Every industry has its complex environment.

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There are strong, seemingly undefeatable players. Small companies that struggle to stay afloat.

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Innovators always pushing forward. Legacy brands keeping traditions alive.

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And then there’s you.

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You may fit into any of those categories, or perhaps neither. But no matter which one, one always feels threatened and views the rest as their enemies.

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However, a concept that has gained more notoriety with time is that of coopetition.

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It reshapes traditional notions of competition and collaboration.

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This strategic interplay, where companies simultaneously compete and cooperate, has proven to trigger innovation and industry advancement. 

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So how does it work? What are the benefits and challenges? Keep scrolling to find out!

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Strategic alliances

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One example of coopetition is the formation of strategic alliances among companies that would otherwise be considered direct competitors.

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Apple and Samsung do it. Sony and Panasonic have done it.

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These alliances are grounded in a shared commitment to addressing customer preferences effectively or a humble understanding and recognition of one’s strengths and weaknesses.

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Samsung, for example, supplies components like displays and chips to Apple.

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Streaming platforms like Netflix and Amazon Prime Video license content from each other to enhance their respective libraries, providing more options to subscribers.

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By prioritizing the customer and resourcefulness over traditional competitive dynamics, companies find common ground that fosters innovation and market growth.

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Beyond individual gains

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A company’s decisions don’t just revolve around sales.

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These decisions also impact their ecosystem and are therefore made with that in mind.

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Choosing to actively build expansive networks that bring together diverse players can open new doors that would never have been opened otherwise.

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Within these ecosystems of coopetition, companies collaborate to achieve shared goals and elevate the collective potential for innovation.

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Telecom companies, for example, collaborate on the development of shared infrastructure, such as high-speed networks or 5G technology, which reduces individual costs and accelerates the deployment of advanced technologies.

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The emphasis shifts from isolated competition to a cooperative mindset that benefits the entire industry.

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Coopetition as a response to complexity

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An industry's intricacies, such as interoperability, security, and technological standards, require a collective effort.

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Coopetition stems from competitors recognizing the need for collaborative problem-solving to address broader industry challenges.

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Each market has its share of complications. And while many may turn into a race for who solves it first, sometimes the complexity is impossible to face alone.

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In the pharmaceutical industry, joint research and development efforts help tackle complex health challenges. This leads to the discovery of new technologies that benefit the entire healthcare ecosystem.

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Rather than facing these issues in isolation, companies gather resources and expertise to find innovative solutions that help reduce complications that hinder progress.

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The challenge for leaders

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Just because coopetition presents significant benefits, it does not mean it isn’t a hard territory to navigate.

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It is a delicate game of balance.

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When two rival companies come together, conflicts of interest will arise.

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There may be issues surrounding intellectual property, giving credit, and aligning the alliances with each company’s long-term goals.

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As a leader, you need to become extremely sensitive to when it’s time for the good cop, and when it’s time for the bad cop.

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Success in coopetition depends on your development of a nuanced understanding of industry dynamics.

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Just remember that you’re always working for yourself and the industry and the customers.

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Breaking the norm

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Throughout the history of business, coopetition has provided companies with solutions by defying tradition. 

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Companies can find common ground, prioritizing customer satisfaction over conventional rivalry.

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It extends beyond individual gains, creating ecosystems where diverse players collaborate for shared goals, elevating industry innovation.

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It reduces complexity by addressing challenges through joint efforts. 

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And while navigating coopetition poses challenges for leaders, it trains their ability to balance self-interest and industry advancement.

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By learning the ins and outs of this process, your company will evolve within its market, and you will evolve as a leader.

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Enemies don’t always have to be enemies. They can still be your rivals and competition, but friendly play may get you places solitude won’t.

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For a real-life example of coopetition, make sure to check out this week’s episode of TOP CMO with Nutanix’ CMO, Mandy Dhaliwal.

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