Coopetition: Value Creation Opportunities for Entrepreneurial Firms

Abstract

Firm’s pursuing entrepreneurial rents often face challenges such as risk, uncertainty, and limited resources. Our paper lays out insights from three theoretical perspectives, the resource-based view, dynamic capabilities, and game theory, to illustrate how coopetition can be a significant source of value creation in this context. We suggest that the types of resources most relevant for value creation are often held by competitors, who are servicing similar customers and confronting similar challenges. This facilitates access to complementary resources where internal development is time-consuming or costly. In addition, competitors can use each other’s knowledge and resource flow to extend and upgrade resources in dynamic environments. This enables positive-sum outcomes that exceed the sum-total of value creation efforts if pursued independently. Our paper illuminates underpinning value creating mechanisms in coopetition, demonstrates unique benefits that may be exclusively available to entrepreneurial firms, and underscores the value creating potential of coopetition