication management. In level 3, management leadership has a relatively high-global weight, followed by development of trust and long-term commitment. The remaining items have quite similar rates, from the highest (knowledge and risk sharing) to the lowest (information system support) (Figure 4). For level 4, we break the factors into three groups. First, we consider management commitment. In this group, resources allocation has the highest rate. The weights of vision, mission and policy and strategy are quite close, between 0.114 and 0.108. The lowest rates are periodical review and organization motivation (Figure 5). In the relationship development group, the common goal factor has the highest rate n at 0.113, followed by adopting mutual organization culture at 0.087. The lowest rate in this group is the factor effective knowledge sharing 0.015 (Figure 6). In the group of communication management, conict resolution process has the highest rate, at 0.047, followed by effective coordination at 0.032. The lowest rate in this group is data interchange, at 0.018 (Figure 7). 6. Managerial implications Nowadays, most organizations are facing intensive competition. However, there are great opportunities as a result of opening of China market. Coopetition strategy could be a critical success strategy for the future development of organizations. Since it helps to coordinate competing organizations to join together, gather and share the advantages. Moreover, it helps to extend the synergy effect to achieve a win-win result.
Expert Expert Expert Expert Expert Expert Expert 1 2 3 4 5 6 Individual consistency indices 0.03 0.01 0.03 0.05 0.04 0.03 Overall consistency index

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0.01 Table III. Expert interview consistency indices

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Level

Factor

Global priority weight Local priority weight 1.000 0.589 0.290 0.121 0.365 0.141 0.083 0.200 0.090 0.050 0.071 0.114 0.108 0.143 0.051 0.056 0.034 0.031 0.052 0.113 0.087 0.049 0.015 0.026 0.018 0.032 0.047 0.024 1.000 0.589 0.290 0.121 0.619 0.240 0.141 0.668 0.313 0.417 0.583 0.311 0.296 0.393 0.362 0.394 0.244 0.370 0.630 0.565 0.435 0.545 0.173 0.282 0.357 0.643 0.667 0.333

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Table IV. Normalized priority weights of coopetition

Level 1 Successful coopetition Level 2 Management commitment Relationship development Communication management Level 3 Management leadership Long-term commitment Organizational learning Development of trust Knowledge and risk sharing Information system support Conict management system Level 4 Vision and mission Policy and strategy Resources allocation Adopting mutual strengths and weaknesses Long-term agreement Periodic review Organizational motivation Employee involvement Common goals Adopting mutual organization culture Knowledge identication Effective knowledge sharing Effective risk sharing Data interchange Effective coordination Conict resolution process Conict monitoring and improvement

Note: The overall nal values are derived from the geometric mean of the experts judgment

Global priority weights of level 2 0.8 0.589 0.6 0.4 Management Commitment 0.29 0.121 Relationship Development Communication Management

Figure 3. Global priority weights of level 2

0.2 0

As the future of the organizations is full of threat and opportunities, organizations need to cooperate with competitors and share the advantages of each other to achieve the synergy effect and achieve the common goal and interest. Competitors may come together to leverage advantage through a temporary partnership by agreeing to share knowledge, in cooperation design. A key issue for coopetition is the notion that, there is duality in every relationship. It is the simultaneous elements of cooperation and

Global priority weights of level 3 0.4 0.3 0.2 0.1 0 Management Leadership Long Term Commitment Organizational Learning Information System Support Development of Trust Knowledge & Risk sharing Conflict Management System 0.200 0.141 0.09 0.083 0.071 0.050 0.365

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Figure 4. Global priority weights of level 3

0.2 0.1 0

Global priority weights of level 4 Managment Commitment 0.143 0.114 0.108 0.056 0.052 0.051 0.034 0.031 1

Resources Allocation Vision and Mission Policy & Strategy Long Term Agreement Employee Involvement Adapting Mutual Strength & Weakness Periodical Review

Figure 5. Global priority weights of level 4 management commitment

competition (Nalebuff and Brandenburger, 1996). Coopetition aligns different organizations interests to become the same objective, providing possible competitive advantages by offering opportunities, removing external obstacles or neutralizing threats. It is often done through the strategy of coopetition to inuence the organizations ght with competitors. Coopetition is a viable and valuable strategy. It can reduce up-front costs, learning costs, and increases effectiveness and efciency. Therefore, it is essential for the organization to develop this strategy with the competing organization to create a win-win situation with lower cost. Moreover, one argument in favor of coopetition is that, if the supplier of the standard is also the competitor, the manufacturer would basically be adding to the top line of the competitor, making it stronger. A generic assessment framework with weighting of coopetition management, which was mentioned in above, was developed in this paper.

