Co-Opetition

The term co-opetition, which has emerged from game theory, encourages rivals to consider collaborating with each other in productive ways for end consumers and for each competitor's mutual benefit. Although most observers agree that collaborative partnerships are frequently the way forward within the vertical supply chain, there is considerable debate about cooperation between horizontal competitors. Both sides agree benefits accrue to cooperation between competitors, but some argue this cooperation can be done in a way that promotes healthy competition, whereas others argue such cooperation is simply “market rigging by another name.”

[Page 108]In the past, most management thinking has focused on getting larger and larger portions of an existing “pie.” Given the growing interdependencies between businesses and the opportunities created by new information technology, management thinking has expanded to consider not only “cutting the pie, but also expanding the pie.” The new term co-opetition describes competitors collaboratively expanding the market in creative win/win arrangements.

One prominent way co-opetition is being explored in the health care industry is through competing hospitals' collaborative efforts on community-based health promotion and wellness programs while simultaneously competing with each other for provision of acute and chronic disease treatment procedures. To make these collaborative partnerships between competing entities work, health care executives clearly need a new mind-set.