1. Collaborating with competitors

2. INTRODUCTION Alliance among competitors have risk One study estimate that U.S. company lost $50 billion a year in 1995 However alliances among competition are more popular, estimated 10-30 % of alliances in 2000

3. INTRODUCTION He give a new term to describe the process of collaborating with competitor “co-opetition” Ray Noorda, CEO of Novell

4. Example of alliances involving co-operation Ten years research program to reinvent the modern camera

5. Example of alliances involving co-operation To sell their food products Online

6. Online Service Database Business To gain greater scale The automotive business to business exchange

7. Why Co- opetition is important 1. The rise of the Internet and the concomitant need for competitors to define and expand new market 2. The blurring of industry boundaries

8. Not all Co-opetitions are success Success Because  They can manage the balance between co- operation and conflict Fail Because  Lack awareness of cause and challenges of co-opetition

9. Drivers of Co-opetition Competitor VS Non Competitior The degree of competitive threat in order to set strategy

10. Motivation for collaboration among rival  Setting standard: Shift from heavy to high technology industry  Sharing risk : Developing ne innovation such as biotechnologies  Entering emerging market : New Customer and Low cost production Traditional Reason

11. Motivation for collaboration among rival  Expanding Product Line  Reducing Cost New Reason in 1990

12. Motivation for collaboration among rival  Gaining Market share  Creating new business

13. Managing the Risks of Co-opetition  5 important risks - Technology leakage - Telegraphing Strategic Intention - Customer Defection - Slow Decision Making - Business or Asset Fire Sale

14. Schwinn & Giant

15. Risk 1: Technology Leakage  Occurs when a partner use alliance to acquire certain know-how, which is then use against you later

16. Solutions  Controlling information  Contact  Rules and policy

17. Risk 2 Telegraphing Strategic Intention  The risk is when your competitor knows your strategic plans  The direct transfer of information to partner

18. Solution  Managing the information for example, 1. Developing guideline for sharing information 2. Teach the manager what information is strategic

19. Risk 3 Customer Defection  The competitor may get into contact with your customer.  Partner might increase its brand awareness, customer understanding and direct personal relationship to steal customer away.

20. Solution  Never give full contact of customer to partner  Allow partner to access to customer only when selling jointly product

21. Risk 4: Slow Decision Making

22. Solution  They should make the agreement on who are responsible in which area  Focus on basic of decision making identify the most important decision that define which decision maker will participate in those decision

23. Risk 5 Business or asset fire sale  create the risk of a fire sale  firm will be force to sell its interest in the alliance at a below market price.  After they separate then the third party will be much less in the asset once they tied up the joint venture

24. Solution  Favor the independent joint venture structure, which will reduce cost and increase the interest of other buyer  Avoid Joint venture