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Global priority weights of level 4 Relationship Development 0.15 0.1 0.05 0.113 0.087 0.049 0.026 0.016

450
Figure 6. Global priority weights of level 4 relationship development

0 Common Goal Adapting Mutual Organization Culture Knowledge Identification Effective Risk Sharing Effective Knowledge Sharing

Global priority weights of level 4 Communication Management 0.06 0.04 0.02 0 Conflict Resolving Process 0.047 0.032 0.024 0.018

Figure 7. Global priority weights of level 4 communication management

Effective Coordination Conflict Monitoring & Improvement Data Interchange

It helps organization to assess their current coopetition management performance to thus identify room for improvement. The weighting was developed through expert interview with several experienced professional experts using the AHP approach. It enables organizations to understand their performance in coopetition management practices and it helps improve coopetition management performance. 7. Discussion This paper studies the critical success factors of coopetition strategy management in Hong Kong industry. For the three categories of the factors, respondents consider management commitment to be the most important factor. They recognize that management needs to provide support and consistent commitment to handle coopetition strategy management successfully. Relationship development also proves to be critical. Respondents recognize that the relationships between competitors are very important, because good relationships help develop mutual trust and sharing. Among the critical success factors, the most important factors are management leadership and development of trust. Respondents stress that top management do not provide clear direction and support to collaboration with competitors. They also

heavily stress commitment to collaboration with competitors, because management may not consistently commit to cooperating with competitors, focusing instead on immediate benets and short-term gains. Additionally, development of trust plays an imperative role in reducing problems between competitors. Respondents believe a successful coopetition strategy can be best maintained when trust exists. Gaining a competitors trust is essential to maintaining a collaborative relationship between competitors and is critical to ongoing collaborations such as the sharing of advanced technology and moving to deeper levels of cooperation. Among critical sub-factors, respondents consider resource allocation, vision and mission, and common goals to be the most critical to successful coopetition strategy management. Resource allocation refers to the use of capital, human resources, technology, machinery and so forth in developing coopetition. Without sufcient resources, it is hard to accomplish coopetition. Therefore, management should provide sufcient resources in developing coopetition. Vision and mission are important too, because they are related to management attitude and reect management intentions. Also, vision and mission reect the level of management support and attitudes towards coopetition. Therefore, vision and mission are critical to the success of coopetition. Respondents consider common goal to be important, too. Different organizations have different goals and interests, and in developing coopetition, identifying common goals play a critical role. Common goals connect organizations in ways critical to maintaining successful collaborative relationships. The seven critical success factors and 17 sub-factors form a hierarchical model of coopetition strategy management that can provide organizations with directions and targets for establishing and improving their coopetition management practices. By reviewing their current practices, they can identify areas to address. In fact, the accomplishment of most of the critical success elements necessitates joint efforts between collaborating parties. The model provides a platform for organizations seeking to improve their coopetition management. The categories, factors and sub-factors identied in this research are generic and the prioritization of these factors focuses on type 2 companies. Prioritization is of great importance because it is always unfeasible to address all factors concurrently and they can focus on the most critical factors rst and then gradually address the others. 8. Conclusion This paper has identied and prioritized the factors critical to successful coopetition. We determined the relative importance of our initial proposed critical success factors by consulting a group of experts. We have found management, leadership development of trust, and long-term commitment to be the most important factors. The interviews helped us investigate coopetition best practices and conrm our proposed critical success factors to a high degree of certainty. No further factors need to be added to the proposed hierarchy. This research provides several contributions to the coopetition strategy literature. It can help Hong Kong industries gain awareness of the nature and benets of coopetition strategy management. Understanding the nature of the critical success factors can help companies investigate and improve their coopetition strategies. Prioritizing the factors and sub-factors can help companies understand their relative importance and devise

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IMDS 108,4

improvement plans that can maximize limited resources in dealing with several or all factors simultaneously.
